Final Report - Asian Development Bank

TA 4721-PRC: Preparing the Shaanxi-Qinling Mountains Integrated Ecosystem Management Project
Final Report Appendix 13
Net Cash Flow without project 33.2 33.2 33.2 33.2 33.2 33.2 33.2 33.2
Net Cash Flow Before Income Tax with project -3529.9 -8992.4 -12151.2 -57.2 1809.7 2581.3 2917.5 3578.3
FIRR Before Income Tax 15.96%
FNPV Before Income Tax at 10% 18085.0
Income Tax 0.0 0.0 0.0 0.0 278.8 471.6 555.7 720.9
Net Cash Flow After Income Tax with project -3530 -8992 -12151 -57 1531 2110 2362 2857
FIRR After Income Tax 13.51%
FNPV After Income Tax at 10% with project 9605
54. The Financial viability was tested for movement in cost and revenues - see Table 14 - and
found to be robust under scenarios involving 20% movement of current projections. The proposed use
of commercial management will reduce the risks attached to the commercial operation of the SARC.
Table 14: Financial Analysis Sensitivity
Sensitive Analysis
Before Income Tax After Income Tax
FIRR NPV FIRR NPV
Operating Cost (10% up) 14.81% 15621.1 12.56% 7474
Operating Cost (20% up) 14.20% 13781.5 12.03% 5970
Operating Cost (30% up) 13.61% 11941.8 11.50% 4466
Revenue (10% down) 13.90% 12076.8 11.75% 4875
Revenue (20% down) 12.26% 6692.7 10.29% 773
Revenue (30% down) 10.46% 1308.6 8.70% -3329
55. The expansion and modernization of SARC to international standards with completion of
Phase I and Phase II will further strengthen and diversify the Shaanxi and Xi’an tourism base and will
provide a high quality tourism experience that, together with the Botanical Garden, the Louguantai
Forest Park and other ex-situ facilities, will encourage visitors to the Project Area to spend the whole
day there or to come back for a second day to the ex-situ sites. This will lengthen their stay and/or
increase their spending in the city and province.
56. Construction employment during the three-year construction period is estimated to be about
3,800 person years or nearly 1,300 construction jobs on a full time equivalent basis each year. The
expanded SARC site will as well increase the number of operating jobs provided to local people from
the current number of about 40 (including casual employees) to over 200 positions after construction
of both phases. This number will increase as the number of visitors and the SARC’s gross revenues
expand through the projection period. Based on data earlier provided by SARC on its personnel and
operating costs, the Team estimates that under the PPTA Team’s base case scenario, employment at
SARC after construction of both phases, including staff servicing tourists, employees caring for
animals and administrative staff, would likely be about 250 at start-up in 2011, and this number would
likely increase to over 400 by 2020 and to about 500 in 2030. The expanded and modernized SARC
facility will as well generate quite significant indirect or spin-off benefits through providing service and
supply contracts to local companies and other suppliers of goods and services.
57. Other benefits noted in the SARC FSR include: better care of and more healthy animals based
on the breeding bases, animal hospital, rescuing and quarantine facilities, and the expanded research
facilities and food/forage bases – leading through time to expansions in the population of rare Qinling
wildlife. Better animal care, training and research to promote controlled release to the wild or semiwild
(to be funded perhaps in part under the GEF program) could further add to the benefits from the
animal conservation work of SARC. This could be particularly important to Crested Ibis. The genetic
resources associated with these rare animals will be better protected and utilized at project
completion.
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