Submitted to

Prof. B.K.Chadha
Submitted by
Nitika Takkar 09BS0001473
Rishabh Hingar 09BS0001902

Varun Shankardass 09BS0002654

Table of Contents
Executive Summary................................................................................3
Opportunity Analysis.............................................................................6
Market & Demand Analysis..................................................................9
Generation.................................................Error! Bookmark not defined.
Analysis..................................................................................................13
S t r e n g t h s ............................................................................................................16
O p p o r t u n i t i e s ....................................................................................................16
T h r e a t s ................................................................................................................16

Technical Analysis................................................................................17
Environmental Analysis.......................................................................22
Social Cost Benefit Analysis.................................................................24
STRUCTURING OF THE PROJECT...............................................28
Financial Projection..............................................................................35
Financial Projection
 Executive Summary

Project Title: Setting up a Thermal Power Project.

DESCRIPTION OF THE PROJECT

This project aims to set up a Thermal Power Project. This is a coal based Thermal Power Plant.
In the first Phase our production target will be 250 mw. We will supply the electricity for the
house hold and Commercial use.

Location: - (Kerala)

Input

In thermal power plant Inputs are as coal, Water and labor.

Process

Thermal energy is derived from Boilers by burning Coal and the steam produced in Boilers is led
to rotate Steam Turbines, which in turn act as the prime movers of Alternators for generating
Electrical Power.

Output

As the Steam releases heat energy to turn the turbine, its temperature drops. To reuse water used
in Generating Power, the Steam is condensed back into water. To condense the steam, it is
discharged into a vacuum and passed over cooling water in tubes.

Outlay of the Project

• Land – 111 crores

• Construction –181 crores
• Plant & Machinery-621crores
• Administration – 54 crores
• Working capital -35 crores
• Misc Expenses-68crores
 • Total expenditure – 1070 crores

Funding

• We will take Long Term as well as short term loan from Financial Institution.
• 100 crore will be self capital.
• We will introduce our IPO in Indian stock market.
Time Frame
• The process of hiring the players will start by the end of year 2014.
• The Main factory will be ready by September-October 2017.
• The production will be started in the January, 2018.

Revenue Generation Model

• Selling Electricity Commercial and industry.

• Selling Electricity to house hold.
• Selling Electricity to neighbor state.

The project implementation stages:

Phase I – This phase helps to evaluate, understand and identify the need to set up Thermal power
project. It will take almost 6-8 month to develop a clear idea.

Phase II – In this phase a layout will be prepare to where form the funding will come for the
project. And things have to be done for the project
➢ Like,
➢ Selection of location for Power Project- 6-8 month
➢ Selection of lands - 8-12month.
➢ Selection of vendor - 4-5 month

Phase III: according to the plan made in Phase II the thing will be implemented. In this phase
important things have to done like,
➢ Building the Administrative offices at the suitable location -8-12 months
➢ Hiring of trained employee-4-5 months
➢ Purchasing office equipments and fixed assets – 5-6 month.
Phase IV – In this phase it will be observed that any necessary changes will have to be done
form the initial plan. Experts in this phase will focus on the progress of work, with the time and
cost involve with it. There will be definite some changes in the macro-economic factors while
implementing the project. For that the experts who are implementing the project will have to take
corrective action to mitigate that kind of risk, which can have a significant effect on the project.

Some of them like,

➢ Changes in govt/regulatory authority norms.
➢ Cost of labor.
➢ Cost of land.
The corrective measure will be implemented in this phase so that the company can starts its
operation.
 Opportunity Analysis
Introduction
Power is the most fundamental necessity of modern day life. Power Industry in India is one of
the most important infrastructure heads that the government is set to focus on. Despite poor
performance in last few years, the power sector provides a host of opportunities and power
generation, distribution and equipment related companies are set to en-cash on the UPA
government’s drive to ensure ‘power for all by 2012’.
Growth of the Industry
Electricity production in India had begun well before the independence. After the country
achieved independence, the government took the reins of electricity generation in its hands in
order to take the service to each household. Over the four decades following independence,
power generation capacity in India has made huge progress.
However, as has been the case with most other government monopolies, power industry too has
not been able to perform on metrics of efficiency, consistency and reliability. Despite large
increase in capacity, overall supply remains below the demand. Large section of the population
either remains without power or receives infrequent and unreliable service characterized by
frequent power cuts and fluctuating voltages.
Power industry in India also experiences high transmission and distribution losses. Both
technical and non-technical issues contribute to these losses. Decades of government monopoly
over the sector has led to a number of inherent weaknesses in the system including poor
metering, lack of investments in distribution networks resulting in overloaded feeders, ill-
maintained substations and aging transformers.
By the end of eighth decade of last century, the state controlled power units were struggling with
mounting losses, depreciating capital equipment, lack of fresh investments and environmental
concerns. Understanding the hardships being faced by the public units, and their inability to meet
the socialist agenda of taking power to each house, the government embarked on power sector
reforms during early 1990s, although at the wrong end of generation instead of distribution.
However, power sector remained one of the most underperforming sectors even during the post
reform period. With the rapid industrialization, demand for electricity has been increasing at a
fast pace and the supply has been far short of expectations. Successive governments have failed
to meet targets set under the five-year plans. In the ongoing Eleventh Five Year Plan (FYP) the
government set a target of adding 78,000 mw of power generation capacity, which has been
brought down to 60,000 mw. However, even the revised target looks difficult to be achieved.
Opportunities For Private Players
With government’s focus on ensuring ‘power for all’ by 2012, both the private as well public
investment in the sector is set to get a boost. Power industry is already witnessing a record
investment with projects worth about Rs 10 lakh crore are under implementation by end-October
2009 compared with nearly Rs 6 lakh crore of projects a year ago.

