Gspccngprojguj

GSPC’s CNG Project in Gujarat

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PROJECT SUMMARY

1. Project Developer : Gujarat State Petroleum Corporation

2. Project Area : National Highway NH8 between Surat & Mehsana all major cities like Surat, Bharuch, Vadodara, Anand, Nadidad, Ahmedabad, Gandhinagar and Mehsana

3. Execution Project : 3 Years

4. Number of CNG Stations :

a. Highway Stations : 17

b. City Stations: 158

5. Capital Investment : Rs, 310 Crs. ($67 million)

6. Project Financing :

a. Equity: 35%

b. External Debt: 65%

7. Cost of Gas : Rs. 10.29/Kg

8. Sale Price : Rs. 19.52/Kg

9. Project IRR : 25.52%

10. Payback Period : 6 years



Chapter 1 Introduction

Global warming and increasing ambient air pollution is a major cause of concern for all and calls for immediate actions to contain any further damage to the environment. Various studies conducted worldwide shows that the major contributor to this increasing ambient air pollution is vehicular emissions. As per a study conducted by the Central Pollution Control Board vehicular emissions contribute to as high as 72% of the ambient air pollution in major cities.

Vehicular Pollution

Internal combustion engines need a mixture of air and fuel to burn and produce energy to move the vehicle. It is these burnt gases which come out of the exhaust that have the potential to cause pollution. In petrol engines the gases comprise of a mixture of unburnt hydrocarbons (HC), Carbon Monoxide (CO) and Oxides of Nitrogen (NOx).

It is a combination of these gases that result in automobile pollution when they are in excess quantity. Within a certain range they are acceptable but when the engine is not tuned properly or a vehicle uses obsolete technology or the quality of fuel is not good then all these result in a higher level of emission of all the gases.

If the air fuel mixture ratio is not correct then it increases the chances of pollution as it leads to inefficient fuel combustion. Also it leads to reduced power and fuel wastage, which in turn means less efficient performance of the engine along with lower fuel economy.

Contributors to Vehicular Pollution

• Increasing population in the urban areas • High vehicle density • Predominance of older and outdated vehicles plying on the roads • Large number of in-efficient two stroke vehicles • Adulteration of fuels • Poor road conditions • Inadequate traffic management system

There is a predominance of private vehicles like two wheelers and cars over public transport vehicles (buses). According to TERI, replacement of a single bus by an equivalent number of two wheelers will add to the air pollution by 27% which cars would cause 17% more pollution. Regardless of whether a bus is new or old, it offers large benefits in fuel savings, emissions and safety, if it is moderately full. The Vehicle population in India is predominantly based on petroleum fuels like diesel and petro/gasoline. These fuels are not fully combustible and results in higher polluting emissions and greater wear and tear of the engine. The CPCB has, in a study, identified 24 cities in India that have extremely high level of pollution. This is not only having an adverse effect on the environment but also on the health of its citizens. According to a World Bank study, the annual health cost to India was up to 1.15 bn USD due to ambient air pollution.



Alternate Fuel The quest for finding an alternate to the existing conventional vehicular fuels like gasoline and diesel was initiated around 1930. Besides there is a growing concern that the world may soon run out of petroleum based fuel resources. All these make it imperative that the search for alternative fuels is taken in right earnest. Various alternate fuels like Propane (LPG), Ethanol, Methanol, Electricity and Natural Gas are being considered for replacement of the existing conventional auto fuels like gasoline (petrol), diesel and kerosene. Amongst these, Natural Gas is emerging as the most promising alternate auto fuel not only for its commercial viability but also due to its environmental friendliness. Today natural gas is being used as vehicle fuel in many countries including Argentina, Egypt, New Zealand, Australia, Pakistan, Thailand and India. There are over 5000 CNG refueling stations globally catering to approximately 2 million vehicles. (source International Association of NGVs) The entire surface transport of India is based on petroleum fuel, but it's availability is of growing concern. The production or domestic crude has been declining and the transport system has been increasingly dependent on imported crude oil to meet its needs. This is severely affecting the economic condition of India. These factors, coupled with the increasing concern for a cleaner environment, have resulted in greater emphasis on use of a clean fuel like Natural Gas in the automotive sector.

Chapter 2 GSPC -A Profile

Gujarat State Petroleum Corporation (GSPC), a Government of Gujarat undertaking is one of the pioneers in the energy industry. Starting as an exploration and production company in the upstream hydrocarbon sector, today it has a presence in down stream gas transmission, power generation and providing IT solutions. Gujarat State Petronet Ltd- (GSPL), a subsidiary of GSPC, is creating a high pressure pipeline network for transportation of natural gas through the state of Gujarat At present the pipeline is operational between Surat and Vadodara. The Vadodara -Ahmedabad section is expected to be operation by mid 2004. The pipeline will transport indigenous gas and imported liquefied natural gas likely to be available from the LNG terminals being set up in the state. During the past few years there has been a lot of out cry over the increasing pollution levels in the major cities of India. Supreme Court has identified about 24 cities with high level of pollution and this includes Ahmedabad and Surat. Judiciary intervention has made use of natural gas as an alternate auto fuel in Delhi and Mumbai and soon other cities would follow suit. GSPC now plans to enter in to the CNG sector and set up a chain of CNG stations across the state. It intends to take a lead in promoting the use of natural gas in the auto sector. As a pilot project, GSPC has already set up a CNG refueling station in Surat. The station with a capacity of 1500 Kg CNG, is fully operational and the market response has been very positive. More than 500 vehicles have converted to CNG and the numbers are slated to further increase. It now plans to set up a series of CNG stations along the NH 8 between Surat and Mehesana in a phased manner in tandem with the development of the gas transmission pipeline. It has also entered in to dialogue with all the major oil retail companies viz. HPCL, BPCL, IBP and IOC for setting up its CNG stations in the existing petro/diesel retail outlets of these oil companies. In this regards it has also signed an MoU with HPCL and plans to do the same with the other companies too.



