SINHGAD INSTITUTE OF HOTEL MANAGEMENT AND CATERING TECHNOLOGY

KUSGAON BK, LONAVALA

PROJECT REPORT ON
DEVELPOMENT OF PROJECTS ON BUILD OPERATE TRANSFER BASIS

SUBMITTED BY
MR. SAURABH TIWARI
FINAL YEAR BHMCT
2017-2018

UNDER THE GUIDANCE OF

DR. SAMEER KORANNE
PROF. NAVNEET DESHPANDE

SUBMITTED TO THE UNIVERSITY OF PUNE IN THE FULFILMENT OF SUBJECT PROJECT

REPORT 802 IN 2017-2018
 CERTIFICATE

SINHGAD INSTITUTE OF HOTEL MANAGEMENT AND CATERING TECHNOLOGY

KUSGAON BK, LONAVALA

This is to certify MR. SAURABH TIWARI student of final year BHMCT

has made a project report on
DEVELOPMENT OF PROJECTS ON BUILD OPERATE TRANSFER BASIS
submitted to UNIVERSITY OF PUNE submitted in fulfillment of the subject PROJECT
REPORT 802 in the year 2017-2018

DR. AYESHA SIDDIQUI DR. SAMEER KORANNE

Principal Vice Principal

PROF. NAVNEET DESHPANDE

Associate Professor

External Examiner
 ACKNOWLEDGEMENT

I take the immense pleasure in presenting my project report

I take this opportunity to sincerely thank our principal Dr. Ayesha Siddiqui and express my
gratitude to my guide Dr. Sameer Koranne for his co-operation and guidance throughout the
course. I thank him for giving direction and encouraging me to take this topic and providing
constructive input towards the completion of the project report

I also thank our mentor Prof. Navneet Deshpande for providing guidelines and kind
assistance that influenced me to learn and develop a better understanding. Lastly I thank
people who have contributed time, encouragement, information and assistance for giving me
information and help needed to complete this report

Mr. Saurabh Tiwari

 INDEX

SR.NO CONTENTS PAGE NO.

1. Introduction

2. Review of Literature

3. Research Methodology

4. Observation

5. Different BOT Projects

a) Water Park

b) Theatre

c) Amusement Park

d) Hotel

e) Restaurant

f) Food Court

6. Finance

7. Results and Discussion

8. Conclusion

9. Bibliography
 INTRODUCTION

Private Partnership Policy

A partnership between the public and private sectors with the clear agreement on shared
objectives for the delivery of public infrastructure and public services.

Public Private Partnership means an arrangement between a government between a

government/ statutory entity/ government owned entity on one side and private sector
entity on the other hand for the provision of public assets and public services through
investments being made and management being undertaken by the private sector entity,
for a specified period of time, where there is well defined allocation of risk between the
private sector and the public entity and the private entity receives performance linked
payments that conform or benchmarked to specified and pre-determined performance
standards, measurable by the public entity or its representative.

There is no single PPP engagement model that can satisfy all conditions a projects
location setting and its technical and financial features. The most suitable model should
be selected taking into account the country’s private partnership policy market and the
financial and technical features of the project and sectors concerned.

Prevalent PPP Engagement Models in India:

1. BOT-Toll (Build Operate Transfer-Toll)

2. BOOT (Build Operate Own Transfer)
3. JV (Joint Venture)
4. MC (Management Contract)
5. BOT (Build Operate Transfer)
6. BOO (Build Own Operate)
7. DBFOT (Design Build Finance Operate Transfer)
8. BOOST (Build Operate Own Share Transfer)
Build Operate Transfer

• New Scenarios Possible

• Reduce Management Overhead
BUILD • Increased Flexibity
• Control Costs

• Program Management
• Development And Maintenance
OPERATE • Fully Operating Subsidiary
• Increases Security

• Post Transfer Management Support

• Lowers Cost
TRANSFER • Start Small And Scale As Needed
• Reduces Attrition

The BOT scheme is essentially a form of leasing, where the government (project sponsor)
allows a private entrepreneur (project promoter) to design, finance and build an infrastructure
facility. In return the project is permitted to collect tolls (user fee) and operate the facility for
a specified period (called the concession period), during which he is expected to recover all
of his costs and earn a reasonable profit. At the end of the concession period, the ownership
of the facility is transferred to the government. This arrangement facilitates the
implementation of capital intensive infrastructure projects by the government with the funds
from outside the budget allocation, while transferring the risks involved to the private sector.

The concession period is determined primarily by the length of time needed for the facility
revenue stream to pay off the company’s debt and provide a reasonable rate of return for its
efforts and risk.
Types of BOT Project Procurement Structures:

Build Own Operate Transfer (BOOT)

The service provider is responsible for design and construction, finance, operations,
maintenance and commercial risks associated with the project. The service provider
owns the project throughout the concession period. The asset is transferred back to the
government at the end of the term, often at no cost.

Build Own Operate (BOO)

Similar to BOOT projects, but the service provider retains ownership of the asset in
perpetuity. The government only agrees to purchase the service produced for a fixed
length of time.

