“AL-KHALIQUE” CNG Filling Station Project Appraisal
Feasibility Reporton
AL-KHALIQUE CNG Filling Station
Course Instructor: Mr. Javaid Iqbal
Group Members:Jawad Junaid (15)Abdul Samad (13)
Muhammad Bilal (41)
Program: MSC A&F (Afternoon)Session: 2008-2010
Department of CommerceThe Islamia University Bahawalpur
Department Of Commerce IUB1
“AL-KHALIQUE” CNG Filling Station Project Appraisal
“AL-KHALIQUE” CNG Filling Station Near Sutlej Toll Plaza Multan Road
BAHAWALPUR
Department Of Commerce IUB2
“AL-KHALIQUE” CNG Filling Station Project Appraisal
Dedication
We dedicate this report to that personality to
whom every Muslim wants to idealize. That
personality is HAZRAT MUHAMMAD
MUSTAFA (PBUH). He (PBUH) was a role
model in every field of life. He (PBUH) tells us
how to work hard to achieve something.
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“AL-KHALIQUE” CNG Filling Station Project Appraisal
PrefaceDepartment Of Commerce has always tried to make its students be
familiar with the different techniques in the field of Project
Appraisal so that they can understand & present the concepts of
Project Appraisal in the today’s world of progress & development.
The importance of principal work almost exists in every
professional field. Practical knowledge makes man a technical
person who enables to do every work efficiently regarding his
profession. The very distributive feature of the degree of Business
Administration is that it stresses more on the practical aspects of
study especially the 3rd semester. Our teachers have extremely
realized this importance & they use all the tact’s to expose us to
the real field circumstances.
Project Appraisal has become a common phenomenon now-a-
days. We have tried our level best to fulfill the requirements of the
topic. Every effort has been made to incorporate all the available
means of information to make this assignment comprehensive. We
tried our best to accomplish our work.
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“AL-KHALIQUE” CNG Filling Station Project Appraisal
ACKNOWLEDGEMENT
Special thanks to Almighty Allah, creator of the creative
minds.
We pay abundant thanks to our encouraging teacher &
instructor Mr. JAVAID IQBAL for enlightens our minds
with the rich information about the topic.
Special thanks are extended for those who help us in printing
& composing the research.
We are especially thankful to Mr. Tayyab Bashir (M.D Sultan
Bahoo CNG Station) and Mr. Saeed Ahmed (Manager Sultan
Bahoo CNG Station) Who provided us the necessary
information and show us the process of conversion of natural
gas into compressed natural gas (CNG).
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“AL-KHALIQUE” CNG Filling Station Project Appraisal
Our Mission Statement
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Our mission is to provide the purify compressed natural gas (CNG). We will provide 24 hours service to our customers so that we can facilitate them according to their requirement. We have also tuc shop and also tire service shop at our CNG station.
“AL-KHALIQUE” CNG Filling Station Project Appraisal
TABLE OF CONTENTS
SERIAL #. DESCRIPTION PAGE #.
1. Executive Summary 09
2. Implementation 03
3. The Project Introduction 14
4. The Project Site & Location 15
5. NOCs16 16
6. Market Analysis 17
7. Technical Analysis 19
8. Local Equipment 20
9. Flow Diagram 28
10. Personal Analysis 30
11. Assumptions 32
12. Annexure 33
13. Swot Analysis 46
14. Recommendation 48Department Of Commerce IUB7
“AL-KHALIQUE” CNG Filling Station Project Appraisal
15. Conclusion 49
“AL-KHALIQUE”CNG Filling StationNear Sutlej Toll Plaza Multan Road
Bahawalpur
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“AL-KHALIQUE” CNG Filling Station Project Appraisal
EXECUTIVE SUMMARY
NAME OF THE PROJECT: AL-KHALIQUE CNG STATION
NATURE OF INDUSTRY: CNG STATIONA NEW PROJECT
CORPORATE STATUS: PARTNERSHIP FIRM
LOCATION OF PROJECT BAHAWALPUR
ADDRESS NEAR SATLEJ TOLL PLAZA MULTAN ROAD BAHAWALPUR
We are the fresh and energetic students of MSC A&F. We are going to start a new
business. We have selected the business of CNG Station. We have selected this
business because there is so much potential in this business. Especially today’s there
is increasing number of cars. This is also a challenging project. This will be the test of
our hidden qualities.
AL-KHALIQUE CNG STATION registered firm established with the objective of
installing a CNG Re-Fuelling Station at Sutlej Toll Plaza, district Bahawalpur. The firm
is intending to start its operations initially with one station in Bahawalpur. The firm has
plans to expand its network later to in other cities.
CNG is environmentally friendly fuel since it unleaded and releases less than 10%
carbon mono oxide as compared to petrol and is an indigenous fuel commonly known Department Of Commerce IUB9
“AL-KHALIQUE” CNG Filling Station Project Appraisal
as natural gas and Sui gas. Natural gas is compared to high pressure for storage, for
this purpose, a compressor and storage facility is installed, the vehicle to run on CNG,
it is suitably modified to have a vehicle storage cylinder, high pressure has piping and
filling system and other items like pressure regulator, pressure has relief value,
solenoid switch etc.
