Project Appraisal and Financing …  · Web viewUNIVERSITY OF CENTRAL PUNJAB FAISALABAD. Project Appraisal and Financing. Topic: Prepration of Feasibility report. Group members:Sana

UNIVERSITY OF CENTRAL PUNJAB FAISALABAD

Project Appraisal and Financing

Topic: Prepration of Feasibility report

Group members:

Sana Riaz (Reg. No. 0185)

Saira Khalid (Reg. No. 0201)

SabahatRiaz (Reg. No. 0213)

Umaira Iqbal (Reg. No. 0026)

Section: M.Com 1A

Submitted to:

Sir Nauman

Submission date:

25TH June-2014

DEDICATION:

We like to dedicate our work to our teacher Sir. Nauman Nazir and the people, who helped us in our project.

Submission date:

25TH June-2014

ACKNOWLEDGEMENT:

First of all, we are grateful Allah Al-mighty who gave us ability to accomplish this project. The completion of this project is a matter of pleasure for us but it was not possible without the support of our teacher, infact a mentor, Mr.Nauman Nazir, for he has provided us the useful knowledge of subject of Project Apraisal and Financing So, we are thankful to our Sir Ahsan Qasim. We are thankful to our parents also who helped and supported us.

25th - June -2014 Authors

TABLE OF CONTENTS

1. EXECUTIVE SUMMARY.....................................................................................................................6

2. INTRODUCTION OF PROJECT.........................................................................................................7

2.1. DESCRIPTION:.............................................................................................................................7

2.2. TYPE C:..........................................................................................................................................7

3. OBJECTIVES OF PROJECT...............................................................................................................7

3.1. NEED OF BULLET TRAIN..........................................................................................................7

3.2. OBJECTIVES:...............................................................................................................................7

4. PRODUCT ANS SERVICE DESCRIPTION.......................................................................................7

5. PROJECT APPRAISAL........................................................................................................................9

5.1. MARKET ASSESSMENT..............................................................................................................9

5.2. COMPETITION ANALYSIS:......................................................................................................12

5.3. MARKETING STRATEGY..........................................................................................................21

5.4. TECHNICAL OR PRODUCTION ANALYSIS..........................................................................23

5.5. MANAGEMENT CAPABILITY:................................................................................................25

5.6. FINANCIAL ANALYSIS.............................................................................................................27

6. SAFETY APPRAISAL:........................................................................................................................29

7. POLITICAL APPRAISAL:..................................................................................................................29

8. REQUIRED FINANCING:.................................................................................................................29

9. LIMITATIONS OF PROJECT:..........................................................................................................30

10. RECOMMENDATIONS:.....................................................................................................................30

11. APPENDICES:.....................................................................................................................................31

1.

EXECUTIVE SUMMARY

Our project is related to development of Pakistan in which we have focussed on Infrastructure development.We have designed to introduce a bullet train in Faisalabad which is connecte dwith three cities i.e. Islamabad,Lahore and Multan.First we do scheduling and determine our project time to be completed.Then we make cost estimation and estimation of required financing.We also de certain type of analysis (Marketing Assessment, Marketing strategy, Competion Analysis,Production and Techonology Analysis,Management Capability and Financial Analysis.At the end we tell about some limitations and recommendations for our project.

INTRODUCTION OF PROJECT

In Faisalabad,there is a problem of fast and unsafe traffic. Specially the speed limit in cities is 40 km/h.Even faster traffic flow isnot only the requirement but development of public transport is concerned.In rushyareas ,the fast public transport(buses) are not safe.

DESCRIPTION:The safe and fast public transport can be provided by bullet trains having its own dedicated path.The bullet trains using electricity will be installed in three rushy areas of city included 8 bazar,Bus stand,Khuryanwala textile mills.These trains will be using dedicated path. So, bridges construction will be done for bullet trains.

TYPE C:Service sector project, generating financial revenue and providing transportation services for general public.

