The Nataraja Foundation
                     www.nataraja.org.in                                      The Indian Primary &...
bringing in innovative ideas on the finance side and we have been able to find innovative ways to raise approximately US $...
Analyst Note :

This model is provided for the information of Educationists, Indian Government Officials , Corporates , Fi...
Project Design Basis / Education Philosophy
The Nataraja Foundation
www.nataraja.org.in



                               ...
EDUCATION MEGAPROJECT - OVERALL CAPEX / OPEX SNAPSHOT OF PPP SCHEME
Cash Requirements Summary
                            ...
2025        2026        2027        2028        2029        2030        2031        2032        2033        2034        20...
TERM SHEET
Assumptions On Financing / Sources Of Funds :
                                                                 ...
US $ / Rs Exchange Rate ( 18th march 2010 )                                           45.49

Sl. No.   Source Description ...
Assumptions On Financing / Sources Of Funds :
US $ / Rs Exchange Rate ( 18th march 2010 )                                 ...
Sl. No.   Source Description                                       Estimate of Total         Notional Amount           % O...
Pg 1 0f 4



              Remarks / Critical Assumptions




If net / delta addition to GDP is US $ 20 Billion each year
...
Pg 2 Of 4




              Remarks / Critical Assumptions



Given that India is going to be the largest growing market i...
Pg 3 Of 4



               Remarks / Critical Assumptions




It is being assumed that revenues from the Teaching Content...
Remarks / Critical Assumptions




The Education Megaproject has not included Foreign
Exchange Reserves in its sources in ...
The Indian Primary & Secondary Education Mega
                                         Project
    The Nataraja Foundation...
The Indian Primary & Secondary Education Mega
                                           Project
                         ...
INSTITUTIONAL STRUCTURES , LAND BANKS AND
   URBAN EQUITY WITHDRAWL & MISC ISSUES
                                        ...
Governance : Project & Operations Phase

There are huge cashflows involved in both the project execution and operations ph...
Stand Alone ( Day School ) Facility With 300 Children X 2 Shifts, Full Time 51                                            ...
Stand Alone Residential Facility With 600 Children ( Residents )+ 200 Children as Day Scholars                            ...
The Nataraja Foundation
                     www.nataraja.org.in


Economics Of The Teacher Sharing Programme :
It is felt...
Each Small Vehicle Does 75 Km / Day on Average and Each Bus / Minibus travels 50 Km / Day
Cost of Diesel @ Rs 40 / Litre. ...
Architect : RL Kumar   (
                                                                   Bangalore )


during their wor...
50 Km / Day
al pricing economics constrain upward price view.
The Indian Primary And Secondary Education Megaproject Excel Motherfile
The Indian Primary And Secondary Education Megaproject Excel Motherfile
The Indian Primary And Secondary Education Megaproject Excel Motherfile
The Indian Primary And Secondary Education Megaproject Excel Motherfile
The Indian Primary And Secondary Education Megaproject Excel Motherfile
The Indian Primary And Secondary Education Megaproject Excel Motherfile
The Indian Primary And Secondary Education Megaproject Excel Motherfile
The Indian Primary And Secondary Education Megaproject Excel Motherfile
The Indian Primary And Secondary Education Megaproject Excel Motherfile
The Indian Primary And Secondary Education Megaproject Excel Motherfile
The Indian Primary And Secondary Education Megaproject Excel Motherfile
The Indian Primary And Secondary Education Megaproject Excel Motherfile
The Indian Primary And Secondary Education Megaproject Excel Motherfile
The Indian Primary And Secondary Education Megaproject Excel Motherfile
The Indian Primary And Secondary Education Megaproject Excel Motherfile
The Indian Primary And Secondary Education Megaproject Excel Motherfile
The Indian Primary And Secondary Education Megaproject Excel Motherfile
The Indian Primary And Secondary Education Megaproject Excel Motherfile
The Indian Primary And Secondary Education Megaproject Excel Motherfile
The Indian Primary And Secondary Education Megaproject Excel Motherfile
The Indian Primary And Secondary Education Megaproject Excel Motherfile
The Indian Primary And Secondary Education Megaproject Excel Motherfile
The Indian Primary And Secondary Education Megaproject Excel Motherfile
The Indian Primary And Secondary Education Megaproject Excel Motherfile
The Indian Primary And Secondary Education Megaproject Excel Motherfile
The Indian Primary And Secondary Education Megaproject Excel Motherfile
The Indian Primary And Secondary Education Megaproject Excel Motherfile
The Indian Primary And Secondary Education Megaproject Excel Motherfile
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The Indian Primary And Secondary Education Megaproject Excel Motherfile

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This is the Excel ( Motherfile ) which contains all project calculations, details on financing sources and project structuring concepts for India's largest education project. It is the worlds largest and most sophisticated education project based on innovative financing.

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Transcript of "The Indian Primary And Secondary Education Megaproject Excel Motherfile"