We are going to produce only one product i.e. CNG. We are not producing any
other product. We are following the single product approach. So the only problem we
have to face is the production problem. Growth of sale does not matter. At initial
stage we will be producing at 75% capacity.
We purchased our plant from abroad and as well as from local. Plant reached at
site at January 1, 2010. Our plant installed on March 1st 2010. It started its trial run on
March 2010. It started its commercial operation on January 1st 2011.
The financial ratios of our company are increasing. Its means that our company is
prosper day by day. So the company is doing very well business and there is no
chance of loss.
Estimated cost of project (Rs in “000”) =
Fixed cost 45408
Initial Working Capital 5859
Total Cost 51260
Means of Finance:
There are two types of means of finance. One is from our own resources and other
is from taking debt from Bank. The ratio is of debt and equity is of 60:40
MEANS OF FINANCED e b tHabib Bank Ltd 30760 30760
TOTAL DEBT: 30760
E q u i t y
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“AL-KHALIQUE” CNG Filling Station Project Appraisal
- Paid-up Capital (Sponsors) 20507 TOTAL EQUITY 20507
TOTAL DEBT & EQUITY 51260
DEBT : EQUITY RATIO 60 : 40 SPONSORS' STAKE 40%
Name of lender:
Our name of lender is Habib Bank Ltd which will provide us the entire
loan which we need for the completion of our project. The interest rate of
the Bank is 18%.
Name of sponsors:
The sponsors of the project are professionally qualified and have
valuable and extensive experience of business management regarding. They have got
petrol pump & CNG and good trading contacts and market reputations in the city.
The project faces not problems in terms of marketing its product. The sponsor’s
experience would assist the firm in its smooth and profitable operation.
The sponsors are financially sound and capable to contribute their part of
the equity in the proposed scheme. The managing partner of the firm has vast
experience in the managing of this industrial organization
SR.NO. NAME DESIGNATION
1. Jawad Junaid Managing partner
2. Abd-Ul- Samad Partner
3. M. Bilal Partner
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“AL-KHALIQUE” CNG Filling Station Project Appraisal
The detail of machinery is given below:
Compressor model skid Mounted
Water Cooled W-Type Compressor
High pressure Piping 3-line
Priority fill Panel Spares
Dispenser
Storage Cylinder
Name of civil contractor :
The name of civil contractor is Mr. Naeem Ashraf Uppul. We hire the services of that contractor for constructing our building and pay him fee for his services.
Name of Machinery Supplier:
The name of machinery supplier is Mr. Matloob Ahmed. He arranged the machinery from the foreign and get his commission for his services.Address:21 Bird wood road of jail road Lahore Punjab Pakistan
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“AL-KHALIQUE” CNG Filling Station Project Appraisal
IMPLEMENTAION PERIOD
The project is expected to be implemented within 6 months from the date of the submission of the proposal to the bank. The details of the activities along with time required are given as under:
TASK MONTHS
Bank approval February 2010
Purchase of land March 2010
Construction of building October 2010
Arrival of machinery at site November 2010
Installation completed December 2010
Trial run December 2010
Commercial operation started January 2011
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“AL-KHALIQUE” CNG Filling Station Project Appraisal
INTRODUCTION OF COMPANY
The company is doing partnership business. There are three sponsors of the company which are the partners of the company also. The company is doing legal business. Profit earned by the company is distributed among the members of the company.
We are going to produce only one product i.e. CNG. We are not producing any other product. We are following the single product approach. Growth of sale does not matter. At initial stage we will be producing at 75% capacity.
We purchased our plant from abroad and as well as from local. Plant reached at site at January 1, 2010. Our plant installed on March 1st 2010. It started its trial run on March 2010. It started its commercial operation on January 1st 2011.
CNG stands for Compressed Natural Gas. It is one of the most viable alternatives to traditional fuel energy resources for the automotive industry. CNG is low in pollutants, high in calorific value and heat yield, economical and available in abundance globally
The business of CNG filling station has marked its place in the country through growth during the last few years. This growth has opened up new opportunities and more CNG filling stations are being setup all over Pakistan. The prime reason for this is the low cost of the fuel. Along with that, CNG fuel is less hazardous to the environment as compared to the traditional petroleum fuel
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“AL-KHALIQUE” CNG Filling Station Project Appraisal
LOCATION OF THE PROJECTThe project is proposed to be setup near the Sutlej Toll
Plaza Multan Road Bahawal Pur. The site enjoys the following advantages:
Easy availability of raw material
Availability of communication facilities like telephone, telex, etc
Access to main road, sources of power, water, fuel, etc.
Availability of skilled and unskilled manpower.
Free from other environmental hazards like water-logging, floods salinity,
etc.
