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FACULTY OF ENGENEERING AND BUILT ENVIRONMENT

UNIVERSITI KEBANGSAAN MALAYSIA

SEMESTER I
SESI 2016/2017

SUBJECT: KKKA6743 URBAN TRANSPORTATION PLANNING AND OPERATION


ASSIGNMENT: TASK 5 Financial Analysis

NAME
SYAZA SYAHIRAH BINTI MEOR ZAINAL

No Matric
P86665

1. An 85 km urban highway is planned to be constructed to connect an


industrial area to a planned sea port. Estimated cost is RM 1,250 million and
the construction period is planned to be 2 years. The highway project will
reprivatize and the concession period is 10 years. The concession company
will finance RM 125 million of the total cost using its own source and 90% will
be financed by a local bank. Financing period is 10years and yearly
repayment is RM 265.625 million for 8 years after the construction period.
Maintenance cost is estimated to be RM 40 million a year and expected to be
increasing at 7% per annum. Toll collection is estimated to be RM
336millionsmillions a year and increasing at 9%per annum.
(a)Compute NPV cost and NPV income for the concession period. Use
8%discount rate.
(b)Compute Benefit Cost Ratio.
(c)Prepare computation table as in (a) with 54% discount rate and compute
Internal Rate of Return (IRR). (You can use cost stream method to calculate
IRR. In this case you dont have to compute NPV based on 54%discount rate).

Project cost
Duration
Cossesion peroid
Maintanance cost
First year toll
collection
Discound rate
Using Own Found
Repayment to
bank
Annual cost

1,250,000,
000
2
10
40,000,00
0
336,000,0
00
8
10
265.625
62500000
0

yea
rs
yea
rs
increa
se
increa
se

%per anum

% per anum

%
%
for

yea
rs

Yea
rs

Cost

Benefit

NPV Cost

NVP Benefit

Cost Stream

625,000,000.
00

625,000,000.
00

(625,000,00
0.00)

625,000,000.
00

578,703,703.
70

(625,000,00
0.00)

40,000,000.0
0

336,000,000

34,293,552.8
1

288,065,843.
62

296,000,000
.00

42,800,000.0
0

366,240,000.
00

33,976,019.9
2

290,733,119.
95

323,440,000
.00

45,796,000.0
0

399,201,600.
00

33,661,427.1
4

293,425,093.
28

353,405,600
.00

49,001,720.0
0

435,129,744.
00

33,349,747.2
6

296,141,992.
30

386,128,024
.00

52,431,840.4
0

474,291,420.
96

33,040,953.3
0

298,884,047.
78

421,859,580
.56

56,102,069.2
3

516,977,648.
85

32,735,018.5
5

301,651,492.
67

460,875,579
.62

60,029,214.0
7

563,505,637.
24

32,431,916.5
3

304,444,562.
04

503,476,423
.17

64,231,259.0
6

614,221,144.
59

32,131,621.0
0

307,263,493.
17

549,989,885
.54

Total

1,469,323,96
0.21

2,380,609,64
4.82

B/C ratio

1.620207462
IRR

(b)

(c)
Yea
rs
0

Cost

Benefit

Cost Stream

21.50%

625,000,000.00

(625,000,000.0
0)

625,000,000.00

(625,000,000.0
0)

40,000,000.00

42,800,000.00

366,240,000.0
0

323,440,000.0
0

45,796,000.00

399,201,600.0
0

353,405,600.0
0

49,001,720.00

435,129,744.0
0

386,128,024.0
0

52,431,840.40

474,291,420.9
6

421,859,580.5
6

56,102,069.23

516,977,648.8
5

460,875,579.6
2

60,029,214.07

563,505,637.2
4

503,476,423.1
7

64,231,259.06

614,221,144.5
9

549,989,885.5
4

Total

21.50%

336,000,000

296,000,000.0
0

2. An urban highway of 22 km long linking sub-urban area with the CBD will
be constructed. The cost of this project is estimated to be RM
950,000,000.00and project duration is 2 years. Estimated saving in vehicle
operating cost is 1,440,000 km-vehicle per day and saving in travel time is
about 30,400 man-hour per day. Average value of time is RM 13.50 per hour
and vehicle operating cost is about 20 sen per kilometer. Both savings are
forecasted to increase at the rate of 9% per annum. .Maintenance cost of the
road is estimated to be RM 3,000,000.00 per annulment will be increasing at
the rate of 10.5% per annum. The project will be financed using federal