Design Build Operate (DBO)

A design and construction contract linked to an operation and maintenance contract.
The service provider is usually responsible for financing the project during
construction. The government purchases the asset from the developer for a pre-agreed
price prior to (or immediately after) commissioning and takes all ownership risks
from that time.

Lease Own Operate (LOO)

Similar to a BOO project but an existing asset is leased from the government for a
specified time. The asset may require refurbishment or expansion.
 BUILD

OPERATE

TRANSFER

Concept of BOT
Build Operate Transfer (BOT) is a form of project financing, where in a private entity
receives a concession from the private or public sector to finance, design, construct,
and operate a facility stated in the concession contract. This enables the project
proponent to recover its investment, operating and maintenance expenses in the
project. Due to the long-term nature of the arrangement, the fees are usually raised
during the concession period. The rate of increase is often tied to a combination of
internal and external variables, allowing the proponent to reach a satisfactory internal
rate of return for its investment. BOT finds extensive application in infrastructure
projects and in public–private partnership. In the BOT framework a third party, for
example the public administration, delegates to a private sector entity to design and
build infrastructure and to operate and maintain these facilities for a certain period.
During this period the private party has the responsibility to raise the finance for the
project and is entitled to retain all revenues generated by the project and is the owner
of the regarded facility. The facility will be then transferred to the public
administration at the end of the concession agreement without any remuneration of
the private entity involved.
 Some or even all of the following different parties could be involved in any Build
Operate Transfer Project:

1. The host government: Normally, the government is the initiator of the infrastructure
project and decides if the BOT model is appropriate to meet its needs. In addition, the
political and economic circumstances are main factors for this decision. The government
provides normally support for the project in some form. (provision of the land/
changed laws)
2. The concessionaire: The project sponsors who act as concessionaire create a special
purpose entity which is capitalized through their financial contributions.
3. Lending banks: Most BOT projects are funded to a big extent by commercial debt. The
bank will be expected to finance the project on "non-recourse" basis meaning that it has
recourse to the special purpose entity and all its assets for the repayment of the debt.
4. Other lenders: The special purpose entity might have other lenders such as national or
regional development banks.
5. Parties to the project contracts: Because the special purpose entity has only limited
workforce, it will subcontract a third party to perform its obligations under the concession
agreement. Additionally, it has to assure that it has adequate supply contracts in place for
the supply of raw materials and other resources necessary for the project.
 A BOT Project (Build Operate Transfer Project) is typically used to develop a discrete
asset rather than a whole network and is generally entirely new or greenfield in nature
(although refurbishment may be involved). In a BOT Project the project company or
operator generally obtains its revenues through a fee charged to the utility/ government
rather than tariffs charged to consumers. A number of projects are called concessions,
such as toll road projects, which are new build and have a number of similarities to
BOTs. In general, a project is financially viable for the private entity if the revenues
generated by the project cover its cost and provide sufficient return on investment. On
the other hand, the viability of the project for the host government depends on its
efficiency in comparison with the economics of financing the project with public funds.
Even if the host government could borrow money on better conditions than a private
company could, other factors could offset this particular advantage. For example, the
expertise and efficiency that the private entity is expected to bring as well as the risk
transfer. Therefore, the private entity bears a substantial part of the risk. These are some
types of the most common risks involved:

1. Political risk: Especially in the developing countries because of the possibility of

dramatic overnight political change.
2. Technical risk: Construction difficulties, for example unforeseen soil conditions,
breakdown of equipments.
3. Financing risk: Foreign exchange rate risk and interest rate fluctuation, market
risk (change in the price of raw materials), income risk (over-optimistic cash-flow
forecasts), cost overrun risk.
 BOT Contractual Structure
A BOT mechanism is a complex structure comprising multiple, inter-dependent
agreements among various participants. Major participants in BOT projects include
government, private company called concessionaire, lenders (banks), equity investors,
contractors, suppliers, operators and financial advisers. Typically the government grants
concession to the private sector (concessionaire). The concession is awarded through
concession agreement. The concessionaire is responsible for design, finance, construction
and operation of the facility. The concessionaire retains the title of ownership during the
concessionary period, which is normally 10-50 years, after which the title of the
ownership is transferred back to the government.

A BOT project has the following agreements:

1. Concession agreement
2. Loan agreement
3. Shareholders agreement
4. Construction contract
5. Supply contract (Equipment Material/ Fuel supply contract)
6. Off-take agreement
7. O & M agreement

Concession Agreement
The concession agreement is between the government and the concessionaire. The
concession agreement is regarded as the heart of the BOT project as it determines the
commercial viability and profitability.

The concession agreement includes the following:

1. The concession period.
2. The construction duration.
3. Toll/tariff structure with toll/tariff revision provisions.
4. Rights and obligations of both parties.
5. Government guarantee: The host government offers guarantees to the project
promoters (concessionaire) like supporting loans, guarantees of minimum operating
income etc.
Loan Agreement
The loan agreement is between the lenders (i.e. banks) and the concessionaire. The banks
provide the much necessary debt to the concessionaire. Bank debt is the primary source
of financing for a BOT infrastructure project.

Shareholder Agreement
The shareholder agreement is between the equity investors and the concessionaire.

Construction Contract
The construction contract is between the contractor and the concessionaire. The contract
is usually let under fixed price turnkey contract.