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“AL-KHALIQUE” CNG Filling Station Project Appraisal
NOCs Required For CNG Station
No Objection Certificate will be required from the following departments prior to theCommencement of the business:
Concerned development authority of the city (Bahawalpur Development Authority)
Traffic Engineering and Planning Authority (TEPA)
Traffic Police (SSP)
Department of Civil Defense
National Highway Authority (NHA)
Central Board of Revenue (CBR)
Civil Administration-Tehsil Municipal Administration (TMA)
Oil and Gas Regulatory Authority (OGRA)
No person can set up CNG station without first obtaining license from the Authority i.e. Oil and Gas Regulatory Authority Islamabad under Rule 6 of CNG (Production & Marketing) Rules, 1992. Initially OGRA issues provisional license for a period of 2 years for setting up CNG station. After obtaining provisional license from the authority, the licensee is supposed to start construction of the station and also obtain NOCs from the local authorities and a license from DEPARTMENT OF EXPLOSIVES on form B .
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“AL-KHALIQUE” CNG Filling Station Project Appraisal
MARKET ANALYSIS
The commercial application of CNG technology now forms an important element ofGovernment’s petroleum policy, which is reflected in the efforts made by the governmentFor installing so many CNG stations in the country and converting 600000 vehicles on CNG fueling system till February 2005.
Market Demand: At present there are more than too many vehicles, which have been converted to CNG fuel. Due to the increasing prices of petroleum products, the trend of converting cars to CNG fueling system has been on a rise. However, there exist a large number of people who were reluctant to convert their vehicles from petrol to gas due to safety concerns. Recently, many car manufacturers have started manufacturing the cars with built-in CNG fueling system. This change has led to enhancing the confidence in the minds of the general public regarding the safety concerns, and now, more people are inclined towards purchasing these factory-fitted CNG fueling system cars.
Present Demand: The present demand of CNG is very high because the cost of CNG is very
cheep as compared to petroleum, diesel and LPG. This is also
beneficial for the life of engine of vehicles so the people prefer the
CNG.
Now the transporters also converting their vehicles in to CNG vehicles because
cost of CNG is very low and in this way they can earn high profits and engine of
their vehicles also saves so the demand of CNG is increasing day by day. Now a
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“AL-KHALIQUE” CNG Filling Station Project Appraisal
day the demand of CNG is so high that there is supply and demand gap
generated for CNG.
The use of CNG in vehicles brings an added blessing that it is much less
polluting than regular gasoline (petrol). The emissions coming out of CNG
vehicles consist of water vapors and carbon monoxide (CO).
With Pakistan going full ahead with making CNG as the primary fuel source
for transport, one concern is that Pakistan is depleting its Natural Gas reserves
faster than ever before.
Estimated demand during next five years:
It is estimated that the demand of CNG in next five years will be so high.
The only reason is that now a days all vehicles are converted into CNG vehicles.
The millions of vehicles are converted into CNG vehicles. So it is impossible that
the demand of CNG I going to be end in next years.
Distribution channel:
No distribution channel is required for CNG. The customers come at CNG
station and fill their cars with CNG. So no distribution channel is required.
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“AL-KHALIQUE” CNG Filling Station Project Appraisal
TECHNICAL ANALYSIS
The main machinery at CNG station is compressor. The technology involved in machinery is very advance and technical. Pakistan is not to advance to produce or manufacture the compressor because Pakistan has no technology to manufacture it so the whole technology involved is imported from the Canada because Canada is very advance in technology and manufacturing high standard of compressor. Dispensing machine also imported from Canada. Compressor imported from Canada is very good in its function. It contains two generators one is run by the natural gas and other is run by electricity. So that in case of absence of electricity or Sui gas other generated can be used. This compressor converts the Sui gas into CNG with the help of 3 way pipelines and cooling tower then this compressed natural gas is transferred to Dispensing machine to vehicles and system is control by Control panel.
CNG has now become a major area of investment and is being actively promoted as alternative fuel across the entirety of the automotive industry in Pakistan. As a cheaper and environmentally friendly alternative, the shift to CNG has proved immensely popular, especially in light of the spiraling price of oil. With an exponentially growing market, there are growing challenges and potentials for growth arising as well. Being one of the pioneers of CNG sector in Pakistan.
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“AL-KHALIQUE” CNG Filling Station Project Appraisal
EQUIPMENTS AND FACILITIES
The proposed CNG station will comprise of following main facilities;
Compressors
Storage cascade
Dispensing point
Building & other civil works
Gas receiving & electricity connection.
List of LOCAL EQUIPMENTS
CNG stations the major component of equipment used is imported. But some locally available components are also used.
Below is given a list of some such equipments and consumables. Lo CNG station
1-Buffer Suction vessel with Pressure gage and Safety relief valve
2-Blowdown Recovery with Pressure gage and Safety relief valve
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“AL-KHALIQUE” CNG Filling Station Project Appraisal
3-MS pipes and fittings for Gas Inlet, Bleed gas and safety relief vent lines
4-Clamps for supporting low pressure, high pressure gas pipes
5-GI pipes with fittings for Water IN and OUT lines
6-Water pump with motor
7-Cooling Tower
8-Air Compressor
9-Soft pipes (tubes) for air flow
10-Electric Cables for Main Compressor motor, Oil pump motor, Water pump Motor, Cooling Tower fan motor, Automation devices, Bare Panel emergency buttons, Earth plate copper strip
11-GI flexible pipes for insulation of cables
12-Pressure Gas Regulator to be installed between Buffer and Blow down vessel
13-NRV to be fitted between Buffer and Blow down vessel
14-Flexible Pipe for Gas Inlet
15-Ball valve for Gas Inlet
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“AL-KHALIQUE” CNG Filling Station Project Appraisal
Compressor: Two compressors of 530 Nm/hr will be installed with appropriate storage cascades.