OBJECTIVES OF PROJECT

Need of Bullet Train In Faisalabad, there is a problem of fast and unsafe traffic. The speed limit in cities is 40 km/h Development of public transport is needed.

Objectives: To facilitate the general Public. Its purpose is to provide fast means of travelling To provide safe and secure journey. To develop the infrastructure of Pakistan by developing transport and travelling

PRODUCT ANS SERVICE DESCRIPTIONFollowing are the services provided to the customers:

* Individual cabins for 6 passengers/families.* Video and music channels on LCD for each cabin* Hi-tea, dinner, snacks and beverages (Included in fare)* Emergency support.* Web/online reservation * Spacious and comfortable waiting hall.

* Comfortable and relaxed sitting arrangement.* Prayer place.* Snack bar and gift shop.* Free internet kiosk.* Free wi-fi for laptops.* Neat and clean washrooms.

Important information:

18 million passengers in a year300 billion dollars350km/h 39 monthsShanghai and Beijing7 times more speed approximately49 million rupees per km cost in India 1987Cost in 2010 is $9.5 million per kmPower needed by China’s fastest #1 bullet train is 22,800 kilowattsMaximum speed should be 300km/h in order to be safe

P ROJECT A PPRAISAL

Market Assessment

1. What is the size of the market?

The Size of our market is extended up to 3 cities of Pakistan ( Faisalabad, Lahore,Islamabad) We target three cities of Pakistan because these are the areas where the passengers of travelling through train are more than anywhere else. Our main stations will be at three places.

2. What is the Sales Volume?Our sales are dependent on the number of passengers who will prefer bullet train over traditional one. As our charges are not so high but services are worth wile so it is expected that many customers will be attracted and we will generate revenues.

3. What is the Production Volume?

As it is a service which we are providing to the customers so our main focus is providing quality services at low cost to our customers.

4. Who is Target Market?

Our target market is the low and middle class people who cannot afford high cost journey and also the people who have to travel a lot in daily life. Our this type of service will definitely help them to have safe, secure an fast journey.

5. Where are they currently buying the product or service?Customers are taking services from Pakistan Railway and form other train running in Pakistan.They are paying high charges but against it they don’t get any kind of comfort rather than that they have to bear problems of late departure and arrival.

6. Are the Customers Satisfied?

No, they are not satisfied from the current services Pakistan Railway as it is in totally deficit and there are many issues of privatizing it.Due to which they are not being served efficiently.

7. How is your market segmented currently?

Our Market is segmented geographically because we are targetting specific areas of Pakistan to laucnch the concept of Bullet Train.

8. What are the major trends affecting your market?

The concept of bullet train is being popular nowadays.Now there is more trend of comfortable and fast trains.Demand sof people are increasing day by day.They want quality services due to which now they don’t like traditional railway system and its trains.

9. What is the growth rate if the market?

There is definitely a growth in our selected market because many community in Pakistan travel through train and if it will be bullet train then it will attract most of them.We can capture many customers because people like to travel through train.They take it travelling as well as journey.

10. What would the buyers like to see changed about the products they are now buying?People are now fe dup of the Pakistan’s Railway system and really want a change in the services that they already have like:

* Individual cabins for 6 passengers/families.* Video and music channels on LCD for each cabin* Hi-tea, dinner, snacks and beverages (Included in fare)* Emergency support through on board para-medical staff and local 1122 direct access during traveling.* Web/online reservation with home delivery and cash collection service for tickets.* Spacious and comfortable waiting hall.* Comfortable and relaxed sitting arrangement.* Prayer place.* Snack bar and gift shop.* Free internet kiosk.* Free wi-fi for laptops.* Neat and clean washrooms.

11. What are the market trends for your product?

The other major trend is “trains for day-to-day life” People of other developed countries have used it previously. It originated from Japan where winter is cold enough and summer is moderate. So, cold weather will not affect the bullet train

system. Other countries like ( Algeria, Morocco , China Japan, Hong Kong, South Korea, Saudi Arabia, Taiwan, Uzbekistan ,Austria, Bulgaria, Denmark, France, Germany, Greece, Italy, Norway, Portugal, Spain, Sweden, Turkey and UK,North America and Belgium - France - Germany - the Netherlands )all of them have introduced the bullet train which is successful as well.