Supply Contract
An agreement between the supplier and the concessionaire. The supplier in a supply
contract is often government agency that supplies raw material such as coal to power
plant and oil.

Off-take Agreement
An agreement between the government and the concessionaire to purchase minimum
quantity of services such as electricity, water at a fixed price for fixed term.

Operations and Maintenance Contract

An agreement between the concession company and the operator. The operation phase
plays a very vital role in the success of BOT project as its success is tied to its revenue
generating ability. The operation phase of build-operate-transfer projects presents the
great management challenge and demands the highest level of attention.
Competitive Tendering Process or Bid Evaluation
Procedures
The typical evaluation and selection process in a competitive tender is shown below. Pre
qualification: The main aim of the request for qualification (RFQ) is to shortlist of
competitive proposals by consortia that consists of reputable and experienced operators
and bankers. Nonetheless pre-qualification would eliminate and discourage the non-
serious promoters.

Govt issues
RFQ

Govt selects Pre-

winner qualification

Get pre-
Detailed
qualified and
Negotiation
issues RPF

Govt
evaluates and Tendering
shorlists

Selection Process in a Competitive Tender of BOT Project

Critical Success Factor (CSF)

BOT projects are characterized by high risk and cost overruns. There are six Critical
Success Factors that are vital for project promoters in winning a BOT contract. These
factors are:

1. Entrepreneurship and leadership.

2. Right project identification.
3. Strength of consortium
4. Technical solution advantage.
5. Financial package differentiation.
6. Differentiation in guarantees.
 Reasons why government adopt BOT project
procurement strategy

1. The involvement of private sector and experienced commercial lenders ensures an in-
depth review as an additional sign of project feasibility.
2. Project risk and burden that would otherwise have to be borne by the public sector is
allocated to the private sector.
3. The use of private sector capital, initiative and know-how reduces project construction
costs, shortens schedules and improves operating efficiency.
4. The development of projects that would otherwise have to wait, and compete for,
scarce sovereign resources is accelerated.
 Characteristics of BOT Project
BOT projects have unique characteristics that distinguish them from other project
delivery methods. The following are some of their unique characteristics:

1. BOT projects are financed on a project finance basis with limited resource, typically
in limited recourse financing, the lenders provide debt to the concession company
solely based upon expected cash flow/ revenue generating capacity of the project
rather than the assets of the concessionaire company.
2. A key characteristic of BOT projects is raising of finance entirely by the private sector
without the involvement of government. The private sector is fully responsible for a
design, construction, finance and operation and maintenance.
3. BOT projects are complex structures multiple interdependent agreements among the
various participants.
4. BOT projects are typically large-scale infrastructure projects. Transaction costs
amount on average 5 to 10% of total project cost.
5. BOT projects are associated with uncertainties and high risk.
6. BOT projects transfer the risk to the private sector.
7. BOT formula can be applied to any sector of the economy. But it has been used
widely in power plant sector, transportation and telecommunications.

Acceptance Criteria for BOT Projects

A BOT transport infrastructure project may be considered as financially viable, when

the following conditions are simultaneously satisfied:
1. The net present value for the project should be positive. The discount rate for
financial analysis may include a risk premium over the current commercial lending
rate.
2. The financial internal return of return should have a value greater than the discount
rate.
3. The cash flow (liquidity) situation in each year of the concession period should be
satisfactory. In other words, the cash balance at the end of every year should be
positive.

For conditions prevailing in India, the discount rate for financial analysis may be
assumed at 20% corresponding to an interest of 18% for long term debt.
 Advantages of BOT project

1. Use of private sector financing to provide new sources of capital which reduces public
borrowing and direct spending and which may improve the host government’s credit
rating.
2. Ability to accelerate the development of projects that would otherwise have to wait
for and compete, for sovereign resources.
3. Use of private sector capital, initiative and know-how to reduce project construction
costs, shorten schedules and improve operating efficiency.
4. Allocation to the private sector of project risk and burden that would otherwise have
to be borne by the public sector.
5. The involvement of private sponsors and experienced commercial lenders which
ensures an in depth review and is an additional sign of project feasibility.
6. Technology transfer, the training of local personnel and the development of national
capital markets.
7. In contrast of privatization, government retention of strategic control over the project
which is transferred to the public at the end of the contract period.
8. The opportunity to establish a private benchmark against which the efficiency of
similar public sector projects can be measured and the associated opportunity to
enhance public management of infrastructure facilities.

Disadvantages of BOT project

1. Transaction costs are high they amount 5-10% of the total project cost.
2. Not suitable for smaller projects. Victorian Government of Australia has suggested
that projects with a value of less than Australian Dollar $15m are unlikely to gain
benefits from BOT delivery method.
3. The success of BOT project depends upon the successful raising of the necessary
finance. Various costs such as cost of construction, equipment, maintenance should be
committed during the life of the project.
4. BOT projects are successful only when substantial revenues are generated during the
operation phase.
Aims & Objectives
1. To study the actual cost required for the projects.
2. To find out how much profit can be earned through these projects.
3. To know the actual process of starting a project.
4. To create opportunities through these projects.