Sequential and three ways penal priority installed in separate room will be operated from
a control panel outside the compressor room.
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“AL-KHALIQUE” CNG Filling Station Project Appraisal
COLLING TOWER: When the compressor run it produces heat which should be minimize. For this purpose we used cooling tower. Now the question arises how it work. Its working is very simple it rotate the water in this way heat evolve out and temperature minimize
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“AL-KHALIQUE” CNG Filling Station Project Appraisal
Electric Control Panel
Electric control panel is required to operate the gas compressor. This panel will be mounted in the control room. If there is any problem is occur in compressor and cooling tower then the electric control panel locate the error and in this way easily remove..
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“AL-KHALIQUE” CNG Filling Station Project Appraisal
Storage Cascade
Storage cascades/cylinders are used to store the natural gas. In absence of light we can use the gas from the storage cascade..
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“AL-KHALIQUE” CNG Filling Station Project Appraisal
Priority Panel
Priority Panel for Vehicle Priority During rush hours, the compressor is directly connected to the dispenser, bypassing then storage cascades/cylinders with the help of priority panel, facilitating the refueling of vehicles at a faster rate.. CNG Dispenser high flow dual hose Gas is filled into the vehicles with the help of dispenser. This dual hose dispenser is capable of handling two vehicles at a time.
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“AL-KHALIQUE” CNG Filling Station Project Appraisal
.
Input Required
The main input for CNG is natural gas which is obtained from SNGPL. This is the main input for the CNG then electricity is also required to run the compressor. In the case when there is no electricity the diesel is also required to run generator , so that the supply of CNG in the vehicles will not stop.
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“AL-KHALIQUE” CNG Filling Station Project Appraisal
Some chemicals also used these chemicals include one type of acid and one type of base. These two used in the cooling tower to purify the gas.
Flow Diagram
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Sui Gas Yellow Pipe Goes to the Filters
TANK
For Purificatio
n
Micro Filters(Further Purification)
Enters the Compressor Machine Room
Manually Operators
Auto Operators
STAGE 1 Cooling Process
STAGE 2 More Compressed
STAGE 4Comes In the Cooler
STAGE 3Further Compressed
Priority PanelBanks Distributors
Regulators Used for the Adjustments
Dispenser MachinesVehicles
“AL-KHALIQUE” CNG Filling Station Project Appraisal
EXPLANATION:
The above is the chart that shows the brief process how GAS (SUI) moves from different processes and finally reaches the ultimate vehicle in the shape of compresses GAS.S
First of all it enters into the FILTERS for purification purpose and this consists of two filters. And then it enters into a TANK and then again enters into the MICRO FILTER for further purification and finally enters into the main compressor room. Here it is operated in a two ways, manually and Auto control.
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“AL-KHALIQUE” CNG Filling Station Project Appraisal
After these it enters into the FOUR STAGE compressor machine for the purpose of COOLING. This is a complex stage and the main purpose of this machine is to just only compress the gas in order to make high pressure.
In the next step, it moves to the Priority PANEL. From where it is filled into the GAS CYLINDERS and finally reaches the VEHICLES through the help of DISPENSORS.
PERSONAL Analysis
Management
The overall management and control of the firm will be entrusted with partners. The partnership will comprise of following partners.
SR.NO. NAME DESIGNATION
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“AL-KHALIQUE” CNG Filling Station Project Appraisal
1. Jawad Junaid Managing partner
2. Abdul Samad Partner
4. M. Bilal Partner
All of the promoters are the fresh Student of MSC A&F .
The day to day running and operation of the project will be carried out by
sponsoring partners with the help of team of professional. The team of
professional will be hired for managing financial and technical aspect of the
project. The team will consist of qualified and experienced personnel.
Requirement of Staff
Technical staff
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“AL-KHALIQUE” CNG Filling Station Project Appraisal
For the well check and running of compressor a person is required which should have done the diploma in Electrical engineering. So that he can understand the working and function of compressor, and one helper is also required having diploma in the electrical engineering.
Non Technical Staff
There are ten or more persons required which should be metric. These staff required to operate the dispensing machine for fulfilling the gas into vehicles. Gas filling is so simple process and it is not a technical process so there is not need for a special staff, which should have some specific kind of diploma. One sweeper is also needed for the cleanness of the CNG station. And one security guard is also needed for security purpose.
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“AL-KHALIQUE” CNG Filling Station Project Appraisal
Assumptions
We are taking 360 days a year
There will be no load shedding problem from august and we are starting from 1 st
July, 2010 and the load shedding will be for 3 hrs a day.
After 1 year there will be no load shedding in the year 2011
We are assuming a 15 % increase in wages every year.
