Studies of IDRC Supported Research on Greywater in ... - inwrdam

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38 3.5.3 Environmental Benefits The environmental benefits form the project include reducing the risk <strong>of</strong> contaminating the ground water due to possible seepage <strong>of</strong> black water from the septic tanks. It is difficult to quantify the impact <strong>of</strong> the project on ground water resources as a result <strong>of</strong> utilizing 80-85% <strong>of</strong> the generated wastewater and preventing the cesspools system infiltrating to groundwater resources. Another environmental impact is the reduction <strong>of</strong> house flies and malaria incidences. 3.6 Cash Flow Analysis (Inflow and Outflow) The cash inflows are the direct benefit <strong>of</strong> the project in a form <strong>of</strong> delivering additional water to dwellers, producing more olives and crops and reducing the wasted water through a greywater treatment and irrigation system. This cash inflow will be calculated on annual basis for the financial analysis purpose. The cash outflows include the operational and maintenance cost <strong>of</strong> the system, in addition to the capital cost <strong>of</strong> the system at the beginning <strong>of</strong> the project. Direct labor, indirect labor and overhead cost were estimated and included in the project outflows. Two main financial indicators were calculated; the net benefits are estimated by subtracting the cash inflows from the cash outflows, and the benefit / cost ratio is derived by dividing the cash inflow over the cash outflow. Both indicators are used in the financial analysis. 3.7 Hypothesis and Assumption <strong>of</strong> Financial Evaluation The following assumptions were adopted for performing the financial analysis <strong>of</strong> the project: 1. In order to create a basis for comparing the inflow and outflow cashes during the assumed life span <strong>of</strong> the project, it was necessary to adopt the Net Present Value (NPV) concept. All the inflows and outflows cashes, which are presented as annual uniform series will be discounted to year (0) which is the (present) using an assumed discount rate. The discount rate is an expression about the public preferences for the use <strong>of</strong> money and involves different viewpoints about social objectives. The uniform series present worth factor formula was used for calculation:
39 P = A (1 + i) n - 1 i (1 + i) n Where: P: Present sum <strong>of</strong> money A: An end – <strong>of</strong> – period payment (cash inflow or outflow at the end <strong>of</strong> the year) i: Discount rate n: Number <strong>of</strong> discounted periods (life span <strong>of</strong> the project) 2. The discount rate was assumed to be 3% or 5% which reflects the opportunity cost <strong>of</strong> commercial loans in Jordan during the years 2005-2006 and the public preferences in using the money. 3. The project life span is assumed either to be 5 or 10 years, where the first year is the zero year (investment year) without being discounted. All the cash inflows and outflows starting the end <strong>of</strong> year one were discounted to the base year (year zero). 4. Four scenarios were considered to check the sensitivity <strong>of</strong> the project, these were: • Life span <strong>of</strong> 5 years with discount rate <strong>of</strong> 5% • Life span <strong>of</strong> 5 years with discount rate <strong>of</strong> 3% • Life span <strong>of</strong> 10 years with discount rate <strong>of</strong> 5% • Life span <strong>of</strong> 10 years with discount rate <strong>of</strong> 3% 5. The expected benefits and operational costs (cash inflows and outflows) will start at the end <strong>of</strong> first year. 6. There are no book value <strong>of</strong> infrastructure, machinery, and building at the end <strong>of</strong> project life cycle. (No salvage values). 7. Price escalation (effect <strong>of</strong> inflation) are not taken into consideration, what will happen to the cost (increase or decrease) are assumed to happen to the benefits with the same percentage. 3.8 Financial Evaluation This section contains a thorough assessment <strong>of</strong> the financial analysis. Net present value (NPV) <strong>of</strong> the investment (capital costs and operational costs) is calculated in fixed prices using discount rates <strong>of</strong> 5% and 3%; two periods were envisaged, 5 years and 10 years. The depreciated values <strong>of</strong> assets with lifetimes beyond the 5 and 10 years period are regarded as zero and will not be entered into the cash inflows at the end <strong>of</strong> project life span. The same concept <strong>of</strong> NPV was adopted for the revenues that were calculated using discount rates <strong>of</strong> 5% and 3%; two periods were envisaged, five years and ten years.
Page 3: Compilation of Gre
Page 6 and 7: 3.8 Financial Evaluation 39 3.9 Res
Page 8 and 9: 6 the house is collected at a point
Page 10 and 11: 8 Many organizations in Jordan, Pal
Page 12 and 13: 10 2. Report on Policy Options to I
Page 14 and 15: 12 The Water Strategy (1997) acknow
Page 16 and 17: 14 On the one hand, there are the g
Page 18 and 19: 16 • The Ministry of</str
Page 20 and 21: 18 2.3 Recent Experience in Greywat
Page 22 and 23: 20 2.3.5 Greywater Treatment and Us
Page 24 and 25: 22 the project which was implemente
Page 26 and 27: 24 2.6 Conclusions Treated wastewat
Page 28 and 29: 26 to conserve water and reduce was
Page 30 and 31: 28 3.3 Economic and Financial Analy
Page 32 and 33: 30 Family number No. of</st
Page 34 and 35: 32 Around 30% of t
Page 36 and 37: 34 Family number Capital cost Opera
Page 38 and 39: 36 Family number Increase in olive
Page 42 and 43: 40 The NPV of the
Page 44 and 45: 42 Family number NPV - Costs (5 yea
Page 46 and 47: 44 Family number NPV - Revenues (5
Page 48 and 49: 46 Family number Net benefits (5 yr
Page 50 and 51: 48 Table 3.8 shows the results <str
Page 52 and 53: 50 Family number B/C ratio (5 yrs,
Page 54 and 55: 52 4. Assessment of</strong
Page 56 and 57: 54 B. The economic and social condi
Page 58 and 59: 56 Table 4.3: Comparison between th
Page 60 and 61: 58 5.3 Definitions The following de
Page 62 and 63: 60 Characteristics Cadmium Calcium
Page 64 and 65: 62 organisms that are found in blac
Page 66 and 67: 64 Table 5.2: Guideline limits for
Page 68 and 69: 66 Parameters Abbreviation Unit All
Page 70 and 71: 68 • Time interview finished: rec
Page 72 and 73: 70 6.5 Economic Components 1. Estim
Page 74 and 75: 72 6.8 Side Effects of</str
Page 76 and 77: 74 7. If your answer to above quest
Page 78 and 79: 76 2. It is useful to see greywater
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