To meet the soaring power deficit in the country the government has changed its strategy and
have announced 14 coal-based ultra-mega power projects (UMPPs), with a capacity of 4,000mw
each. As of now, the government has allotted four projects — three to Reliance Power and one to
Tata Power. Three other power projects are coming up for bidding in two months.
With the completion of civil nuclear deal with the US, investment is likely to pick up even more
in coming 1-2 years with a lot of money going into nuclear power plant construction and other
equipment manufacturing.
Current Scenario
Indian economy has recovered rapidly from the aftermaths of global economic crisis that
surfaced in the second half of 2008. The newly elected UPA government has put a great
emphasis on infrastructure development to take the economy back to the high growth trajectory
witnessed in the pre-crisis period. To achieve this, infrastructure is being given top priority in the
policy-making and along with roads and highways, power generation is one of the key areas
where government is committed to substantially improve its performance. As a result, the
government has taken a number of policy initiatives aimed at attracting greater private
investment and things are looking to move into the right direction.
 Market & Demand Analysis
Indian Power Sector Outlook
Power sector has been an underperformer in terms of capacity addition over last few years.
Compared with an average growth of GDP by over 9% in last four years, electricity generation
has increased by 4% only. However, in order to maintain a healthy growth rate of economy, the
pace of power generation will have to be increased in the country.
As such, the UPA government has given high priority to the power sector and has started an
ambitious plan of taking power to all areas of country by 2012. Although the capacity addition
target of 78,000mw over the 11th Five Year Plan looks unachievable now, with renewed
emphasis on the sector, the government may still be able to achieve close to 60,000 mw of new
capacity, which will generate tremendous opportunities for power generation as well as
transmission companies.
There are also vast opportunities in the nuclear power segment. Even as the operation of nuclear
energy plants remain in the hands of government for now, private companies have a big role to
play in construction of power plans as well as supply of many components there of. Overall, the
power sector provides huge opportunities in near term.

Incentive to green energy

The government on recently unveiled new norms aimed at making the renewable power more
profitable investment. The Central Electricity Regulatory Commission, (CERC) apex body
regulating power tariffs in the country, has notified the tariff regulations for electricity
generated from renewable energy sources which aim at providing more return to such projects.
As per the new tariff plan, companies investing in the renewable energy projects will get 19%
pre-tax return on investments for the first 10 years of operation while during rest of lifetime of
project 23% return would be guaranteed. This is significantly higher than maximum return of
18.4% that thermal power units can fetch.
Timely implementations of power projects
The government has recently announced in the Parliament a number of steps aimed at ensuring
time implementation of power projects. These include:
• Monitoring mechanism has been strengthened to achieve targets by designating a nodal officer
in the Central Electricity Authority for each project. The bottlenecks if any are identified and
solutions thereof are decided in consultation with project authorities and executing agencies.
• Review of progress of project is now done at the highest level i.e. Secretary (Power),
Chairperson, CEA.
• The ministry of power has constituted Power Project Monitoring Panel (PPMP) having
consultants to monitor projects for effective monitoring of projects. • An advisory group of
retired Secretaries (Power) has been constituted and is functioning to advise MOP on the major
issues of concern coming in the way of timely completion of Projects.
Latest Developments
Growth of power generation improves in 2009-10
After going down sharply in the last fiscal, the growth of capacity generation has improved
swiftly over the current fiscal so far. In the last fiscal, total power generation grew by a meagre
2.7% to 421,092 million units (mu). However, in the first eight months of the current fiscal,
electricity generation has registered a growth of 6.4% to touch 448,416 mu compared with
421,092 mu of electricity produced over the same period last year.

Capacity generation however continues to remain lacklustre. In the fiscal 2008-09, the
government had a target of adding 11061 mw of new capacity against which it could manage
only 3453 mw of capacity addition, a shortfall of whooping 68.7%. In the present fiscal,
capacity addition target till the month of October was set at 14507 mw, of which only 5767 mw
has been achieved, reflecting an achievement of nearly 40% only.

The government has said recently that the continuous delays in power projects was primarily
due to poor domestic capacity of producing electrical components which forced the project
directors to depend on large imports marred with chronic delays. The Ministry of power has
started a program to double the capacity of electrical components manufacturing in the country
which should help improve the degree of target achievement going forward.
Demand-supply deficit declines
Average deficit in electricity demand and supply that has been increasing over the last few
fiscals has started to come in the current fiscal. During 2008-09, average power deficit rose to
11.1% from 9.61% in the previous fiscal However, the performance has improved in the current
fiscal with average deficit coming down to 9.5% in the first eight months of FY10.