Overheads are .5% of sales
Erection for improved machinery is 15%
Prices of the machinery will increase in the future
It is also assumed that the need of CNG will be increased in the future
Imported machinery will be purchased on loan from Habib Bank @18%.
We are using straight line method for depreciation.
Income tax will be charged at 35%.
The Debt to equity ratio will be 60:40respectively
There will be the business of CNG filling.
Other income is generated from the tuck shop, tire service shop and also from the
oil exchange and vehicle service shop.
The company is earning most of its revenue from other income resource.
The cost and sale of CNG will be increase 5% each year.
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“AL-KHALIQUE” CNG Filling Station Project Appraisal
ANNEXURE COST OF LAND
Sr. No. Description
Area in
Unit Cost
Rs ("000")
Marlas Rate in percentages
Total Cost
1 Land 50 100,000 5,000
2 Registration 1% of cost of Land 50 1% 1,000 50
3 Stamp Duty 2% of Cost of Land 50 2% 2,000 100
4District Council corporation Fee 1% of Cost of Land 50 1% 1,000 50
5Development Charges 5% of Cost of Land 50 5% 5,000 250
6 CVT and TMO Fee 2% cost of Land 50 2% 2,000 100
Total Cost of Land 111,000 5,550
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“AL-KHALIQUE” CNG Filling Station Project Appraisal
Cost of civil works
AL-KHALIQUE CNG Filling Station Estimated Cost of Civil Works
1marla = 272 Sq feet
50marlas = 136000 Sq feet
Sr. No. Description
Type of Unit of Covered Rate Per
Rs ("000")
Building Construction area UnitTotal Cost
1 Compresser Room RCC Square feet 1500 1200 18002 Tire Shop RCC Square feet 200 1200 2403 Wash Rooms RCC Square feet 100 1200 1204 Electric panel room RCC Square feet 500 1200 6005 Mosque RCC Square feet 800 1200 9606 Manager room RCC Square feet 600 1200 7207 Account section RCC Square feet 400 1200 480
8Cost of Jumbo Lawn
Open area Square feet 2,500 800 2000
9 Generator Room RCC Square feet 500 1200 60010 Tuc shop RCC Square feet 400 1200 48011 Cyledrical room RCC Square feet 1000 1200 120012 Store RCC Square feet 300 1200 36013 Fire section room RCC Square feet 300 1200 36014 Workshop area RCC Square feet 1000 1200 120015 Main Canopy RCC Square feet 2000 1200 2400
16 Front areaOpen area Square feet 1500 800 1200
Total Cost of Civil Works 13600 14,720
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“AL-KHALIQUE” CNG Filling Station Project Appraisal
Annexure - IIIAL-KHALIQUE CNG FILling Station
Estimated Cost of Machinery ("000")
Sr.No. Description Qty Unit Cost LCY FCY Total cost1 Compressor Machine 1 4,500,000 4,500,000 4,5002 Dispensors 3 1,200,000 3,600,000 3,6003 Storage Cascade 40 50,000 2,000,000 2,0004 3 Way High pressure Lines 3 200,000 600,000 600
5 Control meter system 1 2,000,000 2,000,000 2,0006 Priority panel 1 200,000 200,000 2007 Cooling tower 1 100,000 100,000 1008 Oil filter + stainer 2 55,000 110,000 110
10 Control panel 1 450,000 450,000 45011 Generator 2 500,000 1,000,000 1,00012 Water pump with motor (7.5 KW) 2 25,000 50,000 5013 Chemicals + oil 1 50,000 50,000 5014 MSV 3 15,000 45,000 4515 Fire extinguisher 6 10,000 60,000 6016 Contingency 5% - 738000 738
Total Cost of Machinery 4,953,000 10,550,000 15,503
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“AL-KHALIQUE” CNG Filling Station Project Appraisal
AL-KHALIQUE CNG Filling StationEstimated cost of the Project
("000")Sr.No. Description LCY FCY Total cost
1 Land 5,550 - 5,550
2 Building 14,720 - 14,720
3 Machinery 4,95310,55
0 15,5034 Installation & Erection 15% of Machinery 2,325 2,3255 Insurance 5% of Cost of Machinery 775 775
6 Intrust during Construction 5,614 5,614
8 Furniture and Fixture 150 1509 Office Equipment 100 10010 Pre-operating expenses 671 671
Estimated fixed cost 45,408
Add: Net Initial Net Working Capital 5,859
Total Estimated Cost of Project 51,266
MEANS OF FINANCED e b t
Habib Bank Ltd 30,760
30,760
TOTAL DEBT: 30,760
E q u i t y
- Paid-up Capital (Sponsors) 20,507
20,507
TOTAL EQUITY 20,507
TOTAL DEBT & EQUITY 51,266
DEBT : EQUITY RATIO 60 : 40 SPONSORS' STAKE 40%
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“AL-KHALIQUE” CNG Filling Station Project Appraisal
AL-KHALIQUE CNG Filling Station Initial Net Working Capital Requirement
Descriptions Rs. "000"
A. Current Assets:
1 Advances, & Prepayments 200 2 Stores & Spares 300 3 Accounts Receivable is 2% of sakes 2% 859 4 Cash 4,500
Total Current Assets 5,859
B. Current liabilities -
Initial Net Working Capital 5,859
Years 2011 2012 2013Production Capacity 80% 85% 90%
Consumption of Raw Material
Description Quanity ("000")
3000 Kg of Sui Gas/day/Compressor 864 918 972Total Quantity Consumed 864 918 972
Cost of Raw material: Rs.30/Kg
Description Rs. ("000")
Sui Gas @ 30/kg 25920 27540 29160Total Cost 25920 27540 29160
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Sales Revenue:
DescriptionUnit
Price(Rs.)Rupees ("000")
75% 80% 85% 90% CNG 53 0 45,792 48,654 51516
Total Sales 42,930 45,792 48,654 51516
General Expenses:
Sr. No. Description Year Exp. ("000")
1 Printing & Stationary 752 Telephone, Telex, Postage 403 Rents, Rates and Taxes 1004 Entertainment 605 Miscellaneous 50
Total 325
Assumptions: Administrative Salaries will increase @ 15% every year.