  1. 1. The Nataraja Foundation www.nataraja.org.in The Indian Primary & Secondary Education Megaproject 27 th March ' 2010 This Excel workbook deals mainly with the financial structures, cost estimates and detailed financials of the Education Megaproject. Project Concepts and Objectives The actual project, the thinking behind it, it's design criteria etc have been covered in detail in the project concept document which is available The Indian Primary & Secondary Education Megaproject for free download from the Nataraja Foundation's website www.nataraja.org.in Over the last 30 years India has spent very little money on building new schools . The focus has instead been on getting quick results through projects that involved the least possible expenditure. So few new schools were built even though India's population grew from from approx. 846 million in 1991 to almost 1.15 Billion people in 2009. In the schools that were built, the quality of infrastructure is very poor. Planning commission data clearly shows that 44 % of schools at the primary level do not have toilets for instance and 15 % do not have drinking water . Planning Commission data also reveals that nearly 45 % of Creating a lifestyle around the teaching the SC / ST children drop out of school by class V and by class XIII in excess of 60 % drop out of school. Various studies profession conducted by government of India as well as foreign agencies are showing that the percentage ( % ) of " Out Of School Children " is falling but no one is talking about the third rate quality of the schools that the children are being enrolled in and Low cost yet very elegant housing for the abysymal working conditions of the teachers who teach there. teachers under the programme. As a result of all this, in 6 - 8 years time , over 100 Million children will exit the school going age group without any This particular house was built at a cost of employable skills. This is going to create huge social problems in the country. Rs 750 / Sq Ft in 2007 in the Vernacular Architectural Style. Obviously something has gone terribly wrong with our entire approach to education and we need a robust strategy to solve the problems in our education system. Location : Bangalore Architect : RL Kumar Therefore ... www.vernarch.com Central to the thinking behind this project is the belief that the main reason for the steep decline in the quality of human resources in India has been the neglect of the teaching profession and teachers over the last several decades. In India today a crane operator with 5 years of experience makes more money than an MA in Economics or a MSC in Maths or a teacher with a proper BEd degree and with 10 years of teaching experience at the primary school level. This has warped the economic choices that a fresh graduate makes and has resulted in the least qualified individuals handling the most important of all the jobs in this country (The teaching of our children and tomorrows citizens ). This project takes note of the fact that India reached the height of its glory when the teacher was at the head of our society and therefore seeks to bring back this long lost Indian tradition through an innovative mechanism on a truly massive scale. The project is focused on providing a sound basic education as it is more important to have a sound education at the primary and secondary levels for a majority of our people than to spend billions of dollars on higher education and have most of those people going abroad. The whole project therefore is designed around the primary & secondary school teacher ( Project is not centered on the student ) with a view to creating a simple yet elegant lifestyle around the teaching profession so as to attract the best minds towards a career in teaching and thereby correcting a macro imbalance in our society. While doing this , the project also reaches more under privileged children than any other past or currently planned programme of the Govt. Of India. This Excel workbook concentrates on the financials of the project. For a detailed understanding of the various issues, readers are requested to go through the Project concept document which describes the project is proper detail. Project Scale : The project seeks to build a total of 30,000 New schools (with 600 students per school ) under the Public Private Partnership ( PPP ) format during the period 2012 - 2023. Each school under the programme will share teaching resources ( Teachers , Teaching aids etc ) with 14 other village schools in it's surrounding area so that a total of 420,000 additional schools are covered under the programme . The main problem then is money and since the government does not have adequate conventional resources , Innovative financing mechanisms needed to be found to finance this large education project. The project has therefore focused on bringing in innovative ideas on the finance side and we have been able to find innovative ways to raise approximately US $ 131.38 Billion as one time Capital expenditure to build the schools and US $ 42.57 Billion as yearly operational expenditure to run the 30,000 new school system as well as it's huge teacher sharing programme that will reach an additional 108 Million children in 420,000 assisted schools. As a result , once fully commissioned in 2023, a total of upto 126 Million children will receive high quality education totally free of cost .
  2. 2. bringing in innovative ideas on the finance side and we have been able to find innovative ways to raise approximately US $ 131.38 Billion as one time Capital expenditure to build the schools and US $ 42.57 Billion as yearly operational expenditure to run the 30,000 new school system as well as it's huge teacher sharing programme that will reach an additional 108 Million children in 420,000 assisted schools. As a result , once fully commissioned in 2023, a total of upto 126 Million children will receive high quality education totally free of cost . Phase Number of Hub Schools Number Of Assisted Schools Commissioning Schedule ( Teacher Sharing Programme ) Bootstrap I - - Q1- Q4 2011 250 New Teacher Training Institutes to train 300 teachers Phase II each per year + 60 New Centers of Bootstrap II - - Q1- Q4 2012 Repeat Phase I Vernacular Archiecture to train 300 Master Masons Each every year Phase I 6000 Hub Schools 84,000 2012 – 2014 Phase II 9000 Hub Schools 220,000 2015 – 2017 Phase III 15000 Hub Schools 420,000 2018 – 2023 Phase IV Possible repeat of total project ( another 30,000 schools ) 2023 – 2029 to cover 4,20,000 additional schools Project Schedule To be Extremely _____________________________________________________________________________________ Aggressive 30,000 New Schools to be commissioned by 2023 _____________________________________________________________________________________ Notes : 1. Each Of Bootstrapping stages I & II will consist of 250 Teacher Training Institutes to train 300 teachers each per year + 60 Centers of Vernacular Archiecture to train 300 Master Masons each year. Bootstrap II will be a repeat of Bootstrap I 2. It is not possible to execute Phase I of this project faster as India currently does not have enough trained teachers who possess the necessary capability / sensitivity to train young minds. This problem will be overcome by 2016 after which project execution velocity will pick up. 3. Phase IV could essentially be a repeat order which will repeat phases I, II and III in half the time. It will be possible to dramatically crash commissioning schedules due to retained learning within the project enterprise. 