12. How do factors such as age, gender,family income,brand loyalty,lifestyle,et. Affect your product?

All of them have an impact on our services because now people are more concious about brand and lifestyle . They want to travel in the trains that bst match their status and position.That’s why we are offering such kind of train which may serve almost all kind of classes.Their behavior matteres a lot in the success of our project.

13. How do customers view warranties and packaging of the products? What is the price structure on your product?

As we are service provider firm so there is no concept of packaging and warranties but we may define our price structure which is discussed in marketing strategies.

14. How has the price changed in the last year? Last five years?

The federal government demanding an increase in fares by 100% last year Even last year, the railways had increased fares twice by 25 per cent with the excuse of improving the condition of trains.But atlast it was decided that there would be only 35 per cent increase in fares and not 100 per cent. After increase in fares, train passengers would have to pay an additional amount of Rs250 per head.

15. What determines price on your product – quality, size, demand, tourist trade?

Quality as well as demand of having a good railway system is the main diferentiating point that determines our price because the passengers are now fed up of old and deteriorated railway system of Pakistan.Thay want change for which they are willing to pay high prices.But are not chrding prices just due to demand rather than that we will also provide quality services to our customers.

16. What is your conclusion about your expected market share?Our market share will be difinately increased if we complete this project because train travellers are more in Pakistan and they will prefer fast train than others.

17. Are there any legal. environmental or economic factors , which may impact on the business?

In Pakistan as the economy is down which may have an impact on our project like Increasing Inflation rate , decreasing per capita income , deficit budget etc.The success of any business is dependent on its economy but Pakistan have poor economic system and Government keep on changing without completing the previous projects.So all these factors may effect our srevices.

Competition Analysis:

Who are your major competitors?

Our major competitors are indirectly competing like Daewoo service, Pakistan Railway and the upcoming project of Punjab govt. for bullet train.

What are the major strengths of each?

Daewoo transits goods and people at low rates and with fast speed.

Pakistan railway is reviving but is suitable for lower class with lowest possible fares. Moreover, its tracks are already everywhere in Pakistan.

What are the major weaknesses of each?

Pakistan railway is considered as very slow and mostly late arriving train to destinations dissatisfying passengers.

Daewoo is considered to be unaffordable for poor population and middle class having high fares for far destinations.

What are their production capabilities?

Daewoo is capable of having any bus repaired within no time due to availability of enough finance and fast transit with no or less duration of stay is actual value to their services. They are operating in all the recognized areas on Pakistan.

Pakistan railway has low capabilities of good services because of their outdated engines and trains and enough attention is required for its revival.

Familiarity with certain factors:

Price structure: Pakistan railways charges Rs. 20 to Rs. 490 for upto 600 km. Rs. 800 for upto 1000 km.

Daewoo charges fares of the routes classified by us as:

Departure Arrival Luxury Premium Plus

LAHORE ABBOTTABAD Rs 1,450 Not available

LAHORE BAHAWALPUR Rs 1,250 Not available

LAHORE BATKHELA Rs 1,500 Not available

LAHORE BHAKKAR Rs 1,250 Not available

LAHORE CHINIOT Rs 500 Not available

LAHORE CHOWK BAHADURPUR Rs 1,800 Not

available

LAHORE DASKA Rs 450 Not available

LAHORE DERA GHAZI KHAN Rs 1,150 Not available

LAHORE DERA ISMAIL KHAN Rs 1,350 Not available

LAHORE DHARKI Rs 2,000 Not available

LAHORE FAISALABAD Rs 530 Not available

LAHORE GUJRANWALA Rs 320 Not available

LAHORE GUJRANWALA CHANN DA Rs 300 Not available

LAHORE GUJRAT Rs 450 Not available

LAHORE HARIPUR Rs 1,380 Not available

LAHORE HYDERABAD Rs 3,350 Not available

LAHORE JHANG Rs 700 Not available

LAHORE JHELUM Rs 620 Not available

LAHORE JHOR ABAD Rs 650 Not available

LAHORE KARACHI Rs 3,800 Not available

LAHORE KHANEWAL Rs 880 Not available

LAHORE MANGLA Rs 650 Not available

LAHORE MARDAN Rs 1,290 Not available

LAHORE MIANWALI Rs 1,000 Not available

LAHORE MIRPUR Rs 700 Not available

LAHORE MORO Rs 2,750 Not available

LAHORE MULTAN Rs 950 Not available

LAHORE NOWSHERA Rs 1,320 Not available

LAHORE OKARA CANTT Rs 480 Not available

LAHORE OKARA CITY Rs 400 Not available

LAHORE PESHAWAR Rs 1,330 Rs 1,750

LAHORE RAJAN PUR Rs 1,500 Not available

LAHORE RAWALPINDI Rs 1,270 Rs 1,500

LAHORE SADIQABAD Rs 1,800 Not available

LAHORE SAHIWAL Rs 530 Not available

LAHORE SARGODHA Rs 530 Not available

LAHORE SIALKOT Rs 500 Not available

LAHORE SUKKUR Rs 2,350 Not available

LAHORE SWAT Rs 1,600 Not available

LAHORE TAUNSA SHARIF Rs 1,500 Not available

LAHORE MUZAFARGARH Rs 1,040 Not available

LAHORE AHMED PUR EAST Rs 1,360 Not available

Product lines (quality, breadth and width):

Daewoo provides the following services to customers:

Travelling services Bus service Workshop service Dastarkhuwan family restaurant

Pakistan railways provide the following type of services:

Saloon Steam buffs Marketing Information technology PR academy Store inventory visibility system

Facilities of saloon

Separate Bed Room Sitting room with sofa cum bed Refrigerator Kitchen with complete crockery Toilet with Shower, Geyser and Bath Tub If more accommodation is required, Pakistan Railways also offers the maximum 4

coupe of AC Business with 6 berths each.

Product depth:

Luxurious Carriage Luxury Saloon Portion For Three Passengers Only

( LAHORE- KARACHI ) ( Rawalpindi -Karachi )(LAHORE-RAWALPINDI)

Location:

Pakistan railways is operating all over the Pakistan. Its tracks lies from Khyber to Karachi.

Daewoo covers the areas like shown in the map:

Promotional activities:

The Railways network runs through the length and width of the country and where there is a rail track there is Railways real estate. Most of this huge land bank is situated at prime locations through out all towns and cities which provides advertisers with a very lucrative business opportunity. All advertising related business such as : Billboards, fleet advertising, Platform advertising, corporate and product branding on PR network, rolling stock and properties are dealt with by this department. Commercial deals, identification of locations as well as permissible advertising sizes and methodology of payment have been completely streamlined. The mechanism for advertising on Railways network has also been fully simplified into a one-window operation for prospects interested in advertising anywhere on the entire Railway network through out the country.

Daewoo makes the promotion as by following strategies:

Promotional strategy (push, pull, etc.) Advertising Personal selling & sales force Sales promotions Public relations & publicity

a) Advertising:

Any non personal paid form of communication using any form of mass media.

b) Public relations:

Public relations involve developing positive relationships with the organization media public. The art of good public relations is not only to obtain favorable publicitywithin the media, but it is also involves being able to handle successfully negativeattention.

b) Sales promotion:

It is commonly used to obtain an increase in sales short term. It can involve usingmoney off coupons or special offers.

c) Personal selling:

Selling a product or service one to one is called personal selling.

d) Word of mouth:

The passing of information from person to person is word of mouth. Originally theterm referred specifically to oral communication (literally words from the mouth), butnow includes any type of human communication, such as face-to-face, telephone,email, and text message.

e) Direct Mail:

Is the sending publicity material to recipients of postal mail. There has been amassive growth in direct mail campaigns over the last 5 years.