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Administrative And General Expenses Rs “000”1 Year = 12 months
Sr. No. Designation No. of Salary/ Annual
Employees Month Salary1 Manager 1 20,000 2402 Cashier 2 16,000 1923 Accountant 1 10,000 1204 Operator 1 8,000 965 Gas Fillers 12 72,000 8646 Peon/Sweeper 1 6,000 727 Security Guard 2 12,000 144
Total cost 20 144,000 1728
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Year Wise Administrative Salaries:Note: Salaris will be increase 15% each year
No. of Rupees ("000") Sr. No. Designation Employees 2010 2011 2012 2013
1 Manager 1 240 276 317 365 2 Cashier 2 192 221 254 292 3 Accountant 1 120 138 159 183 4 Operator 1 96 110 127 146 5 Gas Fillers 12 864 994 1,143 1,314 6 Peon/Sweeper 1 72 83 95 110 7 Security Guard 2 144 166 190 219
Total 20 1728 1,987 2,285 2,628
General Expenses : Sr. No. Description Rupees ("000")
1 Printing & Stationary 75 83 91 1002 Telephone, Telex, Postage 40 44 48 533 Rents, Rates and Taxes 100 110 121 1334 Entertainment 60 66 73 80s5 Miscellaneous 50 55 61 67
Total general expenses 325 358 393 433
4- DEPRECIATION COST
DEPRECIATION COST HAS BEEN CALCULATED ON STRAIGHTLINE PRINCIPLE APPLYING USUAL RATES AS UNDER;-
Rupees("000")Amt. of
depreciation
Plant & Machinery 15,503 10% 1,550Building 14,720 5% 736Furniture & Fixtures 150 10% 15Office equipment 100 20% 20
2,321
Note; The amount of depreciation will be same each year
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“AL-KHALIQUE” CNG Filling Station Project Appraisal
Manufacturing Overhead Cost:
AL-KHALIQUE FILLING STATION
PriceKW OR
Unitsmonth
Electricity fixed cost 315 160 12Electricity variable cost 10 2000 12
Description Rs ("000")
Fixed Cost:
Power: @ 315/160/KW/Month 605 Insurance: @ 5% of machinery 775
Fix charges of gas 14,40
0
Maintenance and Depreciation:
Overhauling Expenses of Compressor 30 Maintenance of Building @ 5% of Cost of Building 736 Maintenance of Dispensors 50
Total Fixed Cost 16,59
6 Variable Manufacturing Expenses:
Power:@ 10/unit of 2000 units/Month 240 cost of gas 24,300
Total Variable Cost 24,54
0
Description 2010 2011 2012 2013 Rupees ("000")
75% 80% 85% 90%Fixed Cost 16,596 16,596 16,596 16,596
Add: Variable Cost 24,300 33,567 27,540 29160Total Overheads Cost 40,896 50,163 44,136 45,756
Department Of Commerce IUB41
“AL-KHALIQUE” CNG Filling Station Project Appraisal
AMORTIZATION TABLENmae of Bank Habib Bank LimitedAmount of loan
30,760,000
Rate Of Intrest 18%
per Annuam
Period Of Loan 5 Years 360
Repayment of Intrest Quartely Instalment
Repayment of Instalment Half YearlyDate of Disbursement of Loan 3/31/2010
Completion of the Project 31/12/2010Date of Commercial Production 31/3/2011Date of Repayment of principle 30/6/2011 6 Instalment
No of Principle Amount Total Outstanding
Due Dates Days Instalment of Intrest Instalment Principle
3/31/2010 0 0 0
- 30,760,0
00
6/30/2010 9
1 0 1,399,58
0 1,399,5
80 30,760,0
00
9/30/2010 92 0
1,414,960
1,414,960
30,760,000
12/31/2010 92 0
1,414,960
1,414,960
30,760,000
3/31/2011 90 0
1,384,200
1,384,200
30,760,000
6/30/2011 91
3,076,000
1,399,580
4,475,580
27,684,000
9/30/2011 92
1,273,464
1,273,464
27,684,000
12/31/2011 92
3,076,000
1,273,464
4,349,464
24,608,000
3/31/2012 91
1,119,664
1,119,664
24,608,000
6/30/2012 91
3,076,000
1,119,664
4,195,664
21,532,000
9/30/2012 92 990,472
990,472
21,532,000
12/31/2012 92
3,076,000 990,472
4,066,472
18,456,000
3/31/2013 90 830,520
830,520
18,456,000
6/30/2013 91
3,076,000 839,748
3,915,748
15,380,000
9/30/2013 92 707,480
707,480
15,380,000
Department Of Commerce IUB42
“AL-KHALIQUE” CNG Filling Station Project Appraisal
12/31/2013 92
3,076,000 707,480
3,783,480
12,304,000
3/31/2014 90 553,680
553,680
12,304,000
6/30/2014 91
3,076,000 559,832
3,635,832
9,228,000
9/30/2014 92 424,488
424,488
9,228,000
12/31/2014 92
3,076,000 424,488
3,500,488
6,152,000
3/31/2015 90 276,840
276,840
6,152,000
6/30/2015 91
3,076,000 279,916
3,355,916
3,076,000
9/30/2015 92 141,496
