Colombo katunayake expressway project

1. Colombo-Katunayake
Expressway Project
GROUP H - MPM7007 Management of Mega and Complex Project

2. Project
• Project Introduction
• Project Overview
• ProjectTime Line
• Financial Appraisal
• Economic Impact For the Project
• Conclusion
• Reference

3. Project Introduction
• PROJECTTYPE - New expressway
• LENGTH- 25.8km (16mi)
• CONSTRUCTION STARTE -August 2009
• OPENED -October 2013
• ESTIMATED INVESTMENT - $292milion
• DEVELOPER - SMEC Australia
• CLIENT- Road Development Authority (Sri Lanka)
• CONTRACTORS- Nem Construction, CML-MTD Construction

4. Project Overview
• The Colombo-Katunayake Expressway (CKE) connects Colombo and Katunayake in
Sri Lanka at a high-speed road link.It runs along 25.8 kilometers between the New
Kelani Bridge and Katunayake's International Airport. Construction of the
expressway began in August 2009 and was completed in October 2013. Along the
way, there are 42 bridges and 100 culverts.
• The new expressway makes it easier for rising traffic to get services and so helps to
minimize traffic congestion. It has also shaved 20 minutes off the travel time
between Colombo and Katunayake.The $292 million project was financed using a
$248.2 million loan from China's Export-Import Bank.The Sri Lankan government
contributed the remaining $45 million.

5. Key features of the Expressway included
• 4 interchanges at New Kelani Bridge, Peliyangoda, Ja-Ela and Katunayake
• 2 major bridges, a 70 m bridge at Ja-Ela and an 80 m bridge at Dandugam Oya
• 13 overbridges
• 6 underpasses
• 18 minor bridges
• Drainage structures

6. Contractors involved with Sri Lanka’s road
project
• The China Metallurgical GroupCorporation (MCC) executed the project as
per an agreement signed with the Government of Sri Lanka in August 2008.
• SMEC Australia provided design review, construction supervision and
infrastructure services for the project.
• CML-MTD Construction, a joint venture of CML Construction (formerly
known as Carsons Construction) and MTD Construction received a
subcontract for the construction of the expressway in 2010.The main
subcontractor for the project was Nem Construction.
• Engineering Consultant (ENGCL) was appointed as the project consultant
for the CKE project.

7. ProjectTime Line
• The Project Starting on August 2009 and was completed in October 2013
Segment 1
Peliyagoda to
Mabole
Segment 4
Liyanagemulla (o
Katunayake
Airport Junction
Segment 3
Kalaeliya to
Dandugam Oya
Segment 2
Mabole to
Kalaeliya
Start Completed
in August
2009
October
2013

8. Financial appraisal
Project evaluation steps
• forecast the project's predicted future cash flows
• Examine the risk involved in those cash flows.
• Construct alternate cash flow forecasts
• Evaluate the results' sensitivity to changes in the expected cash flows.
• Simulate the cash flows and provide different net present value estimations
for the project.
When the this highway projects selected inside the firm's current strategic
framework consistently produce negative NPVs throughout the analysis stage,
management should reconsider its strategic plan.

9. Financial Appraisal techniques

10. Payback Period
• The Payback Period shows how long it takes for a business to recoup an
investment.This type of analysis allows firms to compare alternative
investment opportunities and decide on a project that returns its
investment in the shortest time.

11. Accounting Rate of Return
• Accounting Rate of Return (ARR) is the average net income an asset is
expected to generate divided by its average capital cost, expressed as an
annual percentage.The ARR is a formula used to make capital budgeting
decisions. It is used in situations where companies are deciding on whether
or not to invest in an asset (a project

12. Net PresentValue (NPV)
• Net PresentValue (NPV) is the value of all future cash flows (positive and
negative) over the entire life of an investment discounted to the present.
NPV analysis is a form of intrinsic valuation and is used extensively across
finance and accounting for determining the value of a business, investment
security, capital project, new venture, cost reduction program, and anything
that involves cash flow.

13. Internal Rate of Return (IRR)
• The Internal Rate of Return (IRR) is the discount rate that makes the net
present value (NPV) of a project zero. In other words, it is the expected
compound annual rate of return that will be earned on a project or
investment.

14. Profitability index (PI)
• The profitability index (PI) is a measure of a project's or investment's
attractiveness.
• The PI is calculated by dividing the present value of future expected cash flows by
the initial investment amount in the project.
• A PI greater than 1.0 is deemed as a good investment, with higher values
corresponding to more attractive projects.
• Under capital constraints and mutually exclusive projects, only those with the
highest PIs should be undertaken.

15. Pay Period Calculation
Incremental cash
flow= Revenues −
Expenses − Initial
Cost
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Expenses
$
29,200.0
0
$
73,000.00
$
102,200.00
$
87,600.00
$
4,564.16
$
4,564.16
$
4,564.16
$
4,564.16
$
4,564.16
$
4,564.16
$
4,564.16
Revenues
$
-
$
-
$
-
$
-
$
-
$
46,720.00
$
58,400.00
$
73,000.00
$
75,920.00
$
81,760.00
$
84,680.00
Cash Flow
$
(29,200.0
0)
$
(73,000.00
)
$
(102,200.00)
$
(87,600.00)
$
(4,564.16)
$
42,155.84
$
53,835.84
$
68,435.84
$
71,355.84
$
77,195.84
$
80,115.84
Net Cash Flow
$
(29,200.0
0)
$
(102,200.0
0)
$
(204,400.00
)
$
(292,000.00
)
$
(296,564.16)
$
(254,408.32)
$
(200,572.48)
$
(132,136.64)
$
(60,780.80)
$
16,415.05
$
96,530.89

16. Net PresentValue
• Net PresentValue = $222,219,522.97

17. Impact Of the Project
The proposed 5 year colombo- katunayake expressway construction project which is target to
reduce travelling time between colombo and katunayake international airport in sri lanka.
Heconstruction industry has a profound economic, social and environmental impact. It affects
every member of society, influencing productivity and wellbeing at home and at work.
• Socio-Economic Impacts on Settlements
• Impact on Human Behavior
• Impact on Land Use
• Impact on Population and Employment
• The Impact on Air Quality
• The Impact on Noise levels
• The Impact due to accidents

18. End