COST BENEFIT ANALYSIS

[ As per cost (Conservation) Rules 2003, Rules 6, Form A S. No. 1 (v) and
Guidelines application of Forest Act 1980, Chapter II (2.6)]

EVALUATION OF LOSS OF FORESTS

S.No. Parameters Others misc. projects i.e. Wind Power Project

1 Loss of value of timber fuel wood
and minor forest produce on an
annual basis, including loss of man
hours per annum of people who
derived livelihood and wages from
the harvest of these commodities.
The area is bears very poor tree growth and therefore
there is no felling of trees involved as well as no
collection of Minor Forest produce from the area.
Therefore loss of value of timber and fuel wood per
hectare NIL Question of harvesting of forest crop
does not arise.

2 Loss of animal husbandry The literate plate-uses which on exposure have

productivity, including loss of hardened due to oxidation of iron contained in it, offer
fodder. great resistance to any natural vegetation including
grass. Also due to grazing area is devoid of good
grasses and is full of unpalatable grasses like
Heteropogon contorts (Kusali) Aristida Paniculata
(Pandhri Kusal) etc.Hence, the loss of animal
husbandary productivity, including loss of fodder is
negligible.

3 Cost of human resettlement As there is no displacement of people because of the

wind power project, the question of human resettlement
does not arise. As such the loss on this account is NIL

4 Loss of public facilities and Public facilities and administrative infrastructure like
administrative infrastructure
roads, buildings, schools, dispensaries, electric lines,
(Roads, building, schools,
dispensaries, electric lines, railways etc. are not going to be affected due to the
railways etc.) on forest land, or Wind power project and therefore the loss on this
which would required forest land account will be NIL
if these facilities were diverted due
to the project.
5 Environmental losses: (soil As a thumb rule the environmental value of one hectare
erosion, effect on hydrological of fully stocked forest (density 1.0) would be taken as
cycle, wildlife habitual, Rs. 150 lacs to accrue over a period of 50 years. That
microclimate upsetting of means environmental value depends on the density of
ecological balance). the forest and the area of the forest. The overall density
of the proposed forest land of 0.1 to 0.4 of 56.90 ha.
majority of which is open land with scattered bushes, is
below 0.4.
 Hence the environmental loss for 56.90 ha over a
period of 50 years works out as under:

Environmental Loss for 50 years :

150x0.4x56.90 = 3414.00 Lacs.

Environmental Loss for 1 year :

3414.00 = 68.28 lacs
50

Environmental Loss per year & per ha. :

68.28 = 1.20 lacs
56.90

Therefore environmental loss per year per hect. will be

Rs.1.20 lacs.

And Environment Loss for 30 years lease period will

be Rs.1.20 x 30 years = 36.00 lacs.
This is much less as compared to the benefits due to the
project.

6 Suffering to oustees Since there are no oustees, because of the proposed

wind power project, the social cost of rehabilitation of
oustees is NIL.

Therefore, the total loss of forest, as per the approved parameters, works out to as under:

Parameters No. Loss (in Rs.)

5. Environmental losses: (Soil erosion, effect on hydrological

cycle, wildlife habitat, microclimate upsetting of ecological balance 3600000.00
------------
3600000.00

For Suzlon Gujarat Wind Park Ltd.

Authorised Signatory
S.No. Parameters Others misc. projects i.e. Wind Power Project

1 Increase in Because of the proposed wind power project there will be

productivity increase in power generation to the tune of 900.9 Lacs units
attributable to the (Kwh). Taking into consideration the Plant Load Factor
specific project. (PLF) at 25%, the power generation will be to the tune of
225.225 lacs units per year (KWH)
2 Benefits to economy Above mentioned additional electrical power i.e. 225.225 lacs
(Rs.5.92) units will be sold at the Rs. 5.92 per unit, thereby accruing
additional benefit of Rs. 1333.332 lacs per annum. This
works out to Rs. 24.43 lacs per annum per hect.
3 No. of population Population in the vicinity of site in Bharatgarh Tehsil of Dhar
benefited District directly and indirectly whole, state of Madhya
Pradesh will be benefited.