141,496
3,076,000
12/31/2015 92
3,076,000 141,496
3,217,496
Total 30,760,00
0 19,667,944
50,427,944
Intrest during Construction
from 3/31/2010 to 3/31/2011 5,613,7
00 2011 2012 2013 2014 2015 2016
Interest 3,946,508
4,220,272
3,085,228
1,962,488
839,748
Instalments 3,076,000
6,152,000
6,152,000
6,152,000
6,152,000
3,076,000
Estimated Income StatementFor the year ending Sept. 30, I II III IVEfficiency Assumed : 75% 80% 85% 90%
SALESConstruction year 45,792 48,654
51,516
COST OF GOODS SOLD :
- Raw Materials 25,920 27,540 29,160
Depreciation Exp 2,32
1 2,32
1 2,321
G R O S S P R O F I T 17,551 18,793 20,035
OPERATING EXPENSES
- Admin & General Expenses
1,987
2,285
2,628
Total Operating Expenses
1,987
2,285
2,628
OPERATING PROFIT 15,56
4 16,50
7 17,40
7 NON OPERATING EXPENSES
Department Of Commerce IUB43
“AL-KHALIQUE” CNG Filling Station Project Appraisal
- Financial Expenses 5,33
1 4,22
0 3,08
5
- Amortzn. of Prelim. Exp 134.2 134
134
- Workers Welfare Fund 5% 815
865
14,192,873
Sub-Total 6,280
5,219
912
P R E - T A X P R O F I T
9,283
11,288
16,495
Income Tax35%
3,249
3,951
5,773
N E T P R O F I T 6,034
7,337
10,722
Dividend - - -
RETAINED EARNINGS 6,034
7,337
10,722
13,371
24,093
Estimated Balance SheetAs on Sept. 30, Constructn. I II IIIASSETS
Cash 5,85
9
9,375 12,141 13,393
Accounts Receivables
916 973 1,030
Stores & Spares
1,000 1,100 4,600
Advances & Depostis
500 700 2,915
Department Of Commerce IUB44
“AL-KHALIQUE” CNG Filling Station Project Appraisal
Total Current Assets
5,859
11,791 14,914
21,938
Fixed Assets at cost 44,7
37
44,737 44,737 44,737 Less: Accumulated Dprcn.
-
2,321 4,643 6,964
Net Fixed Assets: 44,7
37
42,415 40,094 37,7
73 Preliminary Expenses:
671
537 403
268
Total Assets: 51,
266
54,743 55,410 59,9
79
LIABILITIES & EQUITYCurrent Liabilities
Account Payable
518
-Workers Welfare Fund
-
- Dividends Payable
- -
- Cur. Mat. of L T Debt
-
3,076 3,076 3,076 Total Current Liabilities:
-
3,594 3,076
3,076
Long-term Liabilities
HABIB BAMK LIMITED
30,760
24,608 18,456
12,304 Total Long-term Liab.:
30,760
24,608 18,456
12,304
EQUITY
Paid up Capital 20,5
07
20,507 20,507 20,507
- Un-appropriated Profit
6,034 13,371 24,093
Total Equity: 20,5
07
26,541 33,878
44,599 Total Liab. & Equity:
51,266
54,743 55,410
59,979
CASH FLOW STATEMENT
For the year ending Sept. 30, Const. Yr. I II III
SOURCESOperating Profit - 6,034 7,33 10,72
Department Of Commerce IUB45
“AL-KHALIQUE” CNG Filling Station Project Appraisal
7 2
Add Back: Depreciation - 2,321 2,32
1 2,32
1
Amortization - 134 13
4 13
4 Funds from Operations - 8,490
9,793
13,177
- Other Income - -
HABIB BANK LTD. 30,76
0 518
Increase in Current Liab. - - 3,07
6 Increase in Bank Borrowings - -
Paid up Capital 20,50
7 -
TOTAL SOURCES 51,26
6
9,008 12,86
9 13,17
7
APPLICATION OF FUNDS
Investment in Fixed Assets: 44,73
7 -Preliminary Exp 671 - - Financial Expenses - - Repayment of : - - Custom Debentures - - social security
- Bank Borrowings - 3,076 6,15
2 6,15
2
Taxes 3,95
1 5,77
3 Increase in current Assets: 2,416 TOTAL
45,40
8 5,492 10,10
3 11,92
5
Surplus/(Deficit) 5,859
3,516
2,766
1,252
Cash Balance - Opening -
5,859
9,375
12,141
Cash Balance - Ending 5,859
9,375
12,141
13,393
Department Of Commerce IUB46
“AL-KHALIQUE” CNG Filling Station Project Appraisal
Calculation Of Payback
Years Net Profit Depreciation Amortization
0 0
1 6,034 2,321 134 8,489
2 7,337 2,321 134 9,793
3 10,722 2,321
134 13,177
Inflows 31,459 outflow 51,266
Pay back period 1
Department Of Commerce IUB
Calculation Of IRR Years Net Profit Depreciation Amortization Cash Outflow/ Inflow
0 - (51260)1 6,504 2,321 145 24562 7,643 2,321 145 2456 3 8,737 2,321 145 2456
IRR 21%
R A T I O S:Current Ratio
3
5
7
Liquidity ratio
- Gross Margin (%)38.3
%38.6
%38.9
%- Operating Margin (%) 34%
33.9%
33.8%
- Net Margin (%)13.9
%15.6
%20.8
%
47
“AL-KHALIQUE” CNG Filling Station Project Appraisal
Interpretations
Current ratio is continuously increasing it means that current assets of the company