Peak deficit has already been declining over last few fiscals owing to improved management
and increased inter-regional power exchange. During the FY 2007-08, about 43,000 mega units
of inter-regional energy transfer was facilitated--an increase of about 13% compared to the
previous year (about 38,000 mu).
Recent Policy Initiatives
Modifications to Mega Power Plant Policy
The Union Cabinet on October 1, 2009 approved modifications in the existing Mega Power
Policy that was introduced in 1995 for providing impetus to development of large size power
projects in the country. As per the modifications:
(i) The existing condition of privatization of distribution by power purchasing states to be
replaced by the condition that power purchasing states shall undertake to carry out distribution
reforms as laid down by the Ministry of Power.
(ii) The condition of inter-state sale of power for getting mega power status to be removed.
(iii) The present dispensation of 15 percent price preference available to the domestic bidders in
case of cost plus projects of PSUs to continue. However, the price preference will not apply to
tariff based competitively bid projects of PSUs.
(iv) The benefits of Mega Power Policy will also be extended to supercritical projects to be
awarded through ICB with the mandatory condition of setting up indigenous manufacturing
facility provided they meet the eligibility criteria.
(v) All other benefits under Mega Power Policy available to Greenfield projects would also be
available to expansion unit(s) (brownfield projects) even if the total capacity of expansion
unit(s) is less than the threshold qualifying capacity, provided the size of the unit(s) is not less
than that provided in the earlier phase of the project granted mega power project certificate.
All of these are welcome changes and will help the private investors in a number of ways. The
condition that power purchasing states shall undertake to carry out distribution reforms is a
positive change as along with easing the norm for seeking a mega power project status, it would
also expedite distribution reforms. Removing the condition of inter-state sale of power is
also encouraging development as earlier only the power plants selling electricity on a long-term
basis to two or more states were eligible for seeking a mega power project status. Given the
significant demand for power across all states, mandatorily selling power inter-state for the tax
incentives was anyway an obsolete requirement.
The benefits of Mega Power Policy to be extended to projects based on supercritical technology is also a
very positive move as it would provide a thrust for shifting on to clean coal technologies that minimize
carbon foot prints. Finally, the move to extend the incentives under the Mega Power Policy to brownfield
expansions by existing mega power projects would significantly reduce the tax costs on capacity
expansions for existing power projects and therefore would boost massive capacity expansions through
brownfield expansion.

Analysis
Trend analysis
The term "trend analysis" refers to the analysis of data that exhibits an ongoing upward or
downward pattern that is not due to seasonality or random noise. Analysing trends is useful in
detecting patterns that could lead to future quality problems, and in forecasting future demand
periods.
In project management trend analysis is a mathematical technique that uses historical results to
predict future outcome. This is achieved by tracking variances in cost and schedule performance.
In this context, it is a project management quality control tool.
The trend analysis of the Industry is done here by two methods.
➢ Exponential Trend Analysis
➢ Moving Average Method
The factor considered by us for the Trend analysis is the power generation over the period of
years.
India's power generation has grown with nominal rate at 0.65% in December 2008 compared
with 3.90% increased in December 2007. Thermal, hydro and nuclear are three major source of
power generation. Thermal power generation recorded positive growth at 3.25% in December
2008 however hydro and nuclear were recorded negative growth rate at 12.41% and 21.62%
respectively in December 2008 compared with December 2007.
 Trend in Power Generation in India
Power Generation in
in billion KWH
India in billion KWH
Trend Analysis
Trend Analysis
Gross Energy (Exponential)
Year (Moving Average
Generated (A) {F1=F0+0.2*(A0-
Method)
F0)}
1980 – 81 129.2 129.2 129.20
1981 – 82 131.1 129.2 131.10
1982 – 83 140.3 129.58 140.30
1983 – 84 151 131.72 133.53
1984 – 85 169.1 135.58 140.80
1985 – 86 183.4 142.28 153.47
1986 – 87 201.3 150.51 167.83
1987 – 88 219 160.67 184.60
1988 – 89 241.3 172.33 201.23
1989 – 90 268.4 186.13 220.53
1990 – 91 289.4 202.58 242.90
1991 – 92 315.6 219.94 266.37
1992 – 93 332.7 239.08 291.13
1993 – 94 356.3 257.8 312.57
1994 – 95 385.5 277.5 334.87
1995 – 96 418.1 299.1 358.17
1996 – 97 436.7 322.9 386.63
1997 – 98 465.8 345.66 413.43
1998 – 99 496.9 369.69 440.20
1999 – 00 532.2 395.13 466.47
2000 – 01 554.5 422.54 498.30
2001 – 02 579.1 448.94 527.87
2002 – 03 596.5 474.97 555.27
2003 – 04 633.3 499.27 576.70
2004 – 05 665.8 526.08 602.97
2005 – 06 672.4 554.02 631.87
2006 – 07 697.4 577.7 657.17
2007 – 08 704.47 601.64 678.53
2008 – 09 744.34 622.21 691.42
2009 – 10 projected 646.63 715.40
Output of Trend Analysis – Exponential method (1980 – 2009)

Interpretation:
The output (Fig.7) shows that there has been gradual and continuous growth
in power generation in India, the trend analysis using exponential method
also shows the similar curve in growth, showing the projected power
generation for the year 2008-09 in the growing pattern.