Limitations
1. The project is only start on large scale basis there is no chances for small scale
projects.
2. The project is required large amount of capital investment so fund required is in
large amount.
3. The project is needed various permission from the government.
4. The project is required too much time to starting as it has take time for
construction.
5. Break even time is not fix it depends on response of people.
6. The project is depending upon government policies.
7. The unstable situation in politics is also gets affected to this project.
 REVIEW OF LITERATURE
Guidelines for BOT Project Development under Public Private Partnership

 Background and Purpose

The types of road or land development projects that can be feasibly implemented
using the BOT method are limited in number. Transportation infrastructure is
characterized by relatively high market risk. Demand for transportation fluctuates
widely with socioeconomic changes in the country and the level of services provided
by the transportation facility. This makes private companies extremely cautious
toward participation in a BOT project. Several projects have failed right after they
were started, partly because real demand fell short of initial projections. The goal of
this guideline is to help ensure the success of future BOT projects.

 The Need for Private Sector Vitality

Infrastructure improvement under Private Public Partnership. A BOT project is not an

independent commercial project, even though its developer is a public enterprise. A
BOT project is jointly carried out by the public and private sectors. “Jointly carry out”
means that the two sectors closely cooperate in the planning and implementation of a
project, instead of performing predetermined jobs independently of each other.
Conventional BOT projects: “Consigned to private businesses by the government”
BOT projects under the PPP system: “Carried out through public cooperation with
private companies.”

 BOT projects based on Public Private Entrepreneurship

In the following discussion, BOT projects are evaluated in terms of their ability to
function as BOT projects based on PPP (Public-Private-Partnership). The discussion
also covers the optimal form of a PPP-based BOT project. Several risk hedges are
examined. Risk hedges can help get a project started, as well as help formulate a
business plan that appeals to both the public and private sectors.
Selection of a project:

1. To qualify as a Public Private Partnership based BOT project, a project must

have socioeconomic value.
2. The BOT must be self-sufficient in the absence of public assistance. If the
project does not need public support, it will be put into operation by the
private sector.
3. If the project cannot function as a private project, it is reexamined to see if
help from the public sector, in the form of land or other privileges associated
with the project, will enable the project to succeed. If public support makes the
project feasible, it will be put into operation.
4. A project that does not qualify as a conventional BOT project may qualify as a
PPP-based BOT project if the public sector accepts a greater role to make it
feasible.
5. If a project is expected to be unprofitable under the BOT method even with
substantial public support, the project may be cancelled. Or, if the project is
considered indispensable, it will be implemented as a purely public project
with special public financing.

Starting a BOT project:

For starting a BOT project the following steps are needed:

1. Capital Project
2. Funding
3. Project Management
4. Project Finance
5. Initial Cash Flow
6. Capital Investment
7. Profitability Index
8. Project Notes
9. Capital Budgeting
10. Corporate Finance
 RESEARCH METHODOLOGY
In research methodology there are two types of data, Primary and Secondary data

Primary Data

There are two types of methods for project. One is survey method and one is observation
method. So for this project observation method is used. The concept is taken from road
projects in India. The key individuals involved in this project are regulatory agencies,
construction contractors, operating firms, financial institute.

Secondary Data

The information of the project is taken from internet, financial institutes and various
books.
 OBSERVATION
WATER PARK
Permissions required for opening a Water Park are as follows:

License and Permission Cost

Premises License Rs. 500 + Rs. 5 per sq. ft development charges

Ticket Selling License Rs. 2,000
NOC from Collector Rs. 5,000
NOC from PWD Rs. 5,000
Fire Department Permission Rs. 1,000 + Inspection charges
Health Department Permission Rs. 25,000
Pollution Control Board Fee Rs. 10,000 Online form submission
Non Agricultural Fee Rs. 50,000
Town Planning Rs. 5,000

Rides in Water Park:

Swimming Pool Roller Slide

Mushroom Umbrella

Pendulum Water Slide

Wave Pool

Water Slides
Water Park Division

Speed Slide
Water Tube Slides

High Water Slide

 Upright Slide

Multi Lane Water Slide

Water Resource Slide

Aqua Multiplay Station

Sr.
Name of the slide Size
No.
1. Swimming Pool Roller Slide 10,000 sq ft
2. Mushroom Umbrella 2,500 sq ft
3. Pendulum Water Slide 10,000 sq ft
4. Wave Pool 22,500 sq ft
5. Water Slides 18,000 sq ft
6. Water Park Divison 25,000 sq ft
7. Speed Slide 15,000 sq ft
8. Water Tube Slide 40,000 sq ft
9. High Water Slide 3,600 sq ft
10. Upright Slide 7,500 sq ft
11. Multi Lane Water Slide 9,000 sq ft
12. Water Resource Slide 2,500 sq ft
13. Aqua Multiplay Station 40,000 sq ft
Total Area 2,05,600 sq ft