are increasing continuously or there is a decrease in the current liabilities. A good
company has a good ratio of at least 1.25 The station has above this standard which
shows a good financial position
There is a huge sales being earned on the assets which shows assets are being
utilized in a good manner.
Gross profit margin ratio shows the increasing trend because cost and sale price of
natural gas increase up to 5%.. So the gross profit margin ratio is increasing year
wise.
The operating profit ratio is showing the increasing trend which shows that the
business of company profitable and company is earning well profit.
The net profit margin shows that CNG industry has a good growth rate now-a-days
hence it will good in the future.
The cash ratio of company is very good in all the years. It means the company has
sufficient cash to discharge its liabilities.
IRR is 21% that is good for the company.
Department Of Commerce IUB48
“AL-KHALIQUE” CNG Filling Station Project Appraisal
SWOT ANALYSISStrength:
Raw material is easily available
Access to customers
Well technology is used
Demand is very high
Profit earning is high
Weakness:
Recourses are going to be end
Security problem
Government restriction
Load shedding of sui gas
Threats
The proposed project will be facing the following threat:
Market saturation over a longer period of time due to a large number of entrants
Threat of increase in the prices of the natural gas by the government
SAFETY FEATURES
CNG has four safety features that enable it to be inherently a safer fuel as compared to gasoline, diesel or LPG.
a) CNG is lighter than air so if it first rises and dissipates into the atmosphere, on the other hand fuels will puddle on the grounds, should a leak occur.
b) It has a self ignition temperature of 700-C against 455-C for gasoline.Department Of Commerce IUB49
“AL-KHALIQUE” CNG Filling Station Project Appraisal
c) CNG has to mix with air in a small range 4 to 14% by volume, for combustion to take place. This is a lower range, as compared to petrol.
d) CNG is a substitute for gasoline (petrol) or diesel fuel. It is considered to be an environmentally "clean" alternative to those fuels. It is made by compressing methane (CH4) extracted from natural gas. It is stored and distributed in hard containers, usually cylinders.
Department Of Commerce IUB50
“AL-KHALIQUE” CNG Filling Station Project Appraisal
RECOMMENDATION
On the behalf of my feasibility report I would like to recommend that this business is very profitable business. If the resources of natural gas increased and some precaution are followed then we can easily start a new CNG station.
Government should also make such type of strategies and rules and regulations that a new investor can easily enter in such type of business. There should be no barred for entering in this type of business. OGRA and SNGPL should also be helping.
To finance such type of project the banks also provide loan on low interest rate. So that the investors arrange the finance easily.
Department Of Commerce IUB51
“AL-KHALIQUE” CNG Filling Station Project Appraisal
CONCLUSION:
The project is technically and financially sounds with ample market justification. The sponsors are experienced businessmen and enjoy high credit worthiness. Based on this analysis it may be conducted that the project is financially and economically viable and suitable proposition for DEMAND\LEASE FINANCING BY THE BANK.
The business of the company will flourish in the future because now-a-days CNG has a high demand. We have good expectations from our Project.
OGRA (oil and gas regulatory authority ) also giving same type of facility when new CNG station is started banks also provide loan with low interest rate. And machine is also imported easily. So this is concluded that this type of business is profitable business.
Department Of Commerce IUB52
“AL-KHALIQUE” CNG Filling Station Project Appraisal
Department Of Commerce IUB53