government soft loan and repayment period is 12 years after the completion
of the project. Discounted rate is 8%.
(a) Compute NPV cost and NPV saving for the whole construction and
repayment period
(b) Compute Benefit Cost Ratio.
(c) Prepare computation table as in (a) with 30% discount rate and compute
Internal Rate of Return (IRR). (You can use cost stream method to calculate
IRR. In this case you dont have to compute NPV based on 30%discount rate).
(Assume a year is equal to 330 days and traffic flows are uniform throughout
the year).
Project cost
Duration
Vehicle operating

950,000,000
2
1,440,000

Travel time
Value time
Vehicle operating
Cost

30,400
13.50

Maintaining cost
Repayment
Discount Rate
Reduction in
operating cost
Reduction in travel
time
Total

0.20
3,000,000
12
10.5

years
per day
man-hour
per day
per hour
sen

Increase
Increase

% per
anum
% per
anum

years
%
Annual
Cost

475,000,000.0
0

698,400.00

Annual
total
collection

230,472,000.0
0

Benefit

NVP Cost

288000

9
10.
5

410400

(a)
yea
rs
0

Cost
475,000,000.

475,000,000

NVP Benefit

Cost Stream
(475,000,000

00

.00

.00)

475,000,000.
00

429,864,253
.39

(475,000,000
.00)

3,000,000.00

230,472,000
.00

2,456,952.1
5

188,752,892.
04

227,472,000.
00

3,315,000.00

251,214,480
.00

2,456,952.1
5

186,190,635.
58

247,899,480.
00

3,663,075.00

273,823,783
.20

2,456,952.1
5

183,663,160.
89

270,160,708.
20

4,047,697.88

298,467,923
.69

2,456,952.1
5

181,169,995.
81

294,420,225.
81

4,472,706.15

325,330,036
.82

2,456,952.1
5

178,710,674.
60

320,857,330.
67

4,942,340.30

354,609,740
.13

2,456,952.1
5

176,284,737.
84

349,667,399.
84

5,461,286.03

386,524,616
.75

2,456,952.1
5

173,891,732.
35

381,063,330.
72

6,034,721.06

421,311,832
.25

2,456,952.1
5

171,531,211.
10

415,277,111.
19

10

6,668,366.77

459,229,897
.16

2,456,952.1
5

169,202,733.
12

452,561,530.
38

11

7,368,545.28

500,560,587
.90

2,456,952.1
5

166,905,863.
44

493,192,042.
61

Total

929,433,774
.90

1,776,303,63
6.79

2
3

(b)

Total

929,433,77
4.90
B/C

1,776,303,63
6.79
1.911167514

IRR

25%

(c)
yea
rs

Cost

Benefit

Cost Stream

475,000,000.0
0

(475,000,000.
00)

475,000,000.0
0

(475,000,000.
00)

3,000,000.00

230,472,000.
00

227,472,000.
00

3,315,000.00

251,214,480.
00

247,899,480.
00

3,663,075.00

273,823,783.
20

270,160,708.
20

4,047,697.88

298,467,923.
69

294,420,225.
81

4,472,706.15

325,330,036.
82

320,857,330.
67

4,942,340.30

354,609,740.
13

349,667,399.
84

5,461,286.03

386,524,616.
75

381,063,330.
72

6,034,721.06

421,311,832.
25

415,277,111.
19

10

6,668,366.77

459,229,897.
16

452,561,530.
38

11

7,368,545.28

500,560,587.
90

493,192,042.
61

IRR

25%