SWOT Analysis
SWOT analysis is a tool for auditing an organization and its environment. The aim of any
SWOT analysis is to identify the key internal and external factors that are important to achieving
the objective. SWOT analysis groups key pieces of information into two main categories:
➢ Internal factors – The strengths and weaknesses internal to the organization.
➢ External factors – The opportunities and threats presented by the external environment to
the organization

Strengths
• Well established and vast T & D network.
• Non conventional energy resource base
• Regulatory mechanism for tariff setting established
• Emergence of strong and globally comparable central utilities:

Weaknesses
• Persisting shortages
• Power theft
• Pitfalls in billing and revenue collection
Opportunities
• Natural sources
• Use of digital technology
• Rural electrification
• Untapped hydro power in northeast

Threats
• High AT & C losses (Aggregate technical and commercial losses)
• Waste generation leading to environmental damage

Technical Analysis

Important factors in site selection for Thermal power plants

In general, both the construction and operation of a power plant requires the existence of some
conditions such as water resources and stable soil type. Still there are other criteria that although
not required for the power plant, yet should be considered because they will be affected by either
the construction or operation of the plants such as population centers and protected areas. The
following list lists most of the factors that should be studied and considered in selection of proper
sites for power plant construction:

 Transportation network: Easy access to transportation network is required in both

power plant construction and operation periods.

 Gas pipe network: Vicinity to the gas pipes reduces the required expenses.

 Power transmission network: To transfer the generated electricity to the consumers, the
plant should be connected to electrical transmission system Therefore closeness to a
electric network can play a roll.

 Geology and soil type: The power plant should be built in an area with soil and rock
layers that could stand the weight and vibrations of the power plant.
  Earthquake and geological faults: Even weak and small earthquakes can damage many
parts of a power plant intensively. Therefore the site should be away enough from the
faults and previous earthquake areas.

 Availability of laborHuman resource is very important factor and cheap manpower helps
in reducing the cost of production.

 Topography: It has been proved that high elevation has a negative effect on production
efficiency of gas turbines. Therefore, the parameters of elevation and slope should be
considered.

 Rivers and floodways: The power plant should be at a reasonable distance from
permanent and seasonal rivers and floodways.

 Water resources: For the construction and operating of power plant different volumes of
water are required. This could be supplied from either rivers or underground water
resources. Therefore having enough water supplies in defined vicinity can be a factor in
the selection of the site.

 Environmental resources: Operation of a power plant has important impacts on

environment. Therefore, priority will be given to the locations that are far enough from
national parks, wildlife, protected areas, etc.

 Population centers: For the same reasons as above, the site should have an enough
distance from population centers.

 Need for power: In general, the site should be near the areas that there is more need for
generation capacity, to decrease the amount of power loss and transmission expenses.

 Climate: Parameters such as temperature, humidity, wind direction and speed affect the
productivity of a power plant and always should be taken into account.

 Area size: Before any other consideration, the minimum area size required for the
construction of power plant should be defined.

 Distance from airports: Usually, a power plant has high towers and chimneys and large
volumes of gas. Consequently for security reasons, they should be away from airports.

 Archeological and historical sites: Usually historical building …are fragile and at same
time very valuable. Therefore the vibration caused by power plant can damage them, and
a defined distance should be considered.
Raw Material procurement
Plant uses coal for generation of electricity. Its daily requirement of coal is about 10476 metric
tons, delivered from ernakulam Coalfields, Idukki Coalfields and Kollam Coalfields. The coal
supplied is sampled using a computerized system and sent to the laboratory for testing. This
ensures that properly graded coal is being used.

LAND REQUIREMENT & AVAILABILITY

For a 675 MW thermal power plant, around 598 Ha. Of land will be required for Plant, Raw
Water Storage, Green Belt, Ash Disposal etc. The break up of the land requirement is as follows:

Land Requirement Area (in Hectares)

Main Plant (including power plant, water 195 Ha.
treatment plant & reservoir, adm. building etc.)
Green Belt 200 Ha
Ash Disposal Area 162 Ha.
Others (rail, road, intake pipe corridors) 41 Ha
Total 598 Ha
FUEL REQUIREMENT & AVAILABILITY
For a 675 MW Thermal Power Plant, raw coal is proposed to be used as a base fuel. The daily
coal requirement shall be about 10476 tonnes based on gross calorific value of 2000 Kcal/Kg, @
MCR and 1230 Kcal/KWh unit heat rate. The annual coal requirement would be about 2.58
MTPA considering 90% plant load factor.

ASH UTILIZATION & ASH DISPOSAL

At this thermal power plant, various avenues for utilization of ash in application areas shall be
explored.

With all possible efforts it is expected that fly ash generated at the thermal power stations shall
be utilized in the areas of cement, road construction, mine filling etc.

Clean coal technologies

Clean coal technologies offer the potential for significant reduction in the environmental
emissions when used for power generation. Several of these systems are not only very effective
in reducing SOx and NOx emissions but, because of their higher efficiencies they also emit
lower amount of CO2 per unit of power produced. CCT's can be used to reduce dependence on
foreign oil and to make use of a wide variety of coal available.

Projected Site Map

Process Layout
Thermal energy is derived from Boilers by burning Coal and the steam produced in Boilers
rotates the Steam Turbines, which in turn act as the prime movers of Alternators for generating
Electrical Power.
In a Boiler or Steam Generator, water is heated until it turns into Steam at temperature above 350
degree Centigrade, depending on the pressure of the Boiler. Then it is further superheated to
temperature above 500 degree Centigrade. When water is boiled into steam, its volume increases
about 1600 times, producing heat energy – the force used to turn the turbine rotor that generates
electricity.