Chapter 3 Compressed Natural Gas (CNG)

Natural gas is a mixture of hydrocarbons-mainly methane (CH4)-and is produced either from gas wells or in conjunction with crude oil production. The interest for natural gas as an alternative fuel stems mainly from its clean burning qualities, its domestic resource base, and its commercial availability to end-users. Compressed Natural Gas (CNG) is a clean and safe fuel that can be used as a substitute for petroleum fuels like petrol, diesel and kerosene. It is so called because natural gas is compressed to a pressure of 200 -250 Kg/cm2 to enhance the storage capacity of the on-board cylinders that can then be mounted on vehicles. CNG is lighter than air and disperses faster in to the atmosphere thus minimizing the risk of fire or explosion. The level of polluting emissions and carbon residue from CNG is minimal thus reducing the maintenance cost of the engine and enhancing the active life of the vehicle. Exhaust emissions from NGVs are much lower than those from gasoline-powered vehicles. For instance, NGV emissions of carbon monoxide are approximately 70 percent lower, non-methane organic gas emissions are 89 percent lower, and oxides of nitrogen emissions are 87 percent lower. In addition to these reductions in pollutants, NGVs also emit significantly lower amounts of greenhouse gases and toxins than do gasoline vehicles. It avoids cases of fuel adulterations thus making available clean fuel. This has a very positive effect on the health and environment. Dedicated NGVs produce little or no evaporative emissions during fueling and use. For gasoline vehicles, evaporative and fueling emissions account for at least 50 percent of a vehicle's total hydrocarbon emissions. Dedicated NGVs also can reduce carbon dioxide exhaust emissions by almost 20 percent. Fuel Characteristics CNG Petrol Diesel Toxic to skin No Moderate Moderate Toxic to lungs No Moderate Moderate Specific Gravity lighter or heavier thanair (air = 1.00) 0.55 (lighter) 3.4 4.0

Source/feedstock Natural Gas Petroleum Petroleum Fuel Vs Emissions (gm/100 km)

Fuel Co2 UHC Co NOx Sox PM Petrol 22,000 85 634 78 8.3 1.1 Diesel 21,000 21 106 108 21 12.5 LPG 18,200 18 168 37 .38 .29 CNG 16,275 5.6 22.2 25.87 .15 .29

Source: US Energy Department Economies of CNG The energy content per kilogram (Kg) of CNG is very similar to that of petroleum based fuels, but it has lower energy content per unit of volume. The excellent knock resisting property of CNG allows for use of a higher compression ratio resulting in an increased power output and greater fuel economy when compared to petrol. CNG can be used in engines with a compression ration as high as 12:1 compared to normal gasoline (7.5:1 to 10:1). At this high compression ratio, natural gas-fuelled engines have higher



thermal efficiencies than those fuelled by gasoline. The fuel efficiency of CNG driven engines is about 10-20% better than diesel engines. Use of CNG in vehicles results in higher mileage per unit due to its superior characteristics. The cost of CNG is also very competitive to that of petrol and diesel. Following table depicts the price advantage of CNG vis-a-vis other petroleum fuels currently being used in vehicles. Economies of CNG *

Fuel Price Mileage Cost per Km Petrol Rs. 36.50/Ltr 18 Km/Ltr Rs. 2.03 diesel Rs. 24.10/Kg 14 Km/Kg Rs. 2.00

AutoLPG Rs. 19.50/Ltr 16.5 Km/Ltr Rs. 1.18 CNG Rs. 24.00/Kg 25 Km/Kg Re. 0.96

* for an 800 CC vehicle Types of CNG Stations CNG stations can be broadly categorized in to the following categories: Mother Stations: These types of stations typically have a high compression capacity and can be used to refill vehicles as well as to supply CNG to smaller daughter stations. Normally a mother station is connected to the natural gas supply pipeline and is equipped with a compressor which compresses low pressure natural gas to the required pressure of 250 bar for dispensing CNG to the vehicle cylinders. Alternately a Mother station can also have CNG cascades for stocking and dispensing CNG. The cost of setting up Mother Station varies between Rs. 3 to Rs. 5 crores depending on the facilities available. Daughter Stations: These are small CNG stations that cater to the CNG demands in areas where the gas pipeline are not present. CNG is dispensed at these stations using vehicle mounted cascades that are replaced and refilled at a Mother station as and when the pressure falls. The investment required for the setting up of a Daughter station varies between Rs 1.0 crore to Rs. 1.2 crores. CNG Conversion Kits Unlike gasoline and other petroleum fuels conventionally used in vehicles, which must be vaporized before ignition, CNG is already in gaseous form when it enters the combustion chamber of the vehicle. When the intake valve opens, the gas enters the combustion chamber where it is ignited to power the vehicle. Vehicles running on gasoline need to be fitted with a CNG conversion kit to make it operate on CNG. Major parts of a CNG conversion kit are Illustrated below:

1. Pressure Regulator 2. Petrol Solenoid Valve -Stops petrol flow when operating on CNG 3. On-Off valve and refueling connector - Opens or stops gas flow to the regulator and includes a

refueling device 4. Control Module/Change-over Switch Electronic control component with fuel selection switch 5. CNG level indicator Shows CNG quantity on vehicle dashboard. 6. Gas-Air Mixer 7. CNG Cylinder with valve, vapor bags & bracket 8. Petrol hose 9. Low pressure gas hose 10. Ignition advance processor 11. High pressure gas tube



12. Wire harness 13. NRV in petrol return line 14. Pressure gauge

Conversion to CNG for different vehicle segments Existing petrol vehicles can use CNG by installing a bi-fuel conversion kit and the converted vehicle will have the flexibility of operating either on CNG or petrol. CNG is lead and sulphur free and its use substantially reduces harmful engine emissions and helps keep the environment clean. Besides. operational cost of vehicles running on CNG is approximately one third that of petrol. Due to its relative advantages and superiority over conventional fuels, CNG is the most promising alternative fuel for city transport. Conversion Cost for different types of vehicles

Types of Vehicle Cost of Conversion * Autos/Three Wheelers Rs. 17,000 Cars/Taxis Rs. 35,000 Bus/Trucks Rs. 5,00,000

Advantages of CNG as an auto fuel Economic Benefits: The cost of CNG is almost half of the cost of petrol/gasoline in terms of calorific value resulting in substantial saving in fuel cos. The pay back period for the investment in the CNG conversion kit is very low (approximately 18-24 months depending on the type of vehicle). It also reduces the engine wear and tear more than doubling the engine life. This is because CNG is a fully combustible fuel and leaves no carbon deposits. Environmental Benefits : Due to lower emission there are no cancer causing particulates, less carbon monoxide and hydrocarbon emissions. This is especially important in large metropolitian areas where vehicular emissions result in maximum ambient air pollution. Carbon Monoxide emissions are reduced by 70% to 90%, hydrocarbon emissions are reduced by 40% to 60% and carbon dioxide emissions are reduced by approximately 10% as compared to vehicles running on petrol/gasoline. Flexibility and ease of use : The basic engine characteristics of a vehicle are retained while converting to CNG. The vehicle therefore is capable of running on a dual fuel mode viz. CNG or petrol/gasoline. Safe & Efficient : CNG is much safer than petrol/gasoline, diesel fuels or propane fuels. Being lighter than air, in case of a leak, it dissipates quickly in to the atmosphere thus avoiding explosions and other fatal accidents. Other Benefits:

• Reduces demand for petroleum fuels whose supply is fast depleting • Improves fuel consumption and engine efficiency • Dry gaseous fuel does not dilute the lubricating oil, thus saving on oil filters and oil chargers • Reduction in engine noise levels significantly owing to its high octane number