Organizations can paythousands of pounds for databases, which contain names and addresses of potentialcustomers.

Sources of supplies:

Daewoo is a Korean company and imports its buses from korea. There is no as such direct supplies for Daewoo but additional services for food occur for which their supplier is any local agent.

Pakistan railway is also a service provider and does not have any direct supplies. Moreover, they do not offer food to passengers. Pakistan railway contacted Chinese for their railway engines recently.

Image from consumer viewpoint:

Pakistan railways is preferred travelling by poor class. Any normal middle class or high class person never prefers Pakistan railway over Daewoo. Especially when time is the sue, none want to suffer in Pakistan railways. Services of Daewoo are always preferred over Pakistan railways by upper and middle class personnel.

Do you know any of the new competitors?

No. no new competitors exist for our bullet train project. We are the only one launching the bullet train project. So, we are creating monopoly but being Pakistani patriot, the extra fares from people will not be charged in order to maximize the benefit from project for welfare of beloved country.

Do you know of any competitors plan for expansion?

Daewoo has an upcoming project of expansion in Baluchistan. Its project consists of two destinations like Gwader and Quetta. Secondly Daewoo announced its expansion in services on September 27, 2013. The Daewoo Pakistan Express Bus Service is a cross-regional bus service, with more than 35 terminals across the country. The project involves the expansion of the group’s intercity bus operation through the construction of new terminals, the upgrade of existing terminals, the acquisition of 60 new buses and the improvement of IT infrastructure.

Pakistan railway is collaborating with CREC (China Railway Engineering Cooperation) for expansion. It includes forming alliance with china.

Have any firms of your type gone out of business lately?

No. none of businesses of our type has gone out because we are the first to start the business of this type in Pakistan. Daewoo and Pakistan railways are our indirect competitors.

Do you know sales and market share of each competitor?

Ar present Pakistan railways comprises 8136km , 1212 stations. But the marketing share is going to decline everyday. It carried 145 million passengers in 1970’s. which has come down to 59 million in 1992-1993. Now only 5% people use Pakistan railways for travelling.

Profit level of each competitor?

Pakistan railways is running in loss. Daewoo Pakistan does not prepare its statements separately in Pakistan.

Are we able to meet competitors?

Yes we are able to meet the competitors because our project is unique in nature which will provide fast transport at low price to public serving four locations only. But these cities are most frequently travelled cities in Pakistan.

MARKETING STRATEGY

How will the market be accessed?

We will access our market easily because the location we have choosed is consist of people that ar emore train traveler.They will automatically switch to the bullet train when they will something new in it.

What is the competitive advantage of your product?

The train will facilitate people in following way: Save hours of travelling. Trade will surely increase. Students will be benefited. People will get something new to entertain themselves. It will be a source of Income for Govt.

It will definitely create employment opportunities. The relationship between China and Pakistan will be strengthened. Villagers will get easy access to cities.

What will attract customers to your product?Following things will defferentiate us from our competetors.

Our quality services that we are provided by us On time arrival and departure Online booking Clean Atmosphere Normal Charges Fast and Safe Journey Job creation for IT profeesionals and other educated residents. It

will equally be feasible to un-educated people also.

What pricing method will you probably use?

We will use cost plus spricing method.We will charge everyone according to the facilities taken by him/her.There are three different classes of seat and charges will be accordingly.

According to the said class which is as follow:

Air-conditioned sleeper (recommended); 1st class sleeper; Rs. 950 Air-conditioned lower class (both seat & sleeper versions); Rs. 800 Parlour car (comfortable open-plan seating.  Recommended for

daytime journeys); Rs. 650 Economy class seats; Rs. 500 2nd class - seat and sleeper versions. Rs. 350

What promotional methods will you use?

We will do promotion by using different kinds of media like:

1. Newspapers2. Magazines3. Sign Boards4. Internet5. Television6. Radio

TECHNICAL OR PRODUCTION ANALYSIS

Does the site have the desired characteristics and available utilities and transportation facilities, etc.?