4. Each day school will operate in two shifts to maximize coverage while keeping costs low. Economic & Environmental Impacts of the Project : The following are the main economic and environmental features of the project which seeks to use Traditional yet very elegant Indian Architecture ( where building life is over 100 years ) without any significant maintenance : 1. This will be the worlds largest , multi-location environmental project as it will use 80 % traditional earth based material and very little cement and steel in the construction of the 30,000 schools. The C02 / Green house gas addition by this project will therefore be virtually zero. It will thus allow huge development without adverse environmental impacts. 2. Project will in addition lead to the planting of around 150 Million trees all over India between 2012 and 2023. 3. While the project will lead to a direct expenditure of US $ 131.38 Billion Billion over the period ( 2012 - 2023 ) on the creation of the low cost , yet extremely elegant school campuses, It will provide huge additional employment opportunities to millions of Indians . The total money multiplier effect on the economy will be in the range of 3 ( conservative ) to yield a total GDP Net delta addition of US $ 300 Billion from the construction of this project alone. The high quality Human Resourses that will be created by building schools designed around the teaching profession will be additional. Prepared By Ashish Puntambekar Project Designer , The Nataraja Foundation (00-91-9867612368) ashish.puntambekar@gmail.com Analyst Note : This model is provided for the information of Educationists, Indian Government Officials , Corporates , Financial Institutions and NGO's and must be seen in conjunction with the project / business spreadsheets prepared for both the stand alone day schools and residential schools as well as the optimised chain that comprimises the megaproject. The Project has been designed based on Information published by the Indian Planning Comission ( XIth Plan
  3. 3. Analyst Note : This model is provided for the information of Educationists, Indian Government Officials , Corporates , Financial Institutions and NGO's and must be seen in conjunction with the project / business spreadsheets prepared for both the stand alone day schools and residential schools as well as the optimised chain that comprimises the megaproject. The Project has been designed based on Information published by the Indian Planning Comission ( XIth Plan documents ) as well as other published material on the National Knowledge Commission / Ministry of HRD websites. Published papers by experts on the Indian Education System have also been studied and means to overcome the shortcomings pointed out by the experts have been incorporated in the project design. While these agencies have not been a party to the conception of this project plan, the author would like to thank his sources for making this plan possible through their data.
  4. 4. Project Design Basis / Education Philosophy The Nataraja Foundation www.nataraja.org.in " Let the watchword be acceptance and not exclusion " Sufi Saint Kabir Guru Nanak Dev A project of this size and scale will be a dead and soul-less agglomeration of buildings and computer networks without a sound philosophy which is timeless and yet extremely advanced and which seeks, as it were , to bind people of diverse faiths and lead them towards the realization of their potential as human beings . The following words of Vivekananda will therefore serve as a Pole Star for future Indian thinkers on education “ Let the watchword be acceptance and not exclusion. Not only toleration , for so called toleration is blasphemy. Toleration Mother Teresa means that I think you are wrong and I am just allowing you to live. Is it not blasphemy to think that you and I are allowing others to live ? I accept all Rabindranath Tagore & Gandhiji religions that were in the past and worship them all. I worship God with everyone of them, in whatever form they worship him”. Vivekanand Continues … “ I shall go to the mosque of the Mohammedan ; I shall enter the Christian’s church and kneel before the crucifix. I shall enter the Buddhist temple where I shall take refuge in Buddha and in his law. I shall go into the forest and sit down in meditation with the Hindu, who is trying to see the light which enlightens the Dr. APJ Abdul Kalam in Class heart of everyone. Not only shall I do all these things but I shall keep my heart open for all that may come in the future . Is Gods book finished ? Or is it still a continuous revelation going on. It is a marvelous book – these spiritual revelations of the world . The Bible , The Vedas , The Koran and all other sacred books are but so many pages and an infinite number of pages remain to be unfolded ”. Please Click Here To Access The Full Copy of the Project Design Basis / The Importance Project PhilosophyIn The Indian Tradition Of The Teacher Document Gurur Brahma, Gurur Vishnu, Gurur Devo Mahesh Varah. Guru Shakshat Para Brahma, Tasmai Shri Guruve Namah. The teacher is Lord Brahma as he generates knowledge within us. He is like Lord Vishnu as he sustains us and guides us on the right path. He is like Lord Mahesha (Shiva) as he destroys ignorance and thereby enlightens us. My Salutation to such a Guru, who is verily the Supreme God. Note : The Project Design Basis / Education Philosophy can also be downloaded from the following website : www.nataraja.org.in
  5. 5. EDUCATION MEGAPROJECT - OVERALL CAPEX / OPEX SNAPSHOT OF PPP SCHEME Cash Requirements Summary Bootstrap 1 Bootstrap 2 US $ / Rs Exchange Rate ( 18th march ' 2010 ) 45.49 Phase I Phase II Phase III Item 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Teachers Training Institutes ( Lot @ Rs 8 Crores Capex & 250 250 Rs 4 Crores Opex for each per year ) Pilot Projects ( Schools in 28 States + 7 Union Territories) … Assumed that 100 35 35 Assumed that In Actual Project 85 % day schools and 15 % Residential Schools % of Pilot Cost Construction 60 % Cost is borne borne in the same in the 1st year and 40 % in the year second year Masons Training Institutes ( Lot & Rs 5 Crore Capex and Rs 60 60 The Nataraja Foundation 2 Crore Opex for each / year ) www.nataraja.org.in Day Schools Nos Of 850 2125 2125 2550 2550 2550 3187 3187 3187 3187 Commissioning Sequence ( For Initiating Opex ) Institutions 850 2125 2125 2550 2550 2550 3187 3187 3187 3189 Cumulative commissioned 850 2975 5100 7650 10200 12750 15937 19124 22311 25500 Residential Schools 150 375 375 450 450 450 563 563 563 563 Commissioning Sequence ( For Initiating Opex ) 150 375 375 450 450 450 563 563 563 561 Cumulative commissioned 150 525 900 1350 1800 2250 2813 3376 3939 4500 Total Schools Construction Started Each Year 1000 2500 2500 3000 3000 3000 3750 3750 3750 3750 Commissioning Sequence ( For Initiating Opex ) 1000 2500 2500 3000 3000 3000 3750 3750 3750 3750 Cumulative commissioned 1000 3500 6000 9000 12000 15000 18750 22500 26250 30000 Costs Of Teacher Sharing Programme Costs Of Teachers Guest houses ( A total of 4,20,000 14000 35000 35000 42000 42000 42000 52500 52500 52500 52500 Guesthouses will be built under the teacher sharing programme ) Fuel Costs Of teacher sharing programme : Rs 11.56 115.6 404.6 693.6 1040.4 1387.2 1734 2167.5 2601 3034.5 3468 3468 Lakhs / School / Year to cover 14 assisted schools 0.12 Opex To Be added IT System for Existing Schools … ( % Complete ) 20% 40% 40% Capex & Opex to be be added depending on system Total Cost Of System with alerts @ Rs 500 Crores : 500 100 200 200 needs and the extent to which the teacher sharing programme is implemented. Taken as US $ 5 Billion IT System for Megaproject Schools … ( % Complete ) over 10 years ( IT Infra ) ( Launching of 12 Satellites + Using 4,00,000 Km of Existing 0 0 0 758 1895 1895 2275 2275 2275 2843 2843 2843 2843 0 Fibre Optic Across 30,000 Hub School and 420,000 Assisted Costs of Schools Via VSATS ) Essential Items in Crores % Completion 30% 70% 100% Forming and Staffing Of the ISIC with Average Salary @ Rs 450 135 315 450 450 450 450 450 450 450 450 450 450 450 450 20 Lakh / Year = Rs 450 Crores ( Fully Staffed as below ) ( 50 Senior Educationists , 300 Finance Professionals, 1200 Project Engineers, 300 IT Professionals, 100 Lawyers, 300 Architects ) Opex Cost of Teacher Training Institutes 1000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 Opex Costs of Masons Training Institutes 120 240 240 240 240 240 240 240 240 240 240 240 240 240 Development Of Vernacular Languages + Urdu+ Hindi + Sanskrit 933 2333 2333 2800 2800 2800 3500 3500 3500 3500 Capital Expenditure Rs.