1. Emission with CNG v/s Conventional Fuels Reduction in IDC Mass Emission with CNG retrofitted as CERTIFIED BY ARAI/VRDE. A) Comparison of CNG certified test data from automotive research association of India (ARAI) with emissions norms for buses Sulphur level

in diesel Hydrocarbon Carbon monoxide

Nitrogen oxide

Particulate matter

1992 standards 1 3.5 14.4 18 No standard

1996 standards 1 2.4 11.2 14.4 No standard

Bharat Stage 1. April 2000 1

1.23 4.9 9 0.40

Bharat Stage II (EURO 2 standards) October 2001 2

500 ppm (0.05 per cent) 1.1 4.0 7 0.15

EURO 3 standards 3 350 ppm (0.035 per cent)

0.66 2.1 5 0.10

EURO 4 standards 3 50-10 ppm

(0.005-0.001 per cent)

0.46 1.5 3.5 0.02

Ashok Leyland CNG bus 4

0.04* 2.92 2.91 0.01

Telco CNG bus 5 0.25* 1.68 3.42 0.03

Note: * Non-Methane Hydrocarbon are a small fraction of total hydrocarbon in CNG vehicles

B) PASSENGER CAR (PETROL)

VEHICLE POLLUTANT (Gm/Km)

PETROL (Gm/Km)

CNG (Gm/Km)

% REDUCTION in Gm/Km

CO 19.79 0.55 97 Maruti Omni HC

1.14 1.02 11

CO 4.94 0.59 88 Maruti Gypsy HC 1..86 1.42 24 CO 18.38 0.94 95 Premier

Padmini HC 2.82 2.03 28 CO 15.6 2.04 87 Premier 118

NE HC 2.57 1.92 25 CO 52.16 0.78 98 Ambassador HC 6.37 4.33 32



B. AUTORICKSHAWS (PETROL) POLLUTANT

(Gm/Km) PETROL (Gm/Km)

CNG (Gm/Km)

% REDUCTION in Gm/Km

CO 3.26 3.99/1.26* 63. 19- HC 5.48 1.57 71.35 C02 47.44 27.6 41.82

BAJAJ THREE WHEELER

NOX 0.25 0.2 20.00

Chapter 4 CNG in India

The CNG programe in India was launched by GAIL India Ltd. in 1992 by setting up CNG stations in Delhi, Mumbai and Vadodara. A number of research studies have been conducted by various agencies over the years to access the feasibility and suitability of CNG as an auto fuel. However, not much push was given to the programme. The main impediment in the implementation of the CNG programme was the inadequate availability of natural gas and lack of proper transportation infrastructure. Conversion to CNG was mainly targeted for petrol driven vehicles. Delhi The Supreme Court of India has identified Delhi as one of the most polluted cities of India. As per a World Bank study, the health cost of air pollution in Delhi was a staggering USD 0.21 Bn. In order to reduce the pollution level and to promote the use of natural gas, Indraprasth Gas Ltd. was set up. As per a Supreme Court directive passed in July 1998, it was made mandatory for all public transport vehicles to convert and use CNG. Currently there are 106 CNG stations in Delhi with an installed compression capacity of 1.2 million Kg per day catering to 78500 vehicles including 8500 buses. Mumbai GAIL, British Gas and the Government of Maharashtra, formed a joint venture company, Mahanagar Gas Ltd., in 1995, for natural gas distribution in Mumbai and to promote use of CNG as an auto fuel. Subsequently the Mumbai High Court passed an order for conversion of all taxies, autorickshaws and transport vehicles to CNG/LPG. Currently there are nearly 50 CNG stations in Mumbai with an installed compression capacity of 0.4 million Kg per day and catering to nearly 70000 CNG vehicles. Present Status of CNG in India

City CNG Supplier No. of Cars No. of Buses No. of Autos No. of CNG Stations

Delhi IGL 16000 8500 49,000 106 Mumbai MGL 44500 46 22,000 46

Source: GAIL



Gujarat The CNG programme in Gujarat was started by GAIL by setting up the first CNG station in Vadodara. Currently CNG is available in Vadodara, Bharuch, Ankleshwar and Surat.

Chapter-5 Why CNG in Gujarat?

Vision of Government of Gujarat “By 2007 Natural Gas will be available in every corner of the state" Hon. Finance Minister, Government ofGujarat in his budget speech. The state government aims to be a model state in the implementation of CNG in India. It is dedicated towards improving the quality of life and environment of the state by promoting use of clean fuels and has aggressive plans to have the highest density of CNG vehicles in the state by 2007. Abundant Natural Gas Availability The success or failure of implementation of the CNG project depends on adequate availability of Natural Gas. The Mashlekar Committee report on Auto Fuel Policy has observed that the feasibility of using CNG as an alternative auto fuel would depend on the overall natural gas availability as well as availability of a strong natural gas transmission infrastructure connecting various regions. Gujarat not only has huge reserves of indigenous natural gas but two LNG regasification terminals are also being set up on the coasts of the state. Availability of Natural Gas in Gujarat Current Availability Qty (MMSCMD) GSPC 3.50 GAIL 17.00 CAIRNS 3.30 Additional Availability from 2004 GSPC 1.50 CAIRNS 1.14 NIKO Resources 0.50 Shell LNG Terminal- Hazira 10.00 Petronet LNG Terminal- Dahej 10.00 Total Potential Availability 46.94 Gas Transmission Infrastructure A state wide Gas Transmission pipeline network is also under implementation which will make natural gas available in different parts of the state. Gujarat State Petronet Ltd., a subsidiary of Gujarat State Petroleum Corporation, has ambitious plans to set up approximately 1500 Km of natural gas transmission network across the state. The project is already under implementation and currently over 200 Km of transmission pipeline is operational. The Vadodara section of the project has been commissioned and the Vadodara – Ahmedabad – Kalol section is expected to be operational by next



year. This Transmission infrastructure will enable transportation of natural gas to various parts of the state. (Map of Gas Transmission Network Annexed) High Level of Air Pollution Gujarat is one of the fastest growing stales in India with a relatively high standard of living. The state accounts for 9% of the national energy consumption but has only 5% of the total national population. It also accounts for one of the highest density of vehicular traffic on its roads resulting in high level of vehicular emissions. As per a study conducted by CPCB, Ahmedabad is one of the most polluted cities in the country. Annual Average Concentration of Pollutants in Ambient Air National Std Ahmedabad Surat Vadodara Rajkot SPM Mg/m3 140 272 332 256 343 RSPM 60 198 -- 48 270 NoX 60 35.2 20.4 20.4 20 This high level of pollution has resulted in a deteriorating health condition of the citizens and increasing spend on medical and health facilities. This has made it imperative for the state to seriously consider CN as a fuel option. This will have a visible effect on the environment and the pollution levels. High Vehicular Population in the State Gujarat accounts for a huge chunk of the total vehicular population of the country. Ahmedabad city claims to have the highest density of two wheeler vehicles. Regionwise Vehicular Population in Gujarat (March 2003)

