FOREST WATERFALL AS A TOURISM RESORT group member: Eva Rosa / Osama Halili / sameer kasim / man shen / Linuo Si 30/03/2017

Definition of project

1. Introduction of project

Osael Waterfall is located in a forest in the southern part of the Khera state, occupying about 3 million square meters, and attracts about 10 thousand visitors per year. The forest and waterfall are home for numerous species, from rare fauna to the most exotic birds. It also a perfect habitat for various rare species of flora.

The proposed resort for leisure, is to be built in the centre of the forest and near the waterfall, and is expected to attract more than 100 thousand tourists in a year. The resort will have a well equipped hotel, with spa, gym, golf course, and other amenities. The resort will have a buffet restaurant, providing natural and healthy food, prepared by the best chefs in the region, and with the best view at the top of the mountain. Some of the sports activities provided will include water-cycling, canoeing, floating, fishing, hiking, camping, climbing, and others. The resort will also possess an amusement park, with a swimming pool for all ages.

2. Gainers and losers from the project

Gainers

  1. Government
  2. Private companies
  3. Individuals from society
  4. Construction companies
  5. Employed individuals

Losers

  1. Nature (Fauna and Flora)
  2. Environment

3. Time period

50 Years

Identification of project impacts

1. Positive Impacts

  • Tourism Income
  • Social contact with nature
  • Maintain the environment
  • Employment creation

2. Negative Impacts

  • Plants and animals loss of habitat
  • Global warming (carbon dioxide emission)
  • Pollution

Monetary valuation of relevant effects

1. Initial outlays

1 billion pounds

2. Ongoing costs

  • Maintenance (repairs)
  • Operating costs (electricity/gas/salaries)
  • Tax and depreciation
  • other costs
  • Annual externalities (£
  • Total ongoing costs: £68 million

3. Ongoing benefits

  • Internal ( hotel/restaurant/parking/gym/water sports/swimming pool)
  • Total Revenue £180 million(yr1-5), £150million(yr6-50)
  • External (non-market benefits: CVM survey)

CONTINGENT VALUATION METHOD (CVM) Survey Responses

FINANCIAL APPRAISAL

ECONOMIC ANALYSIS (COST BENEFIT ANALYSIS)

5. Discounting – the choice of social discount rate

  • 3%
Source: UK Green Book, 2011

6. The NPV test

  • NPV ≥ 0 (CBA= 3,222,189,144 ; FA= 9,335,096,355)
  • IRR ≥ WACC (CBA= 60.22% ; FA= 77.99%)

CONCLUSION

7. Summary of results
  • The project should be undertaken, following the NPV and IRR rules
  • Although external costs are present
  • Remedial actions

RECOMMENDATIONS

  • Strong and Effective reforestation programmes
  • Thorough studies of the forest's habitants
  • Sustainable Construction Programme
  • Restricted areas within the forest
  • Sustainable practices adhered by Hotels and Restaurants (Waste Management)

Credits:

Fictitious project for Educational purposes

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