This document provides a cost benefit analysis for a project to improve food security and strengthen community-based disaster risk reduction in Chail Valley, Madyan Swat, Pakistan. The valley was badly damaged by floods in 2010, destroying homes, infrastructure, and land. The project uses bioengineering techniques like retaining walls and check dams to stabilize slopes and reduce water speeds. It costs 71.6 million rupees and will see benefits after 6 years as trees and plants mature to protect against future disasters. The payback period analysis shows this project will recover costs within 6 years through reduced risks of damage from floods and landslides.

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Report on: COST AND BENEFIT ANALYSIS
Project Title: Improving Food Security and Strengthening CB DRR in Chail Valley, Madyan Swat
1)Saif ur Rahman 2)Syed Sadiq Shah 3)Tarik Khan 4)Zahid Hussain

2. Cost & Benefit Analysis 2
Chail Valley, Madyan Swat:
Valley Swat is a unique, beautiful and glittering jewel created by Almighty that is an exact replica of the glorious Alps in Switzerland. Like the Alps several mighty and high mountain ranges surround this expansive and enthralling valley. The valley of Madyan is situated about 56 kilometers in the north of Mingawara (Mingora) city. It lies on the main road that leads to Behrain, Kalam and other beautiful valleys of Swat. The main road is in a dilapidated condition that manifests the inefficiency of highway authorities. Several fascinating and beautiful valleys e.g. Chail, Shanku and Bashigram surround the central merchandise valley of Madyan.These small valleys are located towards the eastern end of Madyan in the lush green mountains beside the main stream that flows from the snowy mountains of Bashigram and mingles with River Swat at Madyan. Background:
Chail valley, Madyan Swat was badly affected in 2010 flood. It is reported that the Chail valley of Swat was seriously damaged by a powerful flood in July 2010. The losses are estimated by organization who worked to overcome the miserably and difficulties of the said area. It is estimated that more than 200 acres of fertile land was washed away by streams and river. Over 374 houses were completely destroyed, more than a score of shops were drained by this harmful flood, 2 hotels were uprooted by the strong waves of the river a number of watermills were also destroyed. Small hydro power stations were taken away by the water, 7 bridges and the same numbers of schools were wrecked. The walls of 5 mosques fell down by the water. The casualties were 2 in numbers and 8 people were taken to the hospital for the necessary treatment.
Introduction:
A number of humanitarian based organization namely, Swiss agencies for Development and Cooperation and UN (United Nation) branch namely WFP (World Food Program) reached to the spot and started the

3. Cost & Benefit Analysis 3
rescue function. They provided relief to the people. It was uncertain to forecast, and the people were not aware of this sudden disaster and heavy flood. The two organizations made a survey. They decided how to get rid of food security and how to minimize the adverse effects of the disaster on long term basis, so the two organizations decided to start an advance project for a period of 6 months.
After gaining experience in the area, it followed a project how to improve food security to in power community based DDR which was implemented by Malteser International in Pakistan. The organization also works all over the world. The organization only worked in area development/ civil engineering. Local NGO’s had also some recognition and working and they got some achievement. ADMC (Area Development and Management Cooperation) visited the said area and decided to mitigate by using soil bio Engineering. Soil bioengineering is the use of living plant materials to provide some engineering function. Soil bioengineering is an effective tool for treatment of a variety of unstable and / or eroding sites. Soil bioengineering methods can be applied wherever the plants which are used as living building materials are able to grow well and develop. This is the case in tropical, subtropical and temperate zones whereas there are obvious limits in dry and cold regions, i.e. where arid, semi–arid and frost zones prevail. In exceptional cases, lack of water may be compensated for by watering or irrigation.

4. Cost & Benefit Analysis 4
Methodology: Cost benefit analysis, also referred to as “benefit cost analysis,” is a method of evaluation that estimates the value of projects to determine whether those projects are worth undertaking or continuing. At its most basic, cost benefit analysis, CBA could be a calculation that continuing production of a product or product option is no longer viable. At its most complexes, CBA can be used to take into account the benefits the company receives as well as the benefits that accrue to the community at large.
According to ADMC project briefing this is almost 71.6million rupees project. For such type of low cost project where you have a large, mountainous area, erratic soil sites, and with unskilled labor, moreover this was cash for work program. For such type of project, there are different methods for cost and benefit analysis, such as Payback method, Average rate of Return method, Net Present Value method, Internal Rate Return method etc. But as far as this project is concern we use payback method. Reason of using this method is that, this is bioengineering project, and shrubs and trees will take a lot of time to germinate or to become an adult tree. This is green energy concept (when we don’t disturb our natural environment), because trees’ roots will perform the adhesion phenomenon as cement perform in concrete structures, so the payback period in our project is almost six years (Ailanthus, Robinia, amlook, Walnut have average growth time six years). Hence we can get our benefits after five to eight years. That is why Payback method is used.