In all Steam Generating Stations, the water used to create steam must be highly purified. This is
important because the steam is forced against the row of blades that rotate the shaft. Steam
constantly hits these metal parts, so even the tiniest impurities will erode the metal blades.
Therefore water is softened, filtered and demineralised until it is as pure as distilled water. Each
Generating Station has a chemical Lab where water purifying process is regularly monitored.

As the Steam releases heat energy to turn the turbine, its temperature drops. To reuse water used
in Generating Power, the Steam is condensed back into water. To condense the steam, it is
discharged into a vacuum and passed over cooling water in tubes.
Transport layout

 Transportation network: Easy access to transportation network is required in both

power plant construction and operation periods. Railway connection will be there upto
coal storage and a one way Road will be running through the plant.

 Distance from harbor: Usually, a power plant needs large volumes of coal. For this
purpose sometimes coal is imported. Therefore keeping this in mind the plant will be
situated in close proximity to a harbor, distance being approx. 5 kms.
To setup entire Transportation network the project cost will be 10 crore rupees.

Organizational Layout
 Environmental Analysis
ANTICIPATED ENVIRONMENTAL IMPACTS & MITIGATION
MEASURES

LAND USE
The proposed thermal power plant (675 MW) shall be installed in around 598 hectares of land at
Uddipi region in Kerala. The land is fully vacant land, free from habitation. The construction
activities are likely to attract a sizeable population. However, this will be only a temporary
change and shall be restricted to construction period. As soon as the construction phase is over,
the land use pattern modified to meet the requirement of construction phase shall be reversed. In
view of the above, no change in land use pattern is envisaged due to construction and operation
of the project.

WATER QUALITY
While developing the water system for the project, utmost care has been taken to maximize the
recycle/ reuse of effluents and minimize effluent quantity. As there will be no discharge of any
effluent outside the plant boundary, there will be no impact on the surface water quality of the
area.

NOISE
The operation of the proposed Thermal Power Plant is expected to generate relatively high and
continuous noise levels especially near Compressor House of Thermal Power Plant. However, all
the machineries will be within the permissible noise limit as per Environment Protection Act.
Operational activities are not expected to cause any undue
disturbances to the people living in the proximate areas outside the plant boundary. Impacts of
noise on workers could be minimized through the adoption of adequate protective measures in
the form of (a) use of personal protective equipment (ear plugs, ear muffs etc.), (b) education and
public awareness, and (c) exposure control through the rotation of work assignments in the
intense noise areas.

ECOLOGY
The surrounding area of the proposed THERMAL POWER PLANT has some vegetation in the
form of village orchards, roadside trees and agriculture. If the gaseous emission is controlled
properly, there will not be significant impact. There will be sufficient plantation of trees at the
plant site. All these measures, if implemented properly will ensure insignificant impact on the
local vegetation from the proposed project and may improve the vegetation scenario of the area.
The runoff from construction area may lead to a short-term increase in suspended solids and
decrease in dissolved oxygen near the discharge point in receiving water body. This may lead to
a temporary decrease in the photosynthetic activity of phyto-planktons, rise in
anaerobic conditions and food chain modification. However, for major part of the year during
construction phase, no detectable impact is expected because water quality will not change
significantly.

DEMOGRAPHY & SOCIO ECONOMICS

As the area is close to Dhenkanal Town, the skilled people from the town will be available to
work here. So, there will be no major change of local occupational scenario, though the
establishment of the proposed project will increase the direct and indirect jobs and other
economic opportunities. There will be some development of secondary service market, which
will be beneficial to the local economy.

GREEN BELT DEVELOPMENT PLAN

Out of the total plant area of 598 Ha, 200 acres shall be covered under green belt, which
constitutes around 33% of the total project area.

ASH UTILIZATION & ASH DISPOSAL

At this thermal power plant, various avenues for utilization of ash in application areas shall be
explored. With all possible efforts it is expected that fly ash generated at the thermal power
stations shall be utilized in the areas of cement, road construction, mine filling etc.

ENVIRONMENTAL MONITORING PROGRAMME

An environmental monitoring programme has been developed for the proposed THERMAL
POWER PLANT with the objective of assessing the changes in environmental conditions, if any,
during operation of the project; monitoring the effective implementation of mitigatory measures
envisaged and warning of any significant deterioration in
environmental quality so that additional mitigatory measures may be planned in advance.

DISASTER MANAGEMENT PLAN

The EIA Report includes a Disaster Management Plan covering elements of emergency planning
like organization, communication, coordination, procedure, accident reporting, safety review
checklist, on-site emergency plan and off-site emergency plan. During the commissioning of the
project, a detailed Disaster Management Plan (DMP) shall be prepared and implemented at site,
specifyingresponsibilities at various levels to be discharged in case of an emergency.

ENVIRONMENTAL MANAGEMENT PLAN

An Environment Management Plan for construction and operation phases of the project has been
prepared. For environmental management of proposed THERMAL POWER PLANT, an
Environmental Management Group shall be created at site, which shall act as coordinator for
environmental matters.

Social Cost Benefit Analysis

Introduction:
The main reason for doing social cost benefits analysis in projects is to subject a project to a
consistent set of general objective and national policy. The choice of reviewing different project
not only in term of the profitability but also it must be view in the contest of national impact and
this total impact has to be evaluated in terms of consistent and appropriate set of objectives.