Sr.
Name of the equipment and supplier Cost
No.
1. Swimming Pool Roller Slide
Manufactured by-
Modcon Industries Rs. 14,00,000
Sector-3, New Delhi
Contact: +91 8079450217
2. Mushroom Umbrella
Manufactured by-
Potent Water Care Pvt. Ltd. Rs. 1,00,000
Rohini , New Delhi
Contact: +91 8071675581
3. Pendulum Water Slide
Made by-
Krishna Amusement Park and Nursery Pvt. Ltd. Rs. 20,00,000
Gondal Road , Rajkot
Contact: +91 8071804812
4. Wave Pool
Made by-
Star Delta Construction
Rs. 15,00,000
Borivali East, Mumbai
Contact: +91 8048609127

5. Splash Slide
Made by-
Raj Water Rides
RC Technical Road, Rs. 8,50,000
Ghatlodiya, Ahmedabad
Contact: +91 8048605766
6. Water Park Divison
Made by-
Sapphire Recreation
Prahlad Nagar, Ahmedabad Rs. 25,00,000
Contact: +91 8048408243
7. Speed Slide
Made by-
Blue Water Park Enterprises Rs. 3,75,000
Sector 26, Gandhinagar
Contact: +91 8048023671
Water Tube Slide
8. Manufactured by-
Raj Water Rides
Rs. 3,00,000
Ghatlodiya , Ahmedabad
Contact: +91 8048605766

9. High Water Slide

Made by-
Raj Water Rides Rs. 7,00,000
Ghatlodiya , Ahmedabad
Contact: +91 8048605766
10. Upright Slide
Manufactured by-
Raj Water Rides Rs. 11,00,000
Ghatlodiya , Ahmedabad
Contact: +91 8048605766
11. Multilane Water Slide
Manufactured by-
Raj Water Rides Rs. 12,00,000
Ghatlodiya , Ahmedabad
Contact: +91 8048605766
 12. Multi Resource Slide
Manufactured by
Word V Foundation Rs. 1,00,000
Satellite Road , Ahemedabad
Contact: +91 8041947669
13. Aqua Multiplay Station
Manufactured by-
Decent Lighting Rs. 14,00,000
Rohini, Sector-8, New Delhi
Contact: +91 8071802710

Total Rs. 1,35,25,000

Capital Cost

Particular Name Cost

Construction cost Rs. 25,00,000

Equipment cost Rs. 1,35,25,000
License cost Rs. 5,53,500
Total Rs. 1,65,78,500

Operating Cost

Particular Name Monthly Annual

Maintenance cost Rs. 1,00,000 Rs. 12,00,000
Staffing Rs. 2,60,000 Rs. 31,20,000
Electricity Rs. 50,000 Rs. 6,00,000
General expenses Rs. 30,000 Rs. 3,60,000
Total Rs. 4,40,000 Rs. 52,80,000

Income Profit

For Water Park per person entry is Rs. 550 and have frequent visiting capacity of 200 pax

Particular Name Daily Income Monthly Income Annual Income

Ticket Selling Rs. 1,10,000 Rs. 33,00,000 Rs. 3,96,00,000
 THEATRE

On a basic estimate (approximate). All values are for the setup and do not include the running
costs. Final cost may largely vary upon the locality and land value. The total area required to
construct the theatre is 25,000 sq ft.

Market Research & Budgeting

Understanding your planned location, locality, demands, expectations, current
market scenario, young generation life style, society and overall factors helps in
estimating your planned theatre. We do intensive local level researches to arrive at
budgetary aspects for such proposals so as our prospective clients get best Return on
Investment.

Business Model
There is a myth in entertainment industry with reference to earning estimation for
running a theatre that cinema theatre or movie hall runs and avails good profits only
in big cities where population is above 5 lakhs.

Returns
Theatre or movie hall can give good return on investment even in taluka places
with population in range of 60,000 to 100,000. A single screen theatre runs well on
average with 2,500 viewers a week taking per day count to 350+ visitors a day in
four shows.

License and various Legal perspectives

Being large public area and entertainment resource, cinema theatre attracts
mandatory need of various licenses and permissions from:
 License and Permission Cost

Local Government Rs. 500

( Municipal Council or Municipal Corporation)
Public Works Department (for Plan Approval) Rs. 5,000
District Authorities (Health and Fire departments) Rs. 1,000
State Electricity Company Rs. 3,00,000
District Collectorate Entertainment Departnment Rs. 5,000
NOC from Collector Rs. 5,000

Apart from these licenses, many States have their own policies and legalities involved.

Design and Construction

Building architecture is the most important and vital element of this entire setup.
Modernized Building Architecture, plush interior look, glamorous eye-catching
colour schemes, kids friendly areas, waiting lounge with cheerful ambience, ample
secured in-house parking space are amongst various key elements that we look
forward with utmost excitement as a viewer to avail the best of your feel.

Seating and Air-conditioning

A visitor spares three hours in a cinema theatre and hence it is really important that
the seating arrangements and air-conditioning of the entire cinema hall keeps clear
focus on availing the best comfort and pleasant joy.

Seats
These are broadly categorized in fixed seats, push back seats, motorized recliner
chairs/ sofa and we look forward to avail multiplex level comfort by offering best
cushioned PU foam chairs on lowest levels and have recliner sofa setup for
royal treats.

Air conditioning
It is yet another enhancement aspect wherein you could offer split, ceiling or
centralized air conditioning systems in your planned theatre based on your budget.