5. Cost & Benefit Analysis 5
Retaining Wall for Slope Stabilization. Check Dams in A gully.
Payback Method: The length of time required to recover the cost of an investment is known as time period or this is literally the amount of time required for the cash inflows from a capital investment project to equal the cash outflows.
Payback Period = Initial Payment / Annual Cash inflow
In our project payback is the time period, required for the plants and shrubs that they become strong enough to resist and sustain against the land slide and to reduce the speed of water in gullies. So as given above Payback Period is six year. Initial payment is the cost of the project. Whereas cash inflow is the revenue generated by our resources.
As payback period is 6 years and initial amount is Rs 71.6 million. Annual cash inflow is Rs 11.93 million. This means we have reduced the risks of cost Rs 10.23 million. We can say that shorter the payback period, the better the investment, under the payback method.

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Another problem is when you are comparing several proposals for example. Projects Years 1 2 3 4 5 6 0
(50)
(100)
(80)
(100)
(80)
(100) 1
5
50
40
40
30
5 2
10
30
20
35
30
25 3
15
20
20
20
20
30 4
20
10
20
20
10
30 5
5
20
10
5
10
40 6
-
10
10
10
40
50
Payback Period
4
3
3
4
3
5
Total After 6 Years
5
40
40
30
60
80
The payback period of project 2, 3 and 5 is three years, so they seem to be of equal merit.
However because there is time value constraint here, the four projects cannot be viewed as equivalent. Project 2 is better than3 because the revenue flows quicker in years one and two. Project 2 is also better than project 5 because of earlier flows and because the post-payback revenues are concentrated in the earlier part of that period. When we look at longer time period, the picture changes again: after 6 years projects 5 and 6 have the best yield, but although project 6 have best overall yield, you have to wait longest to get it.

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Conclusion:
From above example it is clear that shorter the payback period better the project is, so we can say that we should use such types of plants and trees which in shorter time can resist and sustain against the adverse effects of disaster whether it is earthquake or flood or landslides. Then we can measure the success ratio to our structure because structures are constructed in different soil condition. Some structures can resist and some can fail on the same intensity of disaster depending upon soil properties.
References: 1. Gray, D.H. and A.T. Leiser. 1982. Biotechnical Slope Protection and Erosion Control. Van Nostrand Reinhold Company Inc. Scarborough, Ontario, 271 pp. reprinted by Krieger Publishing Co. Malabar, Florida). 2. Clark, J. and J. Hellin. 1996. Bio-engineering for Effective Road Maintenance in the Caribbean. Natural Resources Institute. The University of Greenwich. United Kingdom. 3. http://smallbusiness.chron.com/advantages-disadvantages-cost-benefit-analysis-10676.html.
4. Schiechtl, H.M. and R. Stem. 1997. Water Bioengineering Techniques for Watercourse, Bank and Shoreline Protection. Trans. By L. Jaklitsch. Blackwell Scientific. Oxford, U.K. 185 pp.
5. Schiechtl, H.M. and R. Stem. 1996. Ground Bioengineering Techniques for Slope Protection and Erosion Control. Trans. By L. Jaklitsch. Blackwell Scientific. Oxford, U.K. 146 pp. Jump up 6. http://www.investopedia.com/terms/p/paybackperiod.asp 7. www.valleyswat.net/tourism 8. www.ianrpubs.unl.edu 9. http://www.rarexoticseeds.com 10. http://www.greenbeltconsulting.com 11. Mattia, C.; Bishetti, G. & Gentile, F. 2005, ‘Biotechnical characteristics of root systems of typical Mediterranean species’, Plant and Soil, vol. 278, no.1, pp. 23-32 12. Greenwood, J.; Norris, J. & Wint, J. 2004, ‘Assessing the contribution of vegetation to slope stability’, Proceedings of the Institution of Civil Engineers, vol. 157, no. 4, pp. 199-207. 13. MMU Cost Benefit Analysis toolkit(v 2)