Utility

Electric power resources

Transportation facilities

We are provided high speed bullet train transportation facilities. These are

Track built specially for high-speed travel or specially upgraded for high-speed travel.

Designed operating condition

What are the technology needs for the proposed business?

Following are the technology need for the proposed business

Electromegatic suspension technology Electrodynamics suspension technology Computers Cameras Mobile phone technology Lasers Circular technologies

What are the equipment requirements?

Electrical Equipment

Electrical Equipment includes generators and compressors because we will need it so that in case of load shedding we may use it and there will be no wastage of time.

Control Panels There will be load control panels for our project because over load and inner load of electricity may be harmful for train passengers.

What are the production costs (to be included in the finance section)?

Feasibility Studies Land Acquisition Integrated infrastructure development Machinery and automation

Will the technology level achieve the intended production levels?

Yes the technology level achieved the intended production level through

Operations Management technology Logistics Quality Productivity

What will the production process be?

The production process is

Automated welding machine Timescale Design Operational tools Manufacturing Engineering Configuration Control Materials & Equipment Buying Parts Manufacture Under frame Sides Body shell Assembly Roof Ends

What are the product storage requirements etc?

Pipeline construction storage Pipeline operation storage

Is there availability of local labour?

Yes we will provide the availability of local labour because our bullet train will be available for every kind of person.

Are there any legal or environmental factors or others developments which may impact on the business?

Legal or environment factors or others development are

Environmental PollutionThere will be no gaseous emotion but due to high vibration because of electricity usage there will be noise pollution. But its advantage is more than its noise. Other than that there is no need of disposing any kind of material wastage in case of bullet train.

Labour SituationsFirst of all we will remove the system of double hiring of people and we will hire labor from it. As cheap labor is available in Pakistan but it is not mostly skilled. So, we will have to give training to the elanor force to run such type of train.

Climate ConditionsThere is no issue of climate for completion of our project because Pakistan have four seasons which is good for it. As the train will run through electricity for this purpose we will install some type of conductor so that there will be no short circuit and of there will be too much bad climate then we will delay train.

Management capability:

Requirements for management positions:

Top management:

It will consist of CEO of the company. The CEO will be responsible for the strategic decisions of the project. Any big change and negotiation with govt. authorities will be done by him or on the behalf of him. The signing of contracts with different parties and sponsors will be done by CEO. The person will be responsible for the management of project and supervising the middle levels and lower levels managers for controlling the project.

Middle level managers:

The managers must be able to co-ordinate with other peer managers and lower level managers. These have the responsibility of implementing the top management’s decisions while implementing, supervising and controlling the project.May consist of chief administrative officers and human resource managers.

The importance of MIS manager and IT manager cannot be ignored. He is the person responsible for all the working of bullet trains systems because we are going to operate using computers not by drivers that occur in traditional system.

Reporting system (i.e., related to MIS) is important because we need to submit reports of daily functioning as well as business transactions to top level management.

Lower level and staff:

The managers having the responsibility of dealing with performing staff and sometimes with public can be maintaining different positions.

Describe the skills you need to bring to the business:

The required skills needed to bring the business in profitable condition are:

Proper knowledge with system handling through computers Expertise in time management Analytical ability Leadership and negotiations Better communication skills Decision making Handling emergency conditions Co-ordination and teamwork

Existing capabilities within the business:

Promoters must have the ability to forecast the situation in order to be fruitful in the future.

FINANCIAL ANALYSIS

Are you sure that you have considered all costs, variable and fixes, that shouls be allocated to the new enterprise?

Yes, we have all kinds of costs related to our project.It includes:

The bullet train project may be costing 15.39 million dollar per km.

Inflated at 21.546 Route of Faisalabad to Islamabad= 321.5 km

o Total cost will be = 6927.039 million dollars. Or 6.9 billion dollars.