( Thousands Of Crores ) 3.00 13.319 32.371 45.273 54.405 57.813 59.153 66.824 71.938 73.949 73.949 35.610 10.051 ( US $ Billion ) 0.66 2.93 7.12 9.95 11.96 12.71 13.00 14.69 15.81 16.26 16.26 7.83 2.21 Total Capital Expenditure ( Rs Crores ) 597651 Total Capital Expenditure ( US $ Billion ) 131.38 Operational Expenditure ( Rs. Crores ) 1476.84 2998.68 3133.68 9565.31 25551.05 41396.80 60458.36 79473.25 98488.14 122327.60 146097.05 169866.51 193632.60 193632.60 ( US $ Billion ) 0.32 0.66 0.69 2.10 5.62 9.10 13.29 17.47 21.65 26.89 32.12 37.34 42.57 42.57 Sanskrit is possibly the worlds oldest language and it is dying in India. The Education Megaproject therefore allocates Rs 8000 Crores over 10 years to the promotion of Sanskrit in schools and for the digitizing of Sanskrit content as Sanskrit serves as the basis for several Indian and even international languages. This will reverse the huge neglect it has suffered neglect over the last 100 years . All other Indian Languages ( Tamil, Bengali, Marathi, Telugu, Gujarati, Kannada etc. ) including most importantly Urdu and Hindi together will receive an additional Rs 20,000 Crores over 10 years under the Megaproject for the development of digital content and opening of Institutions for scholars. Total Rs 28,000 Crores. Encouragement of local languages will allow the poorest citizen to participate fully in the economy. We want every farmer and labourer to have an equal opportunity and language should not be allowed to be a barrier due to lack of Funds. The Education Megaproject has a special large budget for Vernacular Language propogation.
  6. 6. 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 3468 3468 3468 3468 3468 3468 3468 3468 3468 3468 3468 3468 3468 3468 3468 3468 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 450 450 450 450 450 450 450 450 450 450 450 450 450 450 450 450 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 240 240 240 240 240 240 240 240 240 240 240 240 240 240 240 240 193632.60 193632.60 193632.60 193632.60 193632.60 193632.60 193632.60 193632.60 193632.60 193632.60 193632.60 193632.60 193632.60 193632.60 193632.60 193632.60 42.57 42.57 42.57 42.57 42.57 42.57 42.57 42.57 42.57 42.57 42.57 42.57 42.57 42.57 42.57 42.57
  7. 7. TERM SHEET Assumptions On Financing / Sources Of Funds : The Nataraja Foundation US $ / Rs Exchange Rate ( 18th march 2010 ) 45.49 www.nataraja.org.in Sl. No. Source Description Estimate of Total Notional Amount % Of Source Amount Available Cash Available Each Possible Corpus Potentially Available / Proposed For Each Year Year ( ( US $ Billion ) Year ( Education ( US $ Million ) Thousands of Crores ) US $ Billion ) Megaproject YEARLY FUND FLOWS / Annuities 1 Net Present Value Of Inceremental GDP 500 20 10% 2000 9098 Increase after GST implementation starting 1st April ' 2010 ( Delta Over Current ) . The Total Corpus in the next column is assumed and calculated over a 25 year period with a discount rate at 3 %. This cash flow will triple by 2025 when the size of the Indian economy is expected to be US $ 4.5 Trillion. 2 30 % of a proposed new tax on the services 510 5.1 30% 1530 6959.97 component in future Infrastructure projects. The base case estimate of the delta / net additional Infrastructure investment in India over the next 10 years is taken at US $ 1.7 Trillion ( Goldman sachs View ). This cash stream will triple by 2025 when the size of the Indian economy is expected to be US $ 4.5 Trillion. 3 Graduate Tax Collected From Employers In 10.11 2.53 80% 2022.42 9200 India. It is assumed here that there are 46 Million Graduates in India ( 2004 Estimate ). This number today is larger. This cash stream will double by 2025 when the size of the Indian economy is expected to be US $ 4.5 Trillion. Assumptions On Financing / Sources Of Funds :
  8. 8. US $ / Rs Exchange Rate ( 18th march 2010 ) 45.49 Sl. No. Source Description Estimate of Total Notional Amount % Of Source Amount Available Amount Available Each Possible Corpus Potentially Available / Proposed For Each Year Year ( ( US $ Billion ) Year ( Education ( US $ Million ) Thousands of Crores ) US $ Billion ) Megaproject 4 Quantized Tobin Tax on Forex Transactions. It 1.1 1.1 100% 1095 4981.16 has been assumed that the volume of daily average forex transactions in India and by companies doing business in India is of the order of US $ 15 Billion. A Tobin Tax ( First proposed by Nobel laureate James Tobin ) to be levied at the rate of 0.02 % on the total volume of the transaction which will be quantized as per the size of the transaction with higher rates applying to larger transactions to prevent speculation on the Indian Rupee as it moves towards Capital Account Convertability ). This cash stream will triple by 2025 when the size of the Indian economy is expected to be US $ 4.5 Trillion. 5 Yearly Rent From Re-developed PSU Land by 3.00 3.00 100% 3000 13647 the Indian Social Infrastructure Corporation ( ISIC ) Under The Urban Equity Withdrawl Programme ( Phase I ) . 6 Yearly Rent From Redeveloped PSU Land by 10.00 10.00 100% 10000 45490 the Indian Social Infrastructure Corporation ( ISIC ) Under The Urban Equity Withdrawl Programme ( Phase II ) .
  9. 9. Assumptions On Financing / Sources Of Funds : US $ / Rs Exchange Rate ( 18th march 2010 ) 45.49 Sl. No. Source Description Estimate of Total Notional Amount % Of Source Amount Available Amount Available Each Possible Corpus Potentially Available / Proposed For Each Year Year ( ( US $ Billion ) Year ( Education ( US $ Million ) Thousands of Crores ) US $ Billion ) Megaproject 7 Teacher / Content Outsourcing Business : The 21.04 10.52 40% 4207.52 19140 Education Megaproject will be employing approximately 1.74 Million Teachers across India on 5 year Rolling Contracts. It is proposed that the terms of the contracts be flexible enough to permit teachers to organize themselves into teams which could then, in an organized manner , produce education content for the world market. The revenue earned through this venture will be shared by teachers and the ISIC in the ratio 60:40 with the larger sum going to the participating teachers. They will also participate under the Aegis of the ISIC in a Teacher Exchange Programme with schools in foreign countries. For the purposes of this calculation the total teacher strength is assumed as 1.5 Million. It is further assumed that just 50 % of the teachers will participate in this venture and that each teacher's extra earning potential is Rs 5,50,000 each year. 8 Students on Fractional Vouchers / NRI Quota 5.10 5.10 100% 5103.80 23217.18 and SAARC / Foreign Students : A majority of the students within the Megaproject will be on Education Vouchers ( 60 - 70 % ). However some 37 % + of the students from middle class families and well off families will be on fractional vouchers with 2 / 3rd subsidy and an additional 2 - 3 % could be from SAARC countries or NRI / Foreign Students who will pay a premium ( Double The Voucher value ). ONE TIME FUND FLOWS - DIRECT FINANCE FOR CONSTRUCTION 9 Coordinated Equity Withdrawl By the ISIC on 40 40 100 40000 181960.00 PSU Owned Land in Metros and Large Cities 10 Un-Utilized Funds with various Ministries and 21.59 21.59 100 21590 98212.91 NGO's 11 Equity Infusion By Promoter groups for 25,500 6.74 6.74 100 6741.48 30666.98 Day Schools and 4500 Residential Schools 12 Committed and Un-Utilized Funds Lying with the 15.6 15.6 100 15600 70964.40 World bank and the Asian Development Bank, on which the government of India is paying Commitment Charges of over Rs 125 Crores each year. Assumptions On Financing / Sources Of Funds : ` US $ / Rs Exchange Rate ( 18th march 2010 ) 45.49
