This means that the ELRTS would be recognized a semi-government project and would have a possibility of receiving foreign official loan with a low interest.
11.4.2 Financial Alternatives
(l) Alternatives without Financial Expenditure
Basic project performance has been evaluated without financial expenditure in these cases. Three cases were assumed;
Case 1: where the project is entirely built and operated by State Government as public works.
Case 2 : where the project is entire invested and operated by a private company without any financial expense. Difference between case 1 and 2 is to disburse the depreciation and income tax in case 2.
Case 3: where the State Government funding 25% of project costs and concessionaire invest remaining costs as his own equity.
(2) Alternatives with Financial Expenditure
Case 4: where the State Government funding 25% of project costs and concessionaire invests 25% of remaining costs by his equity and raises 75% of remaining costs in his debt.
Five option of the rate of interest on debt, 1%,2%,3%,4% and 5% and two repayment periods, 30 years and 40 years both with 10 years deferred period are examined for this case.
11.5 Internal Rate of Return
Given the cost and revenue estimates, the financial internal rate of return (IRR) for the Phase 1 of ELRTS has been worked out on discounted cash flow basis for without and with financial expenditure cases. The result are presented in Table 11.5-1 and 11.5-2.
The detailed calculations are in Appendices 11.5-1 to 11.5-4.