Route of Multan to Faisalabad= 246.2kmo Total cost will be = 5304.6252 million dollars or 5.3 billion dollars

Rote of Lahore to Faisalabad= 175.6kmo Total cost will be = 3783.4776 million dollar or 3.8 billion dollars.

Total funds requirement for tracks(single) is 16 billion dollars Double track will cost about 32 billion dollar at-least. Cost of one bullet train to be imported = Rs. 5 Billion Cost of three bullets trains will be = Rs. 5 billion x 3 = Rs. 15 billion Extimated cost of labour = months x wage per month for one labor x no. of labor

needed

= 18 x 30,000 x 100 = 54,00,000 or 5.4 million for one project

= for three projects = 5.4 million x 3 = 16.2 million (at least)

= at most figure can be 50 million (Estimated)

Machines on rent will be used, not purchased to save the cost. Approximately cost will be as follows:

= rent per machine per week x No. of weeks x no. of machines

= 40,000 x 80 x 20 = 64 million

Material cost will be approximately as 60 million (it shows a very rough estimate). Other overhead cost are estimated roughly to be 50 million which includes the cost of software, centralized system installation cost and others, etc.

By calculating the total cost, we get the following:

= 15,000,000,000 + 50,000,000 + 64,000,000 + 60,000,000 + 50,000,000

= Rs. 15,224,000,000

Dou have enough information to prepare projected statements for the next three years?

As the project is at initiating level so we may not get all kind of information related to statements but when it will be completed we will be in a better position to prepare all kinds of statements related to it.

.Have yoy done sensitivity analysis to predict the impact that possible variations in costs and revenues will have on profitability?

Yes, we have done sensitivity analysis.There are no. of factors that may effect our profit:

Economic Conditions Per Capita Income Inflation Rate Import Duties Demand of Customers Electricity Shortage etc.

When will the enterprise reach the break even point?

As soon as we will start the project, we will calculate its profits.But it is estimated that our project will be completed in 1.5 years so upto that time we have to incurr all kinds of costs that will definitely give us profit in the coming years to get break up point.

When will the business become profitable?

As soon as our project is completed and after having break even point we will startn earning the actual revenues that will better define our profitability position.

` CULTURAL APPRAISAL

It will be safe from culture point of view of Pakistan as cabinets of men and women will be separate.Smoking will not be allowed in it and addicted passengers will not be permit to sit in the train.

SAFETY APPRAISAL: It is also safe from security point of view because of safety alarm and checking system and it is also assured that this project will not have any adverse effects on the environment.

POLITICAL APPRAISAL:It is a politically feasible project because there will not be any influence political in it and we have just taken government’s permission to complete this project

REQUIRED FINANCING:

Cost =$20 million per kilometer

Kilometer from (Lahore to Faisalabad)=155km

(Islamabad to Faisalabad)=412km

(Multan to Faisalabad)=235km

Total kilometers = 802

Total cost = (802 * 20 million)

= $160 billion (approx.)

For controlling offices we can need about 5 billion rupees and softwares. Finance from sponsors like big industry unis in Pakistan. Being the large project

investment it cannot be managed by just one company, so we will collaborate with different industries for financing the project.

LIMITATIONS OF PROJECT:

Following are the limitations of our Project

Costly Small area coverage Instable political conditions Terrorist activities Inflation

RECOMMENDATIONS:

We strongly recommend that this project must be implemented but a proper security system must be arranged. If one the one hand, it facilitates nation but most probably terrorist can also drive benefit for terrorist activity.

Appendices:

1. http://www.siasat.pk/forum/showthread.php?188773-NAWAZ-Sharif-ALREADY-discussed-Bullet-Train-project-with-investors

2. https://www.google.com.pk/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=distance+between+FSD+and+multan

3. http://www.virgintrains.co.uk/about/4. https://www.google.com/maps/place/Faisalabad/@31.7542289,71.3484764,7z/data=!

4m2!3m1!1s0x392242a895a55ca9:0xdec58f88932671c65. http://en.wikipedia.org/wiki/California_High-Speed_Rail