Guide to COST-BENEFIT ANALYSIS of investment projects - Ramiri

Table 4.40 Sources of finance (current prices) in the time horizon (thousand of Euros)Finance sources Total 1 2 3 4 – 19 20 21 – 30Public fundsInvestment financingEU grant 22,129 4,410 10,595 7,124 0 0 0National grant 19,029 1,258 10,164 7,607 0 0 0Municipal equity 10,263 1,700 4,495 4,068 0 0 0Total 51,421 7,368 25,254 18,799 0 0 0Private fundsInvestment and operation financingEquity 24,705 3,018 11,275 10,412 0 0 0Loan 24,705 3,018 11,275 10,412 0 0 0Total 49,410 6,036 22,550 20,824 0 0 0Replacement of short life components financingEquity 11,326 0 0 0 0 11,326 0Loan 11,326 0 0 0 0 11,326 0Total 22,652 0 0 0 0 22,652 0The additional running costs which are necessary to carry out the project services (the purification plant,the supply of water for industry and agriculture), include:- labour cost: fourteen skilled employees (at 38,000 €/person per year) and thirty-two non-skilledemployees (at 26,600 €/person per year) are assumed; an overall real growth rate of 0.4% per year 87 isassumed for the labour cost;- electricity costs: the pumping stations consume 0.017 kWh per cubic metre of water raised for the enduser, the plants consume 0.027 kWh per cubic metre of treated water. The electricity price is assumedto increase at an annual rate of 0.9% 88 ;- materials: the materials used by the plants have a yearly cost of €0.080 per cubic metre of treated water;the real growth rate of this price is 0.9% per year;- intermediate services and goods: the intermediate services and goods have a fixed part of the yearlycost of €1,299,000 and a variable part of €0.1 per cubic metre of treated water;- maintenance costs: the calculation of the maintenance costs was made on the basis of prices in thelocal market, or, when these were not available, on prices for the region or country. This yearly costhas been set at €715,000;- elimination of treatment sludge: the yearly cost is €0.093 per cubic metre of treated water; the marginalgrowth rate of this price is 0.5% per year.The revenue accrues, in the financial consolidated analysis, from the tariff receipts for the new servicesprovided, which are valued according to the respective tariffs applied to the metered volumes.In fact, using a consolidated financial analysis for the determination of project performances, ensures thatthe aforementioned fee paid by the Municipality to the private partner (the operator) is not considered inthis case. Indeed, the revenue for the operator corresponds to the cost borne by the owner, so that in theconsolidated analysis the two cancel each other out and do not affect the project’s net cash flows.8788Over the inflation rate.See note above.171