SCBA method followed in this project:

Setting up a Thermal Power Project, the IDBI method has been used to analyze the Social cost &
the benefit of this project.

About the method: The develop financial institutions of India, probably most of them own by the
central of state govt evaluate all their projects mainly in terms of how much social benefit can
happen through their projects. In this project the method followed by the IDBI to analyze the
SCB will be used to find out the SCB of this project.

The social cost benefit analysis carried out by IDBI is based on three concepts:

i. Economic rate of return.

ii. Effective rate of protection.
iii. Domestic resource cost.

Capital Expenditure Estimates of project

Particulars Amount in(Cr.)

Land 148.5
Building 244.35
Plant and machinery ( imported) 163.35
Plant and machinery (indigenous) 676.35
Transportation cost 28.35
Technical know-how fess 55.35
Pre-operative expenses 19.71

BY IDBI Approach
Social Conversion Factor (SCF) or Proportions of Three Components, Tradable (T), labor (L)
and Residual (R)

Item SCF or Proportions

Land SCF=1/1.5
Building and construction Proportion: T=0.5, L=0.25, R=0.25
Indigenous equipment SCF=0.7
Transportation Proportion: T=0.65, L=0.25, R=0.1
Engineering and know-how fees SCF=1.5
Preoperative expenses SCF= 1
Labor SCF=1
Salaries SCF=0.5
 Repairs and maintenance SCF=1/1.5
Water, fuel etc Proportion: T=0.5, L=0.25, R=0.25
Electricity Proportion: T=0.71, L=0.13, R= 0.16
Domestic stores SCF=0.8
Other overheads SCF=1/1.5

Calculation of Social cost of initial outlay for 1 year.

Item Financial Basis of Tradeable T L R

cost conversion value ab
initio
Land 148.5 SCF=1/1.5 98.99 - - -
Building T=0.5 - 122.17 61.08 61.0
244.35 L= 0.25 5 8
R=0.25
Plant & 163.35 CIF Value 163.35 - - -
Machinery(imported)
Plant & 676.35 CIF value 676.35 - - -
Machinery(indigenous)
Transportation cost T=0.65 - 18.42 7.08 2.83
28.35 L=0.25 5
R=0.1
Technical know-how 55.35 SCF=1.5 83.02 - - -
Preoperative expenses 19.71 SCF=1 19.71 - - -
Working capital 95 CIF value 95.215 - - -
requirement .215

Total 1431.176 1136.63 140.59 68.16 63.9

1

Calculation of social value

Particulars Rs (crore)
Tradable value ab Initio 1136.63
Social cost of tradable component 93.72
Social cost of labor component 34.08
Social cost of residual component 31.95
1296.38
 Projected annual Profitability statement

Amount (Crs)
Income
Net sales 546.75

Expenditure
Item Financial Basis of Tradeable T L R
Raw material (indigenous)
cost conversion value ab initio 125.091
Raw material 125.091 SCF= 0.8 100.07 - - -
Labor 2.3625
(indigenous)
Labor
Salaries 2.3625 SCF=0.5 1.18 - - 5.0625-
Salaries
Repairs & maintenance5.0625 SCF= 0.8 4.05 - - 0.7425-
Repairs
Fuel & 0.7425 SCF=1/1.5 0.497 - - 0.3105-
maintenance
Depreciation
Fuel T=0.5 - 0.155 0.07 336.9870.07
Other overheads 0.3105 L=0.25 0.7425
R=0.25
Depreciation
Taxable Profit 336.987 - - - - -206.253-
Other 0.7425 SCF=1/1.5 0.497 - - -
overheads
Total 106.29 0.155 0.07 0.07

Calculation of Social value

Particulars Rs (crore)
Tradable value ab Initio 106.29
Social cost of tradable component 0.103
Social cost of labor component 0.035
Social cost of residual component 0.035
106.46

CIF value of output=1,56,21,40,000*3.5= Rs 546.75 crs

Social Net Benefit per annum= Rs (546.75-106.46) = Rs 440.29

 STRUCTURING OF THE PROJECT
Project Structuring
Today projects need to be better planned, more transparently presented, and then to be monitored
and reported on according to key performance indicators. Likewise, the demands for speed and
higher returns from a project are constantly growing, and so only the best-integrated, business
driven structures are able to achieve the desired project outcomes.

So the project structuring can be define as a multifunctional exercise that selects the best
implementation strategy, sets the scope according to a defined basis, selects the best contracting
strategy, and then plans and schedules all business and project aspects from mobilization through
to ramp-up.

Project Structuring also includes:

➢ organizational Structure
➢ Capital Structure
➢ Ownership
➢ Board
➢ Contractual
➢ Corporate Participants
➢ Common Facility
➢ Customize Facility

And besides this hierarchical structure of the organization, there are different works allotted to
specialized officers. These works include

➢ Business strategy
➢ Business development
➢ Technology
➢ Research
➢ Finance
➢ Operations
➢ Compliance
➢ Human resources
 Each of the above department is headed by a chief officer and has various managers to
perform specialized functions.

Capital structure
It is the way of financing of organization through the different means of debt, equity or the
combination of both.

This project of shopping mall comprises of 50% debt and 50% equity and hence D/E ratio is 1 in
this case.

Now let us see what is the cost of financing debt and equity and this also called as cost of capital.