  10. 10. Sl. No. Source Description Estimate of Total Notional Amount % Of Source Amount Available Amount Available Each Possible Corpus Potentially Available / Proposed For Each Year Year ( ( US $ Billion ) Year ( Education ( US $ Million ) Thousands of Crores ) US $ Billion ) Megaproject OTHER POTENTIAL SOURCES OF FINANCE 13 In early March ' 2010 , India's Foreign Exchange 278 2.78 1% 2780 12646.22 Reserves stood at US $ 278 Billion. This is a huge sum and it has earlier been suggested by several others that a small part of the RBI's reserves should be used to finance Infrastructure projects in India. Schools represent essential social Infrastructure and the Education megaproject could draw on some of this resource. 14 Dis-investment in Indian Public Sector Entities 30 3 10% 3000 13647.00 and Banks. This represents a huge potential scorce of funds . However successive governments have been using dis-investment proceeds to help bridge the huge fiscal deficits that the government of India runs. In fact this money is best used to finance productive capital expenditure as in education projects that greatly enhance the country's GDP. If US $ 1.7 Trillion is to be invested in Infrastructure over the next 10 years, the first sector that will expand exponentially is banking. Government of India will do well to dis- invest it's stake in a few large banks to raise additional resources while at the same time allowing a greater private sector role in the banking industry , with strict controls in place of course.
  11. 11. Pg 1 0f 4 Remarks / Critical Assumptions If net / delta addition to GDP is US $ 20 Billion each year solely due to GST implementation, then government can afford to earmark 10 % of that Delta to an Education Mega Project from the Consolidated Fund Of India through a special legislation that creates " The Education Megaproject Fund ". It is being assumed here that the NCAER has taken a 25 year period for calculating the Net Present value at a 3 % discount rate. If they have taken a 15 year period instead , then the yearly sums that will be available will be much larger. A new tax proposal on the lines of the recently implemented tax on the services component of housing projects ( 2010 Budget ) will need to be implemented to extend service tax to the labour and services component of Infrastructure projects. This will very easily generate a new cash source for creating the human resources necessary to plan and build large Infrastructure in India. Right now there is a shortage of 30 million trained people in the construction Industry alone ( Mckinsey 2008 ). So the imposition of a service tax on the labour / skill component of Infrastructure projects is fully justified . It is being assumed here that 30 % of an Infrastructure Projects cost is services and Labour. It is also being assumed that servoce tax on the Labour and services component will be @ 10 %. Employers are being taxed because they are getting access to qualified graduates free of cost and have not paid a single paise for their education. This tax will be levied at the rate of 3 % on the Cost to Company ( CTC ) of the employee and will be paid not by the employee but the employer. Please note that the current education cess and professional taxes are separate taxes and are being borne by the employee. Companies must also pay a tax because they are getting trained manpower free of cost. We believe that companies will not be able to pass this tax on to employees as companies will also be competing with each others in a rapidly growing economy where skills shortages are acute. Also it has been realistically assumed that only 25 % of this tax is collectable from graduates as many work in the un-organized sector. Many housewifes are graduates too . If independent professionals such as doctors can be taxed, the collection will go up dramatically. Also it is assumed that 80 % of this tax will go for primary education as a person spends 80 % of his time in school.
  12. 12. Pg 2 Of 4 Remarks / Critical Assumptions Given that India is going to be the largest growing market in the world over the next few years we do not expect business to move away from India due to the imporition of this tax. The Imposition of this tax has been considered in the latest meeting of the G 20 nations in 2009 and It has also been supported for implementation by none other than our own RBI governor Dr. D SubbaRao in Dec ' 2009. Since 90 % of the worlds forex transactions are cleared in just a few financial centres globally , it will not be difficult to impose this tax which can provide much needed funds to Education and Healthcare projects in Rural India. Subsequent to the sale of 3000 Acres out of a total of 30,000 Acres of prime real estate in Indian Cities, The ISIC will publish a Global Tender Inviting leading Urban Developers from around the world to come to India to develop Large Real Estate Projects. 27,000 Acres of Urban, Government owned land will be put out on bids under a Public Private Partnership. Indian companies will participate in the bidding rounds and will compete with foreign companies. The bids will require project developers to pay an upfront annuity / yearly instalment of US $ 3 Billion for the 27,000 acres taken together over the first 10 years and submit plans for the development of Financial centres where the ISIC will be the owner of 50 % in each project. Developers will need to come up with ideas whereby the net earnings to the ISIC will be of the order of US $ 10 Billion each year from the 27,000 Acres of prime real estate starting from the 7th year after the Bidding. This effective Urban Equity Withdrawl plan will provide funds for rural development. Phase II cashflows will begin to accrue from year 7 onwards as the PPP projects in Urban Development begin yielding a return of US $ 10 Billion to the ISIC as explained under V above.