(‘000 nos) Region Goods Vehicles Passenger Vehicles Cars Others Total

Ahmedabad 58.42 24.16 252.53 49.01 1386.53

Mahesana 19.16 0.96 49.00 51.97 274.83

Rajkot 35.35 2.43 46.32 35.53 556.65

Bhavnagar 13.44 0.77 18.61 23.77 262.06

Surat 31.71 1.50 128.27 22.44 896.84

Vadodara 33.59 3.29 108.74 23.74 698.17

Nadiad 29.08 0.92 79.14 57.01 432.89

Palanpur 6.22 0.10 15.81 35.35 100.72

Himatnagar 12.21 0.10 19.18 50.8J 167.55

Jamnagar 20.44 0.84 16.58 14.51 210.01

Junagadli 21.50 0.40 14.73 21.36 206.53



Bhuj 24.37 0.59 27.51 2-1 8C 237.94

Surendranagar 5.94 0.12 5.52 25.27 106.26

Amreli 4.84 0.44 3.05 10.81 68.12

Valsad 17.25 0.24 52.05 11.61 316.88

Bharuch 10.28 1.20 29.12 11.61 189.41

Godhra 6.81 0.55 14.98 8.72 103.39

Gandhinagar 4.33 8.78 18.77 5.31 113.35

Bardoli 1.88 0.16 6.57 3.34 65.70

Dahod 2.93 0.21 6.50 4.61 53.52

Navsari 1.00 0.08 3.13 0.63 32.87

Patan 0.88 0.03 2.09 3.01 14.64

Porbander 0.92 0.00 1.11 0.65 12.35

Rajpipla 0.03 002 0.12 0.0-4 1.15

Total 362.57 47.86 919.38 .T6.03 1805.84

Source: CMIE Monthly Review, May 2003 Gas Distribution Policy In order to give a stable legal framework to the downstream gas transmission and distribution sector in the State and the facilitate inward investment, the State Government has enacted the Gujarat Gas (Regulation of Transmission, Supply and Distribution) Act, 2001. A Presidential reference under the Indian Constitution has been made in order to resolve the issue of jurisdiction of the State Government and Central Government. However, sensitive to the fact that development of retail gas transmission and distribution networks on a viable and bankable basis is crucial, the Gujarat Government has formulated and notified the Interim Policy for Gas Distribution Projects in Gujarat. Under this initiative, public-private partnership is encouraged for development of the gas industry. Private players are allowed to set up gas distribution networks in different regions. Already permissions have been given to various players for setting up gas distribution networks in Ahmedabd, Gandhinagar, Vadodara and Surat districts and others are soon to follow.



Chapter-6 Economics of CNG for End Users

Economics of a CNG Bus Fuel Price Mileage Cost Per Km

(excluding pilferage)

Annual Savings*

Cost Per Km (including pilferage)

Annual Savings*

Diesel Rs. 22/Ltr

4.00 Km/Ltr

Rs. 5.50 Rs. 6.10

CNG Rs. 19/Kg

4.40 Km/Kg

Rs. 4.30

Rs. 124090.9

Rs. 4.30

Rs. 188257.58

* Average distance traveled is 300 Km/day, 350 operational days in a year Bus plying approximately 300 Km per day can save up to Rs. 0.12 million annually per bus. This direct benefit will entice even the private bus operators to buy new CNG buses. Since diesel pilferage is a major problem faced by all bus operators, the above analysis has been done considering a 10% pilferage. Pay Back Period for CNG Buses The additional cost of a CNG bus is approximately Rs. 5 lacs. Considering the above economies of CNG vis-à-vis diesel, the pay back period for a CNG bus at different CNG – diesel price differential would be as follows: Thus it can be seen from the above table that the pay back period for a CNG bus is inversely proportional to the price difference between diesel and CNG i.e higher the price difference lower the pay back period. Currently the price of diesel is in the range of Rs. 22 – Rs. 23 per litre. However this price is slated to increase gradually as stringent pollution control norms have made it imperative to decrease the sulphur content of diesel. This means higher refining costs and thus higher selling price per unit. However the price of CNG is going to be stable vis a vis diesel prices. Crude oil is the most price volatile commodity in the world varying up to 40% on a daily basis and diesel prices have a direct repercussion due to volatility in the crude oil prices. Economies of CNG for 4 Wheel & 3 Wheel Vehicles High Run Cars High run Cars are those that run on an average 80 Km daily. This segment would be the major beneficiary of CNG and will be the perfect target for conversion. Considering the CN conversion kit cost of Rs. 35000, the pay back period at different price differential (Petrol vs CNG) would be as shown in the chart. Low Run Cars Low run cars are those run on a average 30 Kms per day. Most of the cars operating in cities are of this category. Three Wheelers Three wheelers typically mean passenger auto rickshaws and they are the biggest beneficiary of conversion to CNG. Even with a price differential of Rs. 5 (Petrol vs CNG) the pay back period is less



than a year and the conversion cost is approximately Rs. 20,000. However, to attract this segment, support of financial institutions needs to be taken to finance the conversion cost which can be recovered from the savings in fuel costs.

Chapter 7 CNG Market Potential

The major target vehicle segments for conversion to CNG would be auto rickshaws, buses, cars and other four wheel light commercial vehicles. The buses operating in Gujarat can be classified in to three main categories. These are

• Buses operated by GSRTC • Buses operated by Private Operators • Buses Operated by Other Operators

Buses Operated by GSRTC The state owned GSRTC is the largest fleet operator in the state with a total fleet size of 9206 buses of which nearly 8000 ply on different routes within and out side the state. The average distance traveled by each bus per day is 370 Km. Currently the entire fleet consists of diesel buses. Most of the buses have out run their active life span and incur high repairs and maintenance expenses. There is also high level of pilferage and adulteration by the bus drivers. According to GSRTC officials, pilferage accounts for about 15%-20% of their total fuel cost. Fuel cost accounts for nearly 26% -30% of the total annual expenditure. Use of CNG as a fuel would not only reduce the total fuel cost, but will also improve the vehicle life and efficiency. Besides it will also avoid adulteration and pilfering by the drivers. Buses Operated by Private Operators Another major bus segment is the Private bus operators plying on major routes in the state such as Surat – Palanpur, Rajkot – Ahmedabad, Ahmcdabad – Vadodara, Vadodara – Mchasana. The total number of registered buses is approximately 9200 out of which 6000 buses are in working condition. In this segment too the major problem is diesel theft which accounts for more than 10% of the total diesel consumption. Introduction of CNG will eliminate theft of fuel and thus result in savings for the bus operators. Other Operators This segment comprises of maxi cabs, school buses, ambulances and private service vehicles. The growth rate in these segments is as follows:

Vehicle Segment % Growth Rate No. of Vehicle Maxi Cabs 32.35% 1721 School Bus 11.74% 348 Private Segment Vehicles 1.5% 2952