Cost of capital is the opportunity cost for a particular investment. It is the rate of return that an
individual or organization would otherwise expect to receive, given the same level of risk as the
investment that is chosen. Two terms used in cost of capital are cost of debt and cost of equity. In
basic terms, cost of debt is calculated as the rate of a "risk free" bond with the same term
structure as the investment, added with a default premium. Cost of equity, likewise, can be
counted as a similar rate of return on a risk free investment, with an added premium for the
expected risk.

Cost of debt

The cost of debt is computed by taking the rate on a risk free bond whose duration matches the
term structure of the corporate debt, then adding a default premium. This default premium will
rise as the amount of debt increases (since the risk rises as the amount of debt rises). Since in
most cases debt expense is a deductible expense, the cost of debt is computed as an after tax cost
to make it comparable with the cost of equity (earnings are after-tax as well).

Cost of equity

Cost of equity = Risk free rate of return + Premium expected for risk

Capital asset pricing model (CAPM)

The capital asset pricing model (CAPM) is used in finance to determine a theoretically
appropriate price of an asset such as a security. The expected return on equity according to the
capital asset pricing model where the market risk is normally characterized by the β parameter is
given by:
Where:

Es: The expected return for a security

Rf: The expected risk-free return in that market (government bond yield)

βs: The sensitivity to market risk for the security

RM: The historical return of the stock market/ equity market

(RM-Rf): The risk premium of market assets over risk free assets.

The model states that investors will expect a return that is the risk-free return plus the security's
sensitivity to market risk times the market risk premium. The risk free rate is taken from the
lowest yielding bonds in the particular market, such as government bonds. The sensitivity to
market risk (β) is unique for each firm and depends on everything from management to its
business and capital structure. This value cannot be known "ex ante" (beforehand), but can be
estimated from ex post (past) returns and past experience with similar firms.

Weighted average cost of capital

The Weighted Average Cost of Capital (WACC) is used in finance to measure a firm's cost of
capital. The total capital for a firm is the value of its equity (for a firm without outstanding
warrants and options, this is the same as the company's market capitalization) plus the cost of its
debt (the cost of debt should be continually updated as the cost of debt changes as a result of
interest rate changes). Notice that the "equity" in the debt to equity ratio is the market value of all
equity, not the shareholders' equity on the balance sheet. To calculate the firm’s weighted cost of
capital, we must first calculate the costs of the individual financing sources: Cost of Debt Cost of
Preference Capital Cost of Equity Capital. Calculation of WACC is an iterative procedure which
requires estimation of the fair market value of equity capital.
Calculations
Means of Finance

Particulars Rs.(In Cr) Rs.(In Cr)

Means Of Finance
Equity
Promoters 303.75
Public 222.75
Total 526.5
Debt
Term Loan From Financial Institutions
IDBI 513
IFCI 371.25
ICICI 303.75
Total 1188
Term Loan From Bank
SBI 195.75
Canara Bank 60.75
Total 256.5

Total Amount 1971

 Given Pre-tax cost of debt
Public Information Derive =15%
Ba using
Be D:E T equation 17 Tax bracket 30%
1:1 debt equity to fund the
Reliance power 1.23 1.8 40% 0.59 project
Tata power 0.93 2.2 35% 0.38 Rf=10%
Ksg power 1.1 1.4 40% 0.60 Rm=18%
Find average 0.52

Now use equation 16, page 238: Be=Ba*((1+

(d/e)*(1-T))

For new project

Be 1.26 1.4 2.2 1.152718

The Value of equity beta thus obtained is put

in CAPM

Ke = Rf+β(Rm-Rf)
= 0.200601

Derive WACC = 0.0525

Ownership Structuring
To own and operate property, structures (often known today as legal entities) have been created
in many societies throughout history. The concept of ownership has existed for thousands of
years and in all cultures. Over the millennia, however, and across cultures what is considered
eligible to be property and how that property is regarded culturally is very different. Ownership
is the basis for many other concepts that form the foundations of ancient and modern societies
such as money, trade, debt, bankruptcy, the criminality of theft and private vs. public property.
Ownership is the key building block in the development of the capitalist socio-economic system.

Legal advantages or restrictions on various types of structured ownership have existed in many
societies past and present. Cooperatives, corporations, trusts, partnerships, condominium
associations are only some of the many varied types of structured ownership; each type has many
subtypes. To govern how assets are to be used, shared or treated, rules and regulations may be
legally imposed or internally adopted or decreed.
This Thermal power company is a limited company which has its own identity. The company has
its own legal status (like a person). It is separate from its shareholders (its owners). It is legally
formed company, which includes registering the company name, creating a constitution (rules)
for the company and issuing shares. Company also has a separate Inland Revenue number.

The company is administered by Directors, who are not shareholders in the company. All
Directors are legally bound to act in keeping with the relevant legislation and the Company’s
own constitution.

The company profits are taxed at the flat company tax rate of 30%. The advantage of setting up
a limited company to own my investment property is that it’s a separate legal entity, so I can
separate business and my personal assets. This helps protect my personal assets if anything goes
wrong.

In our company depending on internal rules and regulations, certain classes of shares have the
right to receive increases in financial "dividends" while other classes do not. After many years
the increase over time is substantial if the business is profitable. Examples of this are common
shares and preferred shares in private or publicly listed share capital corporations.