  13. 13. Pg 3 Of 4 Remarks / Critical Assumptions It is being assumed that revenues from the Teaching Content Development Business and the Overseas Teacher Exchange Programme will be shared by Teachers / ISIC in the ratio 60 :40, with 60 % of the revenues going to the teachers. We have therefore included only the balance 40 % of revenues as ISIC Income. Further , we do not believe that this activity will disturb teaching activity in the country as teachers have considerable amounts of free time and because the schools have been overstaffed by design not just for sharing teachers with 420,000 existing and deprived schools but also with this kind of revenue opportunity clearly in mind. Fees for Children will be quite affordable to parents as they well be charged at 1/ 3rd of the value of the voucher. In the case of Day schools fees will be in the range of Rs 25000 / child and in the case of fully residential schools, fees will be in the range of Rs 65,000 - Rs 75,000 which we believe are very affordable for the Middle Class and above. The procedure for this is explained in great detail in the project concept document under construction phase financing. This financing option has emerged through a study of the Comptroller & Auditor General's report ( CAG Report ) for 2007 - 08. A special audit committee will be constituted to trace and recover this money for the Education Megaproject. This money will come from the Promoters of 30,000 Schools over a 10 year period ( 2012 - 2022 ) This financing option has emerged through a study of the Comptroller & Auditor General's report ( CAG Report ) for 2007 - 08. Usually World Bank / ADB Loans are available for specific projects and cannot usually be re-assigned , We believe it will be possible to lift the entire corpus for this single Education Megaproject as the project subsumes within itself areas as diverse as Women and Child health and education to rural sanitation and rural roads etc. Pg 4 Of 4
  14. 14. Remarks / Critical Assumptions The Education Megaproject has not included Foreign Exchange Reserves in its sources in the current Rev 03 of the project. This represents a potential future source of finance. The Education Megaproject has not included Dis-investment proceeds in its sources in the current Rev 03 of the project. This therefore represents a potential future source of finance.
  15. 15. The Indian Primary & Secondary Education Mega Project The Nataraja Foundation Project Legal & Financial Structure www.nataraja.org.in Government Of India Ministry Of HRD Ministry Of Finance CONSTRUCTION PHASE ( 2012 – 2023 ) Parliament Ministry Of Disinvestment ( FUTURE SOURCE ) Consolidated Fund Of India Size Of The Indian Economy US $ 1.3 Trillion ( 2010 ) Exchange Rate ( 18th Mar ‘ 2010 ) : Financing Concept is similar to the 1 US $ = Rs 45.49 Golden Quadrangle / Highways Financing. 8 different sources of funds are routed to a special " Education Megaproject Fund " … A special Act of Parliament will enable this. INDIA BASED SOURCES OF FUNDS 1. Yearly Fund Flows Sovereign 10 % of New Goods & Services Tax ( GST ) US $ 2.0 Billion / Year Guarantee Receivables = US $ 2.0 Billion / Year US $ 6.64 Billion / Year US $ 6.64 Billion / Year INDIAN & INTERNATIONAL 30 % of Proposed New Tax on Service BANKS US $ 1.53 Billion / Year Component of Infrastructure Projects = US $ 1.53 Billion / Year Collected From Employers of Graduates US $ 2.02 Billion / Year Securitize 10 year annual Graduate Tax = US $ 2.02 Billion / Year Receivables at 6 % and Draw US $ 49 Billion Quantized Tobin Tax on US $ 1.09 Billion / Year Forex Transactions = US $ 1 .09 Billion/Year 2. One Time Fund Flows US $ 3 Billion Education Megaproject PSU Owned Metro / Large City Real Estate US $ 49 Billion For Capex Fund Act Equity Withdrawl = US $ 40 Billion Education Megaproject Fund Unutilized Funds ( US $ 21.59 Billion ) With Various Govt. Ministries and NGO’s US $ 67.15 Billion for Capex as per GAG Report 2007 -08 + US $ 3 Billion Annual Rent US $ 67.15 Billion Special Act Of Parliament to give Legal status to SPV and enable Sale Of Navratnas, PSU's , Banks = US $ 0.00 Future standby source Fast Track Execution based on US $ 0.00 Billion US $ 15.6 Billion Initial Sovereign Guarantees US $ 5.56 Billion For Capex 30,000 Private School Operators ( Equity Infusion ) Indian Social Infrastructure ( ISIC Act ) Corporation ( ISIC ) US $ 15.6 Billion Sovereign Guarantee Low cost Loans for Capex to Of Committed But For School Capex Loans School Concessionaires. This Un-Utilized is in addition to the US $ 15.6 Funds Billion that is paid as a bullet payment to the ISIC World ADB Bank Capacity To Raise / Spend US $ 134.75 Billion OR Rs 612,977 Crores Project Construction Cost = 131.38 Billion ( 30,000 Hub Schools + Infrastructure for Teachers Sharing Programme ) Financial plan therefore raises sufficient funds for construction
  16. 16. The Indian Primary & Secondary Education Mega Project Project Legal & Financial Structure The Nataraja Foundation www.nataraja.org.in Government Of India Ministry Of HRD Ministry Of Finance BOT OPERATIONS PHASE Parliament Ministry Of Disinvestment ( FUTURE SOURCE ) Consolidated Fund Of India Size Of The Indian Economy US $ 4.5 Trillion ( 2025 ) Exchange Rate ( 18th Mar ‘ 2010 ) : 1 US $ = Rs 45.49 Key Point to note is the size of the INDIA BASED SOURCES OF FUNDS Indian Economy in 2025 1. Yearly Fund Flows 10 % of New General Service Tax Based US $ 6.0 Billion / Year Students on Fractional GST Receivables = US $ 6.00 Billion / Year Vouchers US $ 4.88 Billion / Year and NRI / SAARC Quota US $ 17.86 Billion / 30 % of Proposed New Tax on Service US $ 4.59 Billion / Year Component of Infrastructure Projects Year = US $ 4.59 Billion / Year Teacher Outsourcing Business US $ 4.207 Billion / Graduate Tax = US $ 4.0 Billion / Year US $ 4.0 Billion / Year Collected From Employers of Graduates Year US $ 3.55 Billion Securitization Quantized Tobin Tax on Forex Transactions = US $ 3.27 Billion / Year Facility Pending Grant / Year US $ 3.27 Billion / Year US $ 10 Billion Yearly Rent From High FSI Re-Developed PSU Properties all over India = US $ 10 Billion Education Megaproject US $ 17.86 Billion For Fund Act Opex US $ 4.5 Billion US $ 12.64 Billion Service Tax Feedback For Opex Special Act Of Parliament to give Service Tax US $ 10.0 Billion Annual Rent Received Legal status to SPV and enable From Developer Partnerships Fast Track Execution based on @ 10 % Initial Sovereign Guarantees Education Megaproject Fund Capacity To Raise & Spend US $ 45 Billion / Year Indian Social Infrastructure ( ISIC Act ) Corporation ( ISIC ) US $ 45 Billion Revenue For Created Ecosystem Spend US $ 45 Billion On Primary & Secondary School Operations / year + PHASE II Expansion ( if Any ) through securitization of specific cashflows 18 Million Students On Education Vouchers 30,000 Private School Operators TEACH ( Including 108 Million Students Under Teacher Sharing Programme ) = 126 Million Children Service Providers Ecosystem
  17. 17. INSTITUTIONAL STRUCTURES , LAND BANKS AND URBAN EQUITY WITHDRAWL & MISC ISSUES The Indian Primary & Secondary Education Mega Project Government Of India The Nataraja Foundation Ministry Of Finance www.nataraja.org.in Ministry Of HRD Ministry Of Disinvestment ( FUTURE SOURCE ) Parliament ISIC Act 25 % Equity 75 % Equity Central "The Indian Social Infrastructure Corporation " 28 State Government sets up Governments 30,000 Acres The Primary & Secondary Education Megaproject SPV 900,000 Acres Of Land For Setting Up Schools Of Land all Over This 9,30,000 Acres , can be visualized approximately as a strip of Land 62 India Km by 60 Km. It is not much land for India taken as a whole. Out of this, with Land Bank of 9,30,000 Acres all over India 30,000 Acres can be easily spared / collected by the central government from PSU's and government organizations in Metros and B category Towns . The balance 9,00,000 Acres will be in Villages and towns in 28 States and 7 Union Territories all over India and will be given out on bids for setting up Schools and Hospitals. Land For Equity Deal Service Partners PPP Contracts The Indian Comptroller & Auditor General Commercial Land Bank : 30,000 Acres to be held in Land Bank . Upto 24 % of Cherry Picked land to be sold to Finance 40 % Primary & Secondary Education Of India to Monitor All ISIC Cashflows + All Capex of Primary & Secondary Education Project / Healthcare Megaproject . Balance 76 % land to Mega