Source: Commisionarate of Transport, GoG



Market Assessment This report tries to ascertain the potential market size of vehicular population that can be targeted for conversion in the proposed project area and the resulting feasibility of the project. For the purpose of analysis, only conversion of auto rickshaws, cars and buses to CNG has been assumed. However if the potential size of the other vehicle segments, as mentioned above, are included, the total potential for CNG would increase tremendously. Potential Bus Market For the purpose of analysis, only buses operated by GSRTC and private operators have been considered for conversion as they are the main operators operating a large number of buses. Conversion of the buses operated by these two segments itself will create a huge requirement for CNG in the state. Out of the total 8000 operational buses of GSRTC, approximately 5250 buses operate on the Surat-Mehasana sector. These include 1400 old buses (that have out lived their active life) and 3850 regular buses. If even 25% of the existing regular GSRTC as well private buses and all the old GSRTC buses are replaced by CNG buses, there exists a huge potential for CNG. Potential Market of Buses in the Project Area

Bus Category No. of Buses GSRTC Old 1400 GSRTC Regular 3850 Private Buses 5582 Total 10832

Source: GSRTC, Private Bus Operators Association Potential Market of Other Vehicles This report considers conversion of only auto rickshaws and cars apart from buses. However there exists a huge potential market in the other vehicle segments that can be targeted for conversion. It has been assumed that the conversion of auto rickshaws, cars and buses would have a cascading effect on the operators of the other vehicular segments and will induce them to convert to CNG. Regionwise Vehicular Population District A'bad Mehasa Surat Vadoda Nadiad Valsad Bharuc

hGnagar Total

Goods Vehicle

Truck /Lorries 26821 13444 12443 15052 13565 4616 5181 1872 92994 Tankers 2868 717 635 4737 539 408 176 191 10321

3 Whirs Goods Veh. 17127 2938 11910 5367 5406 3152 2638 1094 49632 Other Light Goods Vehd. 11600 2061 6721 8430 9520 9070 2288 1170 50860 Passenger Vehicles

Maxi-Cab 438 0 41 341 39 18 681 163 1721 School Bus 116 19 120 29 18 28 6 12 348

Private Service Veh 726 302 297 1184 99 105 187 52 2952 Police Van 797 78 102 182 34 34 12 11 1300 Ambulance 759 119 210 194 138 115 80 621 2236



Motor Car& S.Wgn. 173781 16398 79101 69600 31901 23878 14875 12240 421774 Taxi 5972 3085 1446 4046 2600 5480 1444 729 24802 Jeep 19165 14607 7618 6949 7556 4690 2293 3494 66382 Auto-Rickshaw 53608 14912 40103 28149 37069 17997 10503 2304 204645

Source: Commissioner of Transport, Govt. of Gujarat. Potential Demand The potential CNG demand in the auto rickshaws, buses and cars segment under various scenarios are as under: Avg. Daily

Distance (Km)

Daily Consumption

(Kg)

Mileage (Km/Kg)

% Conversion

No. of CNG

Vehicles

Potential Demand

(Kg) Bus 300 60 5 10% 2347 176040.0 Car 60 4 15 10% 42177 168709.0 Autorickshaws 100 4 25 10% 20465 81858 Total 64989 426607.6 Avg. Daily

Distance (Km)

Daily Consumption

(Kg)

Mileage (Km/Kg)

% Conversion

No. of CNG

Vehicles

Potential Demand

(Kg) Bus 300 60 5 25% 3762 282150 Car 60 4 15 20% 84355 337419 Autorickshaws 100 4 25 20% 40929 163716 Total 129046 783285 Avg. Daily

Distance (Km)

Daily Consumption

(Kg)

Mileage (Km/Kg)

% Conversion

No. of CNG

Vehicles

Potential Demand

(Kg) Bus 300 60 5 50% 6120 459000 Car 60 4 15 25% 105444 4211774 Autorickshaws 100 4 25 50% 102323 409290 Total 213887 1290064 Target Conversions Assumed Buses GSPC has plans to finance 100 new CNG buses for GSRTC. This will create an anchor demand for CNG in the initial stage of the project and will also demonstrate the benefits of using CNG buses over diesel buses. This will induce the private bus operators, operating on this route, to replace their diesel buses by new CNG buses. Besides GSRTC will also implement a phased roll out plan to replace its entire diesel bus



fleet with new CNG buses. By 2006 the entire CNG infrastructure will be in place and will ensure a smooth and trouble free operations of the CNG buses. This will result in increased conversion. Bus Conversion Assumed 2004 2005 2006 2007 2008 2009 2010 No. of Buses 200 400 900 1400 1900 2400 2900 Car / Four Wheelers and Three Wheelers It has been assumed that cars (especially taxis that run long distance) and autorickshaws would begin converting to CNG immediately because of economic advantages as price differential between gasoline and CNG is substantial. Autorickshaws are the major cause of pollution in urban areas and so there will be greater efforts for its conversion. It has been assumed that the current autorickshaw population will be converted to CNG by year 2008 and all new auto rickshaws introduced in the market will be CNG autos. Conversion kit cost can be recovered in less than two years (refer to “Economic of CNG”). Gradually other potential vehicle segments too would begin conversion to CNG considering the economic benefits of CNG. Conversion Assumed Vehicle Segment 2004 2005 2006 2007 2008 2009 2010 Three Wheelers 41000 85000 128000 167200 193400 212600 228800 Car/Other Four wheelers 16350 32350 47950 59800 74150 90050 101500

Chapter-8

CNG Implementation Strategy GSPC has ambitious plans to be a front runner in the implementation of the CNG programme in Gujarat and to develop the state as a model for implementation of such future programmes in other regions. Astute project planning and strict implementation is necessary for the timely completion of the project. CNG Station Location & Spread The gas transmission pipeline infrastructure is currently operational between Surat and Vadoaara. So the CNG stations will be first set up along this stretch and later they will be extended up to Mehasana. In order to identify the locations along the highway where CNG stations can be located, a survey was conducted along NH 8 between Mehasana and Surat. While identifying these locations following parameters were considered:

• Distance from the Gas Grid • Vehicular traffic along that route • Potential to partly cater to the demand of the near by cities

The locations identified for the highway CNG stations is annexed. The civil construction and equipment installation activities will be initiated at the earliest and all stations will be set up 2005. These stations will have a capacity of approximately 1300 SCM/Hr, The number of CNG stations planned to cater to the potential market in different regions is as follows:



CNG Station Locations Location Highway Station City Station 2003 2004 2005 2003 2004 2005 Surat 2 -- -- 15 10 -- Bharuch 1 -- -- 5 5 -- Vadodara 1 1 -- 5 5 -- Nadiad 1 1 -- -- 2 -- Anand 1 -- -- 1 1 -- Ahmedabad* 2 3 1 30 50 20 Gandhinagar -- 2 -- -- 2 2 Mehasana -- 1 -- -- 2 3 Total 8 8 1 56 77 25 * Ahmedabad is the most polluted city and so maximum number of city CNG stations will be set up here to cater to the large number of auto rickshaws and cars. CNG From LNG Till the time that the natural gas transmission infrastructure is not set in place in all regions, GSPC has plans to make CNG available directly through LNG. Technological advancement in the areas of natural gas transportation has made it possible to transport LNG to different areas directly through cryogenic road tankers. Thus CNG can be made available even in places where there is no gas transportation infrastructure. Negotiations have been initiated with manufacturers of such cryogenic road tankers for transporting LNG to different places till the time that the gas transmission infrastructure is not set in place in such regions. Talks are also on with Petronet LNG Ltd. And Shell for procuring LNG from their respective regassification terminals. The Dahej LNG terminal of PLL is expected to be operational by December 2003. CNG Daughter Stations GSPC plans 10 set, up 158 city CNG stations in all the major cities between Surat and Mehesana. These stations will mainly focus on the autoricksha and car segments and will be set up at the existing petrol and diesel retail outlets of companies like HPCL, BPCL and IBP. In this regards an MoU has been signed with HPCL to jointly set up CNG stations at their existing facilities. Similar MoUs will also be signed with the other oil companies, The city CNG stations will have a capacity of approximately 700 SCM/Hr. Currently city gas distribution network exists only in Surat city. So the city CNG stations with in Surat will source natural gas directly from this distribution network. However there is no city gas distribution infrastructure in any of the other cities. Adani Energy Ltd. is in the process of setting up a gas distribution network in Ahmedabad and Vadodara. However this network is not expected to be operational before 2006. Till the time that adequate city gas distribution network is not set in place in the other cities, daughter CNG stations will be set up in these cities. These CNG stations will operate through a mobile truck and will source natural gas from the near by highway stations which will be stored in cascades and transported by road tankers to the various CNG stations. Various vendors for supplying CNG daughter station equipments have been identified and details of their products are being studied. CNG Station Ownership While setting up the CNG stations, there are two options available to GSPC: Out right purchase of land by GSPC and setting up of its own CNG stations or tie up with oil companies like HPCL, BPCL etc. for setting up the CNG stations in the laters existing petrol/diesel outlets. In the second option GSPC will assist the oil companies in setting up the CNG station by assisting in the procurement of the necessary equipments and other facilities. A revenue sharing agreement will be worked out mutually. In this



regards talks have been initiated with these oil companies and a copy of the draft MOU has already been sent to them for their perusal. Standardization of Station Layout and Design In order to create a strong brand visibility, it is necessary that all the CNG stations should follow a standardized design and layout scheme. The National Institute of Design has been appointed for standardization of size and design of all the CNG station is under process and once finalized, it will be adopted at all the CNG stations. The number of CNG dispensers at each station would depend upon the size of the station. CNG Station Operations In case of GSPC owned CNG stations, the daily operation of the station will be handled by GSPC itself. In case of CNG stations set up at existing retail outlets or oil companies the day to day operations of the CNG stations would be outsourced to the dealer operating the petrol pump by entering in to a long term Operation Agreement with them. The selected Operator of the CNG stations would be responsible for the CNG filling, stock keeping, customer handling, billing and cash management activities and maintaining the safety and environment of the stations. The remuneration paid to the Operator would be linked to the sales volume at the respective stations. For the purpose of financial analysis it has been assumed that the operator will be paid Rs. 1.20 per Kg of CNG sold. CNG Equipment Supply & Station Maintenance For the smooth and efficient operation of the CNG station, it is necessary to use the equipments of the highest quality. Dialogues have already been initiated with various reputed CNG equipment suppliers for compressors, dispensers, cascades etc. for the supply of these equipments. The suppliers of CNG equipments would also be responsible for the maintenance of the CNG equipments. A long term Maintenance Contract will be finalized with the selected suppliers. CNG Bus Financing GSPC plans to initially finance 100 CNG buses which will be operated by GSRTC on the Ahmedabad – Gandhinagar route. This will create awareness about the benefits of CNG apart from creating an anchor demand and also induce the private bus operators to consider CNG as an alternate fuel. Subsequently GSRTC can initiate a phased role out plan to replace its entire diesel bus fleet with CNG buses. It has been further assumed that Rs. 25000 will be recovered every month from each bus thus financed till the cost of conversion is recovered. CNG Conversion One of the most crucial aspects affecting the viability of the project is the conversion of existing petrol and diesel vehicles to CNG. The existing petrol vehicles can be convened to dual fuel engines (CNG and petrol). Diesel vehicles can not be converted to dual fuel engines due to technology limitations as well as commercial viability. Various awareness programmes will be initiated to educate the vehicle users about the benefits of CNG and to induce them to convert their vehicles to CNG. Aggressive marketing and conversion drive is the key to the success of the project.



Conversion Kit Suppliers It is very necessary that non-CNG vehicles be fitted with authorized CNG conversion kits of reputed manufacturers. Use of spurious and duplicate conversion kits will result in higher occasions of accidents. GSPC will identify and empanel reputed conversion kit manufacturers for supplying conversion kits. Only vehicles fitted by authorized conversion kits will be allowed to refuel at the GSPC CNG stations. Meetings have been held at various levels with different CNG conversion kit suppliers to ensure that authenticate conversion kits are available in time. The conversion kit supplier will also be responsible for the maintenance of the kit in different locations. A team of technical experts from the suppliers side will remain present at the various locations to handle any emergency. Kit Installation and Monitoring While implementing the project it is very necessary that only authorized conversion kits are used in vehicles. Steps will be taken to ensure that spurious and duplicate conversion kits are not used in vehicles as this could pose serious safety risks to the vehicle owners and operators. Vehicle owners can get CNG conversion kits fitted in their vehicles only at authorized garages and work shops. Upon installation, a magnetic swipe card will be issued to the vehicle owner. When ever the vehicle owner gets his vehicle refilled at a CNG station, the swipe card can be used to ascertain that the vehicle has been fitted with an authorized CNG conversion kit. In case the vehicle owner does not have the swipe card he can be denied access to the filling station thus preventing spurious kits to be used. The swipe card can store useful information which can be used for the purpose of monitoring and analyzing data as well as for payments. CNG Conversion Centers In order to ensure smooth conversion of all targeted vehicles to CNG, a series of conversion garages will set up in different locations. For this existing large auto garages will be targeted and necessary training will be given to them in CNG conversion by the conversion kit supplier. This would not only reduce the cost of setting up new garages but will also enable making use of the skills of the existing auto mechanics thus providing better services to the vehicle owners. Assistance will be sought from the ITIs (Industrial Training Institutes) in different locations to offer courses in CNG conversion technology to create a pool of skilled manpower capable of handling the auto conversion activities. OEMS The target vehicle segments for conversion are cars, jeeps, tempos, trucks, buses and other LCVs. As GSPC plants to set up its CNG station network along the high way, the initial focus will be on buses as they constitute a major chunk of the highway vehicular traffic. The major manufactures of buses are Telco and Ashok Leyland. Meetings have been held with these manufacturers to discuss various issues related to conversion and supply of new CNG vehicles in Gujarat. CNG Stations Management System All GSPC CNG Stations will be a state of art technology employing the latest in fool proof connectivity and management solutions which will include smart cards, centralized monitoring of gas sales and monitoring system. This will not only assure operational efficiency but pilferage or false billing can also be taken care of thus providing incentive to private operators and GSRTC for CNG buses.