4 Employment potential Rs. 6.2 Crores through employment generations as under :

Maintenance During During
Construction Maintenance
i) Skilled 2731 1940
ii) Semiskilled 3414 3511
iii) Unskilled 12803 3881
--------- --------
Total 18948 9332
--------- --------
This further per hector per year out as under :
a) During construction :
M.D. Rate Amount
i) Skilled 2731 450 1228950
ii) Semiskilled 3414 200 682800
iii) Unskilled 12803 100 1280300
Total 18948 3192050

b) During maintenance :
M.D. Rate Amount
i) Skilled 1940 450 873000
ii) Semiskilled 3511 200 702200
iii) Unskilled 3881 100 388100
Total 9332 1963300

Total cost of (a+b) works out to Rs. 51,55,350 per year for
56.90 Hector.
This cost works out per hector per year Rs.90,604/- i.e.
0.90604 lacs
5 Cost of acquisition of As against 56.90 hector of forest land proposed to be diverted
facility on non-forest non-forest land will be transferred in the name of Madhya
land wherever feasible Pradesh Forest Department for compensatory afforestation

6 Loss of a) Loss of agriculture NIL

(a) agriculture and
(b) Animal husbandry b) Loss of animal husbandry will be Nil.
production due to
diversion of forest
land.
7 Cost of rehabilitating Since there is no displacement of persons due to the proposed
the displaced persons Wind Power Project, the cost of rehabilitation is NIL.
as different from
compensatory
amounts given for
displacement.
8 Cost of supply of free It is presumed that the project will be completed within 6
fuel- Wood to workers months. During the construction period 18948 skilled,
residing in or near semiskilled and unskilled persons will be employed. They
forest area during the will required following quantity of fuel-wood at the rate of 3
period of construction. Kg. per person per day, during 6 months 18948x3kgx180 =
10231920 Kg i.e. 10231.92 MT.

In addition to the above, 9322 skilled, semiskilled, unskilled

persons will be employed per year for maintenance work.
Their fuel- wood requirement at 3 Kg Per person per day, will
be as under :

9322x3x180 = 5033880 i.e. 5033.88 MT.

Therefore, the total requirement of fuel-wood in a year will

be 10231.92 + 5033.88 MT = 15265.80 MT.

the cost of 15265.80 MT at the rate of Rs. 4000/- per MT will

be = Rs. 61063200.00
Therefore the cost of supply of free fuel-wood to the workers
works out Per Year per hectare = Rs. 1073166.00
i.e.Rs.10.732 lacs
 A Total benefits as per above parameters are
Parameters Amount (in lacs)
No.s
2. Benefit to economy 24.43
4. Employment potential 0.906
5. Cost of acquisition of facility on non-forest land wherever feasible -
6. Loss of (a) agriculture and (b) animal husbandry production due
to diversion of forest land. -
8. Cost of supply of free fuel-wood to workers residing in or ear
forest area during the period of construction. 10.732
---------------------
36.068
B Total loss of forest as per parameters are
Therefore, the total loss of forest, as per the approved parameters, works out to as under:

Parameters No. Loss (in Rs)

5. Environmental losses: (Soil erosion, effect on hydrological

cycle, wildlife habitat, microclimate upsetting of ecological balance 1.20
------------
1.20

Therefore benefits/ cost ratio works out as under :

Benefit 36.068
--------- = ----------- = 30.05 or Say 30
Cost 1.20

Cost Benefit Ratio: 1: 30

Note: While calculating cost ratio as above, only parameters of evaluation of loss
of forests and parameters of evaluation of benefits approved by the
government of India in their guidelines Chapter II (2.6) are taken into
consideration. Other costs such as project cost, cost of compensatory
afforestation, cost of medicinal plant garden, net present value, lease rental
etc. are not considered.

For Suzlon Gujarat Wind Park Ltd.

Authorised Signatory