Project Sales & Lease Rentals Of ISIC Related Land be given on rent in towns and cities to large city developers so as to earn Cash to meet project ( Executive Board ) Under This Project. Operating Cash Requirements so as to subsidize Education and Healthcare provision to Low Income Groups. Note on PSU Land Based Urban Equity Withdrawl : 10 % of 30,000 Acres Cherry Picked If just 10 % of the land transferred in Metros and Large Towns to the ISIC from PSU's is Prime Real Estate in Big Issue Of initial capital (2015 - 2016). prime real estate it will be approximately 3,000 Acres ( all over India as the SPV in all will Cities and Important Towns to be sold to finance 40 % Stock : India Domestic & International Offering have 9,30,000 acres, of which 30,000 acres will be held in the Land Bank while 900,000 will of Project Capex. All such go for the school project & Healthcare project). This 10 % land will be worth approximately sales will be under a Of 500 Million Equity Shares or Rs 100 each 180,000 crores ( Approximate land cost in a Metro per acre has been taken as Rs 60 Crores Transperant bidding For a premium of @ Rs 400 Per Share to raise while actual prices range from Rs 400 Crores / Acre in Mumbai to Rs 2 Crores / Acre in a process and SPV land sold US $ 5.28 Billion as Equity will have an FSI ranging small town ). from 4 - 16 for creation of Financial Centers in Bonds : International Bond Offering Sufficient The land bank will make the SPV one of the highest net worth companies on the Indian Stock major Towns. Thereby For 3 Years of Project Construction : Exchanges. It will then be possible for the SPV to raise its own resources by selling land maximizing development of scarce land as also available Targeted Debt / Equity Ratio = 3 : 1 ( Through a competitive and transperant bidding process ) to developers or by issuing long funding for the project. term tax free bonds on par with RBI bonds. Central and state governments will take land from Bond Amount = US $ 15.85 Billion PSU 's and state government undertakings which are not utilizing the land optimally and Coupon rate = transfer it to the ISIC which is working towards a National Mission. The Chief Secrateries of Duration = 5 Years the 28 states will be on the board of the ISIC so each states interests will be fully protected. Addressing PSU Concerns To fully accomodate the commercial concerns of PSU and their government and private shareholders, they will get an enhanced FSI ( either on the same plot or on their other Balance 90 % land to be The US $ 15.85 Billion Bond issue will help finance any properties that are not being given away ) . For instance if a PSU is giving away prime real given on rent by ISIC to large developers from around the world ( including Indian shortfall in Capital Requirements. estate in Mumbai city which currently has an FSI of 2.66 , they will get an FSI of 3.50 in developers ) to another property in the same locality ( if they own two properties close to each other and are Provide Operating Cash giving away only one property) or an FSI of 5.0 in a less valuable location, in a manner that Project Land to Finance Education, Food and Clothing their commercial interest is protected. They could also be issued TDR's ( Transfer of 900,000 Acres in all to be and Hostel Facilities for needy students from allocated for Social Low Income Families ( This will however be Development Rights ) which they could trade on the market or they could receive cash for the just once source for OPEX ). Money to be Infrastructure Projects in enhanced FSI that accrues on the actual sale of their plots. So , If the Plot has been granted Education & Healthcare given directly by ISIC to the school operators an additional FSI of 8 , Cash equivalent of 5.5 FSI will go to the Social Infrastructure without any involvement of local government. Megaprojects and a cash equivalent of 2.5 FSI will be paid in cash or issued as TDR's to the All such payments and their use to be monitored by Comptoller & Auditor General PSU after the sale of land through a transperant bidding process to Indian or International Of India. consortia , thereby avoiding any litigation from shareholders. It must be understood however that increased FSI requires increased Infrastructure support in terms of city amenities and better municipal infrastructure. This needs to be incorporated into the city's development plan. The land transfers and sales however can proceed immediately and need not wait for the city development plans to be changed. Execute US $ 131.38 Billion Primary & Secondary Education Mega Project between 2012 - 2023 Bootstrap I Bootstrap II Phase I Phase II Phase III Q1 - Q4 2011 Q1 - Q4 2012 2012-2014 2015-2017 2018-2023 School Megaproject Enabling School Megaproject Enabling Total Schools 6000 Total Schools 9000 Total Schools 15000 Infrastructure Infrastructure Teachers Teachers Training Training Day Schools 5100 Day Schools 7650 Day Schools 12750 100 100 Schools Schools Residential 900 Residential 1350 Residential 2250 Master Masons * 30 Master Masons* 30 Schools Schools Schools Training Schools Training Schools * Master Masons to be trained in the * Master Masons to be trained in the Vernarcular Architecture Style Vernarcular Architecture Style Once trained , Master Masons and Teachers could organize themselves into Guilds ( Not Cooperatives ). The Masons Guilds could bid for contracts to build the schools / hospitals. Note on SPV Executive / Regulatory Powers : The BOO / BOT concession for the Primary & Secondary Schools will be given with all necessary clearences and professional affiliations in a single window. If a promoter group / concession awardee fails to meet certain transparant criteria ( specified in a 1 page rule book ), the concession will be terminated and offered to a new developer ... there will be no appeal to any court and the 1 page rulebook will be very clear on concession termination issues. Same structural vehicle / arrangement can be used to finance higher education. Governance : Project & Operations Phase There are huge cashflows involved in both the project execution and operations phases of the Indian Primary & Secondary Education Megaproject . The execution phase will involve the raising and expenditure of approximately US $ 131.38 Billion or Rs 597,651 crores between 2011 and 2023 and the operations phase will involve project revenues and rent allocations ( which will help approx. 126 million children to receive quality education free of cost ) of approximately US $ 42.57 Billion each year after 2023. The scale of cashflows needs to be monitored in a transparent manner and the Megaproject needs to be open to public audit. It is therefore an explicit requirement of the project that it be executed in a