Chapter-9 CNG Project Financial Aspects

Project Cost Estimates GSPC plans to set up 16 highway CNG stations and 158 city CNG stations over a period of 3 years. While the highway stations will have the capacity to refuel CNG buses, the city stations will mainly cater to the cars and auto rickshaw segments. The cost of each highway station is approximately Rs. 40 million as detailed below: Cost a Highway CNG Station Cost (Rs. Mn.)

Land 4.50 Equipment 18.50 Pipeline-Mtr 8.00 Electrical purchase 3.90 GEB connection charges-11 KV 1.25 Air Compressor 0.18 Preliminary expenses 2.02 Miscelaneous expenses 1.79 Grand Total 40.14 The cost of each city CNG stations is approximately Rs. 8 million. This includes cost of compressors, dispensers, priority panels, civil construction etc. Besides the highway and city stations, one large compressor stations will also have to be set up at Dholka with adequate facility to refill natural gas road tankers for transportation to Ahmedabad city. A compressor with high capacity will have to be installed at this station and adequate space availability will have to be ensured for parking large number of natural gas road tankers. The cost of this station has been assumed at Rs. 40 million. GSPC has plans to finance 100 new CNG buses for GSRTC. The cost of new CNG bus has been considered at Rs. 1.5 million per bus. Capital Investment The cost of setting up a CNG stations has been detailed above. The CNG stations will be set up in a phased manner over 3 years. The total investment in the project is approximately Rs. 310 crores. Project Investment

(Rs. Crs.) 2003 2004 2005 Infrastructure Cost 102.91 143.72 44.02 Cost of Dholka Station 4.00 0.00 0.00 Cost of Bus Finance 15.00 0.00 0.00 Total 121.91 143.72 44.02



Cost of Gas There are two main source of gas supply to the CNG stations – indigenous gas and LNG from the Shell or Petronet LNG terminals. The indigenous gas would be available from the Hazira gas fields of GSPC. There is also availability of approximately 15000 SCM gas per day from the L&T JTI gas field in Dholka near Ahmedabad. This gas could be used to cater to the partial requirement of the three wheeler and car segment in Ahmedabad city. GSPC’s gas field in Dholka is also expected to commence commercial production shortly and so this gas will also be available for supply in Ahmedabad. The cost of the Dholka gas has been considered at Rs. 2.70 per SCM (as quoted by L&T JTI) and the cost of the gas from other sources has been considered at Rs. 7.00 per SCM. A higher cost of gas has been assumed even for the indigenous gas in order to factor in the cost implications of using LNG, if required; at a subsequent stage. Sale Price of CNG The current selling price of CNG at GSPC’s Hazira station, at Rs. 17 per Kg, is lower as compared to the selling price of CNG in Mumbai (Rs. 19.83 per Kg). Besides the current market price of petrol and diesel is around Rs. 33 and Rs. 22 respectively. So there is ample scope a raise the selling price of CNG from its existing levels of Rs. 17 per Kg. It has been assumed that 20% of the total sales will be from the highway stations and 80% of the total sales will be from the city stations. For the purpose of financial analysis, the selling price of CNG has been considered at Rs. 19.52 per Kg. The break up of the selling price is as follows: Sale Price of CNG

Basic Sale Price (Rs/Scm) 11.00 Basic Sale Price (Rs/Kg) 16.18 Excise @ 16% 2.59 Total A 18076 Sales tax on CNG @ 4% 0.80 End User price (Rs/Kg) 19.52

Operating Expenses In order to maintain higher profitability and to make the investments a viable proposition, it is of utmost importance to maintain low levels of operating expenses. The operating expense is higher in case of the city stations due to logistics charges and lower capacity of the compressors. Thus optimum utilization of the resources is very important. The main operating expense components are power cost, man power cost, administrative and marketing cost, spares and insurance. Spares and maintenance expenses has been considered at 3% of the total investment while insurance has been considered at 0.5% of the total investment. In order to ensure the smooth functioning of the equipments, and Annual Maintenance Contract has to be signed with the equipment supplier which has been considered at Rs. 8 lac per station. It has been assumed that there would be 350 operational days in a year. Power Cost Power cost constitutes a major component of the total operating cost. It has been assumed that the approximately power requirement per Kg of CNG is 0.28 Kw. The cost of power has been considered at the existing power tariff of GEB at Rs. 4.50/Kw. Thus the power cost is Rs. 1.27/Kg CNG sold. Besides this, GEB charges a fixed monthly charge of Rs. 30000 per month as rent for the high tension line.



Man Power Cost It is assumed that GSPC will depute its own human resource at its highway CN stations; while in case of the city CNG stations, the day to day operations of the stations will be out sourced to the petrol pump owner/dealer and it will be responsibility of the operator to arrange for the required man power at the station. Accordingly the manpower cost has been calculated only for the highway stations. The estimated annual cost of manpower required at each highway CNG station is as enumerated below: Manpower Cost Estimate Designation Number of

Persons Shift Salary Per

Month Total/Month Total Annual

Cost Technical-mechanical

1 2 6000 12000 144000

Technical-electrician 1 2 6000 12000 144000 Accountant/cashier 1 2 5000 10000 120000 Utilities Incharge 1 1 3000 3000 36000 Fillers 4 2 2500 20000 240000 Security 2 3 2500 15000 180000 Total 72000 864000 Depreciation and Amortization It is assumed that 20% of the total investment will be amortized every year at 10% and the balance will be depreciated over a period of time. Depreciation has been computed on the Straight Line Method at 10% as per the requirement of the Companies Act and by the Written Down method at 25% as per the requirement of the Income Tax Act. CNG Station Capacity Utilization Since there will be large turnout of CNG vehicles once the project becomes operational, it is necessary that adequate CNG should be available at all the stations. Inadequate supply will result in higher waiting period at the CNG stations resulting in frustration and will hamper the success of the project. It has been assumed that all stations will operate at 100% capacity for 15 hours every day. CNG Project Financing It has been assumed that the project will be financed by a mix of equity and debt in the ratio of 35%:65%. Since this is a long term capital intensive project that will have wide ranging socio-economic benefits, various national as well as international financial institutions can be approached to avail soft loan facilities at lower interest rates. For the purpose of financial analysis, it has been assumed that the cost of debt would be 10% for a 10 year loan including 2 years moratorium period.