Screen
Technology has made a revolutionary change in screen viewing. You can choose
from silver screen, white screen, three dimensional screens to project movies in
theatre. Screen size can be best decided based on your hall size, project room,
distance and various other aspects.
Projection
Showing cinema in theatre demands dynamic understanding of changing life style
and use of technology in showing the latest released movies at earliest span of time
for getting best revenues. The super hit mantra of First Day First Show (FDFS) is
practically possible now with use of satellite project techniques. These project
systems equally offers crystal clear picture viewing, excellent digital sound quality
and light effects for uninterrupted joy of viewing cinema in theatres.

Sound
Use of Dolby processors, amplifiers and best sound speakers for utter joy of best
hearing quality is amongst most significant perspective to get your visitor enjoy
the best of movie.

Booking Window
Complete reference, support and services for staff feeding, office setup,
work planning, resources training and computerized ticket/ online
ticketing requirements of theatres.

Distributor Linkup
Linking up with best distributors to get continued films with FDFS priority is most
attentive perspective.

Cafeteria
Theatres major second revenue comes from cafeteria wherein most of visitors enjoy
dedicated seating with their families and loved ones while watching movies. Hence
having clear display of cafeteria services, uniformed staffing, popcorns,
cold drinks, pizza, burger, sandwich and machinery setup are keenly reviewed
and availed.
 Capital Cost

Particular Name Cost

Construction cost Rs. 60,00,000
License cost Rs. 3,16,500
Total Rs. 63,16,500

Operating Cost

Particular Name Monthly Annual

Maintenance cost Rs. 50,000 Rs. 6,00,000
Staffing Rs. 70,000 Rs. 8,40,000
Electricity Rs. 2,50,000 Rs. 30,00,000
General expenses Rs. 35,000 Rs. 4,20,000
Total Rs. 4,05,000 Rs. 48,60,000

Income Profit

For movie theatre having the seating capacity of 100 pax runs having average daily ticket sell
of 180 tickets. The rate of ticket for person is Rs. 100

Particular Name Daily Income Monthly Income Annual Income

Ticket Selling Rs. 18,000 Rs. 5,40,000 Rs. 64,80,000
 AMUSEMENT PARK

Pick the type of amusement park you will open. We have to do market survey to open the
amusement park. We have to check the spending power of people.

 Adventure: Thrill rides, mystery, action.

 Futurism: Discovery, exploration, science, robotics, science fiction.
 International: Flavors of the world, areas with national themes.
 Nature: Animals, gardens, natural wonders.
 Fantasy: Cartoon characters, magic, myths and legends.
 History and Culture: Historical ambiance, areas with period themes.
 Movies: Rides based on films, stunt shows, behind the scenes.

On a basic estimate (approximate). All values are for the setup and do not include the running
costs. Final cost may largely vary upon the locality and land value.

Competent Entity: Ministry Of Culture and Tourism

Involved Entities:
1. Ministry of Culture and Tourism.
2. Chief of Fire Brigade Ministry of Public Order.
3. Fire Brigade.
4. Town Planning.
5. Zoning and Environment Department.
6. Health and Care Administrations
 Permissions required for opening an Amusement Park are as follows:

License and Permission Cost

Premises License Rs. 500 + Rs. 5 per sq ft development charges
Ticket Selling License Rs. 2,000
NOC from Collector Rs. 5,000
NOC from PWD Rs. 5,000
Fire Department Permission Rs. 1,000 + Inspection charges
Health Department Permission Rs. 25,000
Pollution Control Board Fee Rs. 10,000 Online form submission
Non Agriculture Fee Rs. 50,000
Town Planning Rs. 5,000
Health and Care Administration Rs. 50,000

General Documents:

1. Application filled by entrepreneur containing all his personal data and

requesting of permission of granting of operating license.
2. For legal person also submit corporate changes certificate issued for limited
liability companies, general partnership and limited partnership.
3. For legal person also submit : document stating that person is not bankrupt
4. Lease agreement
5. Building permit for the premises and certificate copies of architectural plans
6. Fire safety certificate
7. Documents certifying the proper operation of the premises sewage system
8. Documents certifying that all mechanical and electrical installation and
equipment operate properly signed by civil engineer.
9. Solemn declaration of the application stating the appointment of a person in
charge of premises.
10. Copy of the criminal record of the natural person or the company’s legal
representative, provided that competent licensing authority.
Slides in Amusement Park:

Double See Saw

Wave Slide
Woody Swing Amusement Ride

Family Ride
Giant Wheel

Wild Swing
 Carousel

High Speed Amusement Ride

Sr.
Name of the slide Size
No.
1. Double See Saw 800 sq ft
2. Wave Slide 500 sq ft
3. Woody Swing Amusement Ride 2,000 sq ft
4. Family Ride 10,000 sq ft
5. Giant Wheel 10,000 sq ft
6. Merry Go Round 2,500 sq ft
7. Wild Swing 10,000 sq ft
8. Carousel 10,000 sq ft
9. Swinging Animal 3,600 sq ft
10. High Speed Amusement Ride 10,000 sq ft
Total 59,400 sq ft

Sr.
Name of the equipment and supplier Cost
No.
1. Double See Saw
Manufactured by-
Parth Fibro Tech Rs. 35,400
Akash Nagar, Nagpur
Contact: +91 8079449618