Board Structuring
In this project board of directors consists of 10 persons i.e. 1 CEO and 9 Senior Managers and
they will be responsible of every decision regarding the organization. The role of the Board of
Directors is to manage the corporation. This will likely include establishing policies which the
organization will follow, and making major business decisions such as:

Establishing and amending bylaws;

Issuing dividends;
Approving major contracts or mergers;
Making key decisions regarding real estate owned or managed by the corporation;
Electing or appointing officers.

Contractual Structuring
This portion will include all the business proposals or parts of the business which I am going to
give on contracts or to which I am going to outsource.

It will include housekeeping, Maintenance, Security and logistics responsibilities.

Corporate participants: - I have taken different place for professional corporate offices like
NTPC, Reliance Power, JSW Power and more like this.
Common Facility

There are so many common facilities for the workers and officers are there. These are

• Eco-friendly working environment.

• 24*7 transportation facility.
• Cafeteria
• CCTV (For security)
• Centralized A/c in the Administrative offices.
 Financial Projection
Cost of the Project

Particulars Rs (In lakh)

Land & site development 15099.75

Building & Civil work 24502.5

Plant & Machinery 83868.75

Know How & Engg. Fees 5535

Miscellaneous Assets 9787.5

Preliminary & Preoperative expenses 1971

Working Capital Margin 4779

Total Project Cost 145543.5

Calculation of Land & Site development

 Particulars Rs (In lakh)
Land 14850
Site Development

Leveling the Plot 74.25

Laying of Factory Road 60.75

Construction Of Boundary wall 87.75

Construction of main gate
20.25
Tube well digging
6.75

15099.75

Construction of Building & Civil Works

Particulars Rs (In lakh)

Construction of main factory 26426.2
5
Building administrative office
3645
Construction of Godown
2733.75
Civil works for utilities

273.375
 33078.38

Calculation of plant & machinery

Sl. No Particulars Rs (In lakh)

A. Boiler furnace and steam drum 11475
B Super heater 12825
C Reheater
10192.5
D Fuel preparation system
E 11407.5
Air path
F. 10057.5
Miscellaneous
13432.5
Total ( A+B+C+D+E+F)
69390
Tax & Duties@ 16%
11102.4
80492.4
Sales Tax @ 4%
3219.75
Freight, Octroi, Loading & Unloading
83712.75
Erection & Commissioning 68.85
87.75

Total Cost 83868.75

Calculation of Technical Know how Fees

Particulars Rs (In lakh)

 1620
Expenses On Foreign Technicians
1822.5
Know how & Engg. Fees
2092.5
Royalty & compensation payable

5535

Miscellaneous Fixed Assets

Particulars Rs (In lakh)

Boiler 67.5
Piping 33.75
3422.2
Laboratory Equipment
5
Testing Equipment
2085.7
Furniture & office equipment 5
Payment for Licenses 2058.7
Water Treatment Equipment 5

20.25

2099.2
5

Total Cost 9787.5

Calculation of Preliminary & Preoperative expenses

Particulars Rs (In lakh)

 Consultancy charges 67.5

Rent, Rates ,Taxes 168.75

Promotional Expenses 742.5

Organizational training Cost 202.5

Interest during construction 607.5

Postage, telephone, telegram 20.25

Printing & Stationary 33.75

Guarantee Commission 128.25

1971

Means of finance

Particulars Rs.(In Cr) Rs.(In Cr)

Means Of Finance
Equity
Promoters 303.75
Public 222.75
Total 526.5
Debt
Term Loan From Financial Institutions
IDBI 513
IFCI 371.25
ICICI 303.75
Total 1188
Term Loan From Bank
SBI 195.75
Canara Bank 60.75
Total 256.5

Total Amount 1971

Monthly Salary Estimation

SL.NO Position NO. Salary

1 Chairman 1 33.75 lakh

2 Vice Chairman 1 20.25 lakh

3 Company secretary 1 10.8 lakh

4 Quality manager 2 9.45 lakh

5 Human Resource Manager 2 8.775 lakh

6 Legal Affairs (Officer) 4 8.1 lakh

7 CFO 1 20.25 lakh

8 Finance Manager 3 9.45 lakh

9 Auditor 2 6.75 lakh

10 System manager 4 10.8 lakh

11 Operation manager 4 10.8 lakh

12 Marketing Manager 4 10.125 lakh

13 Supervisor 2 33.75 thousand

14 Ground Staff 225 24.3 thousand

15 Labor 1525 16.2 thousand
16 Security 16 20.25 thousand
17 Sweepers 5 13.5 thousand

Technical Man Force

1 Production Manager 2 8.775 lakh

2 Civil Engineer 2 7.425 lakh

3 Computer Engineer 4 8.775 lakh

 4 Metal Engineer 2 7.425 lakh
5 Electrical Engineer 2 7.425 lakh

6 Mechanical Engineer 2 7.425 lakh

Total salary=741.15 lakh

Salary are expected to increase by 5% every year.

First year salary=741.15 lakh

Second year salary=778.5

Third year salary=817.3

Fourth year salary=857.6

Fifth year salary=900.4

Sixth year salary=945.8

Seventh year salary=1042.8

Eighth year salary=1094.6

Ninth year salary=1149.2

Tenth year salary=1206.8

Eleventh year salary=1267.4

Twelfth year salary=1330.1

Thirteenth year salary=1396.1

Fourteenth year salary=1465.4

Fifteenth year salary=1539.2