Chapter-10 Financial Statements

A) CNG Vehicle Population Vehicle Segment 2004 2005 2006 2007 2008 2009 2010 Autos 25500 58000 89500 119200 142900 162100 178300 Cars/Other 4 Whirs 11850 24350 36450 48300 62650 78550 90000 Buses 200 400 900 1400 1900 2400 2900

B) Sales Quantity 2004 2005 2006 2007 2008 2009 2010 Daily Qty (Kg) 161400 353400 557800 754000 936200 1106600 1247200 Annual Qty (Mn Kg) 56.49 123.69 195.23 263.9 327.67 387.31 436.52

C) Sales Revenue Sales (Rs. Crs.) 2004 2005 2006 2007 2008 2009 2010 Auto 57.75 132.67 206.77 278.13 336.77 385.84 428.64 Cars/Others 26.84 55.70 84.21 112.70 147.64 186.97 216.36 Buses 6.79 13.72 31.19 49.00 67.16 85.69 104.58 Total Sales 91.38 202.09 322.16 439.83 551.58 658.49 749.58 Lease rental from GSRTC 3.00 3.00 3.00 3.00 3.00 0.00 0.00 Net Revenue 94.38 205.09 325.16 442.83 554.58 658.49 749.58 D) Operating Expenditure Highway Station (Rs. 2004 2005 2006 2007 2008 2009 2010 Power Charges 2.07 4.53 7.16 9.67 12.01 14.20 16.00 GEB Charges 0.25 0.54 0.58 0.58 0.58 0.58 0.58 Manpower 0.60 1.30 1.38 1.38 1.38 1.38 1.38 Admin 0.12 0.25 0.26 0.26 0.26 0.26 0.26 Spares 0.39 0.83 0.89 0.89 0.89 0.89 0.89 Insurance 0.06 0.14 0.15 0.15 0.15 0.15 0.15 Total 3.50 7.59 10.41 12.93 15.27 17.45 19.26

City Station 2004 2005 2006 2007 2008 2009 2010 Commission to retailer 5.42 11.87 18.74 25.33 31.46 37.18 41.91 Power Charges 5.51 12.07 19.05 25.76 31.98 37.80 42.60 Annual Maintenance contract 4.48 10.64 12.64 12.64 12.64 12.64 12.64 Insurance 0.45 1.06 1.26 1.26 1.26 1.26 1.26 Logistics Charges 0.33 0.33 0.33 0.33 0.33 0.33 0.33



Total Opex 16.20 35.99 52.04 65.33 77.68 89.22 98.75 E) Projected Profit & Loss Statement 2003 2004 2005 2006 2007 2008 2009 2010 Total Revenue 94.38 205.09 325.16 442.83 554.58 658.49 749.58 Cost of Gas 55.89 126.31 202.68 277.52 348.60 416.59 474.52 Operating Exp 19.69 43.57 62.45 78.26 92.94 106.67 118.01 Operating Profit (PBDIT) 18.79 3521 60.03 87.05 113.04 135.22 157.05 Depreciation 9.75 21.25 24.77 24.77 24.77 24.77 24.77 24.77 Ammortisation 2.44 5.31 6.19 6.19 6.19 6.19 6.19 6.19 Profit Before Int. Tax -12.19 -7.77 4.24 29.07 56.08 82.07 104.26 126.09 Interest 7.92 17.27 19.63 18.06 15.72 13.20 10.69 8.17 Profit Before Tax (PBT) -20.11 -25.04 -15.39 11.01 40.36 68.87 93.57 117.91 Tax 0.00 0.00 0.00 0.84 3.09 5.27 38.35 49.59 Profit After Tax (PAT) -20.11 -25.04 -15.39 10.17 37.28 63.60 55.22 68.33

F) Project IRR (15 years)

2003 2004 2005 2006 2007 2008 2009 2010 Profit After Tax (PAT) -20.11 -25.04 -15.39 10.17 37.28 63.60 55.22 68.33 Interest charges on term loans 7.92 17.27 19.63 18.06 15.72 13.20 10.69 8.17 Depreciation 9.75 21.25 24.77 24.77 24.77 24.77 24.77 24.77 Ammortisation 2.44 5.31 6.19 6.19 6.19 6.19 6.19 6.19 CAPEX 121.91 143.72 44.02 0.00 0.00 0.00 0.00 0.00 Total Cash flow -121.91 -124.93 -8.81 59.19 83.96 107.77 96.87 107.47 IRR 25.52% G) Projected Cash Flow Statement 2003 2004 2005 2006 2007 2008 2009 2010 SOURCES OF FUND PAT (Int and Tax added back ) -12.19 -7.77 4.24 29.07 56.08 82.07 104.26 126.09 Equity 42.67 50.30 15.41 0.00 0.00 0.00 0.00 0.00 Borrowings 79.24 93.42 28.61 0.00 0.00 0.00 0.00 0.00 Depreciation 9.75 21.25. 24.77 24.77 24.77 24.77 24.77 24.77 Ammortisation 2.44 5.31 6.19 6.19 6.19 6.19 6.19 6.19 Total Sources of Fund 121.91 162.51 79.22 60.03 87.05 113.04 135.22 157.05 USES OF FUND Increase in Asset 121.91 143.72 44.02 0.00 0.00 0.00 0.00 0.00 Repayment of the Borrowings 0.00 0.00 9.90 21.58 25.16 25.16 25.16 25.16 Interest 7.92 17.27 19.63 18.06 15.72 13.20 10.69 8.17 Tax 0.00 0.00 0.00 0.84 3.09 5.27 38.35 49.59 Total uses of Fund 129.83 160.99 73.55. 40.48 43.97 43.63 74.19 82.92 Net Flow -7.92 1.53 5.67 19.55 43.08 69.41 61.03 74.14 Opening Bal 0.00 -7.92 -6.40 -0.73 18.83 61.91 131.31 192.34 Net Flow -7.92 1.53 5.67 19.55 43.08 69.41 61.03 74.14



Closing Bal -7.92 -6.40 -0.73 18.83 61.91 131.31 192.34 266.48

Annexure-2 Regionwise Vehicle Conversion 2004 2005 2006 2007 2008 2009 2010 Surat Autos 5000 12500 20000 27500 32500 35500 38500 Car/Other Four wheeler 3000 5000 7000 9500 12000 15000 18000 Buses 150 158.9 176.4 193.9 211.4 228.9 246.4 BHARUCH Autos 3000 6000 8000 9000 10000 11000 12000

Car/Other Four wheelers 650 1150 1650 2650 3650 5150 6650 Buses 100 105.97 114.02 122.07 130.12 138.17 146.22 VADODARA Autos 5000 12500 20000 25000 30000 35000 38000

Car/Other Four wheelers 2200 5200 8200 10700 13200 16200 19200 Buses 100 114.67 133.42 173.09 212.76 252.43 292.1 ANAND Autos 1000 2000 3000 4500 6000 7500 9000

Car/Other Four wheelers 500 1000 1500 1700 1900 2100 2350 Buses 0 0 0 0 0 0 0 NADIAD Autos 1000 2000 3000 4500 6000 7500 9000

Cur/Other Tour wheelers 500 1000 1500 1550 1600 1700 1800 Buses 0 202.16 210.89 219.62 228.35 237.08 245.81 AHMEDABAI) Autos 10000 20000 30000 40000 47500 52500 57500

Car/Other Four wheelers 5000 10000 15000 20000 27500 35000 38000 Buses 100 270.95 297.94 324.93 351.92 378.91 405.9 GANDHINAGAR Autos 500 1000 1500 1700 1900 2100 2300

Car/Other Four wheelers 0 1000 1500 2000 2500 3000 3500 Huso 0 0 0 0 0 0 50

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