2. Wave Slide
Manufactured by-
Uma Decent Lighting Rs. 70,000
Rohini, Sector-8, New Delhi
Contact: +91 8071802710
3. Woody Swing Amusement Ride
Manufactured by-
A K Enterprise
Rs. 6,00,000
Kota, Ahemedabad
Contact: +91 8048600445

4. Family Ride
Manufactured by-
Krishna Amusement Park and Nursery Pvt. Ltd.
Rs. 10,50,000
Gondal Road, Rajkot
Contact: +91 8071804812
5. Giant Wheel
Made by-
ATZ Pools, Dadar, Mumbai Rs. 15,00,000
Contact: +91 8071804006

6. Merry Go Round
Manufactured by-
ATZ Pools, Dadar, Mumbai Rs. 5,00,000
Contact: +91 8071804006
7. Wild Swing
Manufactured by-
ATZ Pools, Dadar, Mumbai Rs. 12,00,000
Contact: +91 8071804006
8. Carousel
Manufactured by-
ATZ Pools, Dadar, Mumbai Rs. 8,00,000
Contact: +91 8071804006

9. Swinging Animal
Manufactured by-
ATZ Pools, Dadar, Mumbai Rs. 3,00,000
Contact: +91 8071804006
10. High Speed Amusement Slide
Manufactured by-
Raj Water Rides Rs. 30,00,000
Ghatlodiya, Ahmedabad
Contact: +91 8048605766

Total Rs. 90,55,400

 Capital Cost

Particular Name Cost

Construction cost Rs. 30,00,000

Equipment cost Rs. 90,55,400
License cost Rs. 6,03,500
Total Rs. 1,26,58,900

Operating Cost

Particular Name Monthly Annual

Maintenance cost Rs. 90,000 Rs. 10,80,000
Staffing Rs. 2,60,000 Rs. 31,20,000
Electricity Rs. 50,000 Rs. 6,00,000
General expenses Rs. 40,000 Rs. 4,80,000
Total Rs. 4,40,000 Rs. 52,80,000

Income Profit

For Amusement Park per person entry is Rs. 700 and frequent visiting capacity of 200 pax

Particular Name Daily Income Monthly Income Annual Income

Ticket Selling Rs. 1,40,000 Rs. 42,00,000 Rs. 5,04,00,000
 HOTEL

On a basic estimate (approximate). All values are for the setup and do not include the running
costs. Final cost may largely vary upon the locality and land value for opening a three star
hotel with 100 rooms the hotel will required 30,000 sq ft area.

Permissions required for opening a Hotel are as follows:

License and Permission Cost

Building Permit Rs. 1,000

Fire Safety Permit Rs. 1,000
Police License For Hotel Rs. 400
Trade License Rs. 1,00,000
Bar License Rs. 30,00,000
Service Tax Registration Rs. 50,000
Town Planning Rs.5,000
 Capital Cost

Particular Name Cost

Construction cost Rs. 2,00,00,000

License cost Rs. 31,57,400
Total Rs. 2,31,57,400

Operating Cost

Particular Name Monthly Annual

Maintenance cost Rs. 2,00,000 Rs. 24,00,000
Staffing Rs. 2,84,000 Rs. 34,08,000
Electricity Rs. 50,000 Rs. 6,00,000
General expenses Rs. 1,00,000 Rs. 12,00,000
Total Rs. 6,34,000 Rs. 76,08,000

Income Profit

For Hotel the average room rate is Rs. 2500 and having occupancy of 70%

Particular Name Daily Income Monthly Income Annual Income

Room Sale Rs. 1,75,000 Rs. 52,50,000 Rs. 6,30,00,000
 RESTAURANT

For opening a restaurant having seating capacity of 75 pax required 10,000 sq ft area.

Permissions required for opening a Restaurant are as follows:

License and Permission Cost

Food Safety License Rs. 7,600

Eating House License Rs. 5,500
Liquor License Rs. 3,83,000
Fire Department Rs. 1,000
Shop And Establishment Act Rs. 500
Building Permit Rs. 1,000
 Capital Cost

Particular Name Cost

Construction cost Rs. 50,00,000

License cost Rs. 3,98,600
Total Rs. 53,98,600

Operating Cost

Particular Name Monthly Annual

Maintenance cost Rs. 40,000 Rs. 4,80,000
Staffing Rs. 3,09,000 Rs. 37,08,000
Electricity Rs. 30,000 Rs. 3,60,000
General expenses Rs. 40,000 Rs. 4,80,000
Total Rs. 4,19,000 Rs. 50,28,000

Income Profit

For Restaurant having 75 pax seating capacity having average income per day is

Particular Name Daily Income Monthly Income Annual Income

Restaurant Sale Rs. 20,000 Rs. 6,00,000 Rs. 72,00,000
 FOOD COURT

For opening food court 4,000 sq ft area is required.