  18. 18. Governance : Project & Operations Phase There are huge cashflows involved in both the project execution and operations phases of the Indian Primary & Secondary Education Megaproject . The execution phase will involve the raising and expenditure of approximately US $ 131.38 Billion or Rs 597,651 crores between 2011 and 2023 and the operations phase will involve project revenues and rent allocations ( which will help approx. 126 million children to receive quality education free of cost ) of approximately US $ 42.57 Billion each year after 2023. The scale of cashflows needs to be monitored in a transparent manner and the Megaproject needs to be open to public audit. It is therefore an explicit requirement of the project that it be executed in a corporate setup, outside the concerned ministries , under government of India and to implement a context based communications platform for project MIS. In fact , it is better not to execute this project , than to do it within a ministry or the existing education systems where information in-efficiencies and leakage of funds will undermine the very basis of the projects and lead to huge cost and time over-runs. The project needs therefore to be executed and operated in a corporate setup , under a Special Project Vehicle ( SPV ) set up under an act of Parliament ( The ISIC ) in the same manner as organizations such as IOC, ONGC, NHAI , IIFC and UTI were set up. The chief secretary’s of all states , The Chairman of the National Knowledge Commission, The Secretary , Ministry of HRD, the Deputy Chairman of the Planning Commission, The Minister of HRD will be members of the board. The responsibility for audit of the organization will vest with the Auditor General of India. The Masons guilds are a very important part of this project as they will generate huge employment opportunities in rural india. As envisaged however , the guilds will essentially be self governing and market forces. will decide their profitability. Government or local political control on these cooperatives will kill these guilds and therefore it is essential to protect their interests only through broad , non- interfering regulation. The guilds must therefore never be turned into cooperatives which breed corruption and in-efficiency.
  19. 19. Stand Alone ( Day School ) Facility With 300 Children X 2 Shifts, Full Time 51 www.nataraja.org.in Teachers + 7 Visiting Faculty Zero Drop out rate is being assumed IMPORTANT NOTE ON OPERATING FINANCIALS OF THE SCHOOLS: Floor Space Required ( Class due to superior teaching inputs … Room + Hostel ) in Sq Ft @ Fractional Vouchers in Day schools Project will rely less on pull factors such will provide 2/3 subsidy. Rs 850 / Sq Ft … This includes This project works because the Education SPV provides for the total costs of education for 18 as Mid Day Meal Schemethe Hub Schools) . Theconstruction & Furniture Million Children ( In & More on Vouchers also include the cost of the teacher sharing programme which reaches another For ease of calculations students 108 Million Children who are attopresent covered byrequired Better and Inspiring Teachers keep students in school. the Sarva Shiksha Abhiyan ( SSA ). A total of 126 Million Children are are added in on fractional vouchers therefore covered with the best teaching resources possible. the end. This spreadsheet Looks exclusively at the financial viability of the schools from the point of view of private developers / Consortia who will be investing just Rs 0.88 Crore equity each and raising the balance of their 60 % share as Interest free debt during the construction period from the World Bank / Asian Development Bank . Here again Government of India will back this debt with a revolving $ 10 Billion sovereign loan guarantee and take on the cost of the debt during the construction period. After the construction is complete, the World Bank / Asian Development Bank will be replaced in the financial structure by a commercial bank and the debt will carry a normal market rate of interest . The project developer will pay back this loan and any interest that will be due. The ISIC raises all the money required through unique and innovative financing. Please read the project concept document for more details on financing
  20. 20. Stand Alone Residential Facility With 600 Children ( Residents )+ 200 Children as Day Scholars www.nataraja.org.in , 51 Full Time Teachers + 7 Visiting Faculty Zero Drop out rate is being assumed IMPORTANT NOTE ON OPERATING FINANCIALS OF THE SCHOOLS: due to superior teaching inputs … Floor Space Required ( Class System has sufficient inbuilt Project will rely less on pull factors such Room + Hostel ) in Sq Ft @ This project works because the Education capacity for de-bottlenecking. SPV provides for the total costs of educationfor Mid Day MealChildren&(More on Hub Schools) . Rs 850 / Sq Ft Furniture as 18 Million Scheme In the The construction & … This includes Vouchers also include the cost of the teacher sharing programme which reaches another 108 Million Children who to keep present covered by Better and Inspiring Teachers are at required students in school. the Sarva Shiksha Abhiyan ( SSA ). A total of 126 Million Children are therefore covered with the best teaching resources possible. This spreadsheet Looks exclusively at the financial viability of the schools from the point of view of private developers / Consortia who will be investing just Rs 1.75 Crore equity each and raising the balance of their 60 % share as Interest free debt during the construction period from the World Bank / Asian Development Bank . Here again Government of India will back this debt with a revolving $ 10 Billion sovereign loan guarantee and take on the cost of the debt during the construction period. After the construction is complete, the World Bank / Asian Development Bank will be replaced in the financial structure by a commercial bank and the debt will carry a normal market rate of interest . The project developer will pay back this loan and any interest that will be due. The ISIC raises all the money required through unique and innovative financing. Please read the project concept document for more details on financing
  21. 21. The Nataraja Foundation www.nataraja.org.in Economics Of The Teacher Sharing Programme : It is felt that teachers ( many of them women ) will need a place to rest and refresh themselves during their work in the villages. A guesthouse has therefore been created in the area close to each of the assisted schools. This will allow for further expansion of the programme. The guesthouses will also allow for overnight stay. Sample Teacher Guest houses 1. Teacher Guesthouses Cost : Rs 850 / Sq Ft A small teacher guesthouse will be constructed in the environs of each of the 14 assisted village school Teacher Guesthouse Costing : Cost Cost of 1200 Sq Ft guesthouse @ Rs 850 / Sq Ft 10.2 Land Development Cost @ 15 % of Guesthouse cost 1.53 Guesthouse Furnishing 2 Land Cost ( land given by government for free ) 0 Total Cost 13.73 Total Cost of 30000 X 14 Guesthouses ( 420,000 Guesthouses ) 57666 2. Vehicle / Fuel Costs For The Teacher Sharing Programme Type Of Vehicle Qty Of Distance Mileage Cost of Diesel Total Running Vehicle Travelled ( Rs / Litre ) Cost / Day / Day Large Buses 2 50 4 40 1000.00 Mini Vans 2 50 6 40 666.67 Jeeps 4 75 10 40 1200.00 Cars 4 75 12 40 1000.00 TOTAL COSTS Assumptions All assisted schools will be within a 50 Km radius of the hub school
  22. 22. Each Small Vehicle Does 75 Km / Day on Average and Each Bus / Minibus travels 50 Km / Day Cost of Diesel @ Rs 40 / Litre. Global petroleum markets are volatile and marginal pricing economics constrain upw Mileage Assumptions Km / Litre Of Diesel Bus 4 Mini Bus 6 Jeep 10 Car 12 Notes : 1. Driver & helper costs are included in staff costs 2. Teacher costs are included in the school costs and therefore not priced here.
  23. 23. Architect : RL Kumar ( Bangalore ) during their work in the villages. A l allow for further expansion of the Teacher Guest houses s 850 / Sq Ft 14 assisted village school Lakhs Lakhs Lakhs Crores Total Running Maintenance Total Total Operating Cost / Year of 250 Cost / Year / Maintenance Cost of Fleet Per Days Vehicle Cost Year 250000.00 30000 60000 310000.00 166666.67 25000 50000 216666.67 300000.00 10000 40000 340000.00 250000.00 10000 40000 290000.00 966666.67 190000 1156666.67
  24. 24. 50 Km / Day al pricing economics constrain upward price view.
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