Permissions required for opening a Food Court are as follows:

License and Permission Cost

Food Safety License Rs. 7,600

Eating House License Rs. 5,500
Liquor License Rs. 3,83,000
Fire Department Rs. 1,000
Shop And Establishment Act Rs. 500
Building Permit Rs. 1,000
 Capital Cost

Particular Name Cost

Construction cost Rs. 10,00,000

License cost Rs. 3,98,600
Total Rs. 13,98,600

Operating Cost

Particular Name Monthly Annual

Maintenance cost Rs. 20,000 Rs. 2,40,000
Staffing Rs. 80,000 Rs. 9,60,000
Electricity Rs. 40,000 Rs. 4,80,000
General expenses Rs. 20,000 Rs. 2,40,000
Total Rs. 1,60,000 Rs. 19,20,000

Income Profit

For food court having daily income of Rs. 20,000

Particular Name Daily Income Monthly Income Annual Income

Food Sale Rs. 20,000 Rs. 6,00,000 Rs. 72,00,000
 Total Capital Cost
Sr.
Particular Name Cost
No.
1. Water Park Rs. 1,65,78,500
2. Theatre Rs. 63,16,500
3. Amusement Park Rs. 1,26,58,900
4. Hotel Rs. 2,31,57,400
5. Restaurant Rs. 53,98,600
6. Food Court Rs. 13,98,600
Total Rs. 6,55,08,500

Total Operating Cost

Sr.
Particular Name Cost
No.
1. Water Park Rs. 52,80,000
2. Theatre Rs. 48,60,000
3. Amusement Park Rs. 52,80,000
4. Hotel Rs. 76,08,000
5. Restaurant Rs. 50,28,000
6. Food Court Rs. 19,20,000
Total Rs. 2,99,76,000

Total Income Cost

Sr.
Particular Name Cost
No.
1. Water Park Rs. 3,96,00,000
2. Theatre Rs. 64,80,000
3. Amusement Park Rs. 5,04,00,000
4. Hotel Rs. 6,30,00,000
5. Restaurant Rs. 72,00,000
6. Food Court Rs. 72,00,000
Total Rs. 17,38,80,000
 FINANCE

If you decided to expand your business or fund your personal requirement through a loan
against property then following documents –

 Certified financial documents for last 3 years.

 Your proof of residence: A Ration Card, Telephone Bill, Electricity Bill.
 Your proof of Identity: A Voter ID Card, Driver’s License, Employer Card.
 Your latest Bank Statement.
 Copies of all property documents of the concerned property that you choose to pledge
for the loan.
 Charges Loan against property

Rack Interest Rate Range

MCLR +1.95% to MCLR +2.45%
MCLR
Marginal Cost of funds based
Lending Rate

Loan Processing Charges Maximum of 1% of loan amount

Payment of EMI
2% per month on overdue EMI
amount

Stamp Duty & Other Charges As applicable per law

Repayment Scheduled Charges

Rs. 200 per scheduled

Cheque/ Electronic Clearing Services Rs. 500

Legal/ Repossession & Incidental At actual

Charges

 For sanctioning the loan amount of 100% the mortgage of 150% of required loan
amount property is kept as security deposit at bank.
 The rate of interest up to 25 crore is 9% and upon 25 crore it changes.
 The initial period of loan is 5 years.
 RESULTS & DISCUSSION

Objective 1
To study the actual cost required for the project:
By calculating the all capital cost and operating cost we should know the exact
amount of is required to start the project.

Objective 2
To find out how much profit can earn through this project:
At the end by calculating all the income getting from project we should get the
information of average monthly and average yearly income from the project.

Objective 3
To know the actual process of starting a project:
We can get how much cost is required to start the project, what are the permission
required, what to setup inside the project, finance terms and conditions.

Objective 4
To create opportunities through this project:
To create the opportunity to develop the area to develop the unused government land
which is produce good revenue amount upon development. It is also set standard and
platform to start another project in different area.

Also the economy of the place is increases so therefore the area is well developed and
facility is provided in that area. The employment is given to local people so the people
get the job. Living standard of people is also getting good. The proper development
land is done by this project by getting revenue.
 CONCLUSION
The entire process of BOT procurement mechanism is complex, time consuming and highly
susceptible to schedule cost, time and quality deviations. As the project have lots of effort
and stages for actual starting of construction. The stages start right from acquiring land,
planning, permission, costing of project. As the initial cost of project is very high, finance is
required from bank to start the project. Also the project require more time to construction,
setup. The profits that are getting from project are also high if all operation run smoothly.

Also there is high risk factor in project. It involves in numerous parties and this make it larger
and more complex with greater risk than other traditional procurement methods. Inadequate
finance to fund the BOT is the most severe risk. This risk deserves optimal priority as
financing are allocated to the private sector because BOT principle set to reduce involvement
of government in direct provision of infrastructure. Inadequate expertise in BOT project
management also constitutes a severe risk to BOT because it is new public policy. Inadequate
political support from government also deserves the risk management. Counterparty risk and
construction risk are inherent risk in BOT projects.
 SUGGESTION
1. The government should give concession to the B.O.T. projects. Government should
give concession in finance amount.
2. Political support is must in this type of projects.
3. This type of project requires large number of manpower to fast construction of project
so hiring employee is necessary.
4. The permission for the project is take too much of time so the government should
make easy way to provide fast permission.
5. The document is also major factor so the less documentation is needed.