Volumetric Vinegar Analysis

Experiment 9 and 10: Volumetric/Vinegar Analysis Abstract: The goal of the experiment that was conducted was to figure out both the molar concentration of NaOH and the standard mole ratio of the NaOH solution. In order to find the concentration of the NaOH solution, volumetric analysis was used. In volumetric analysis, a titration mechanism was utilized in order to find the reaction that the base will end up having with KHC8H4O4. , also known as KHP. Phenolphthalein, which is the indicator that was used in this experiment, assisted in figuring out at exactly what point was there neutralization.The indicator turns the solution into a bright pink color once neutralization has occurred. In experiment 10, the average molarity of NaOH that was found in experiment nine was used in order to find out if the vinegar that was being used in the experiment contained around the same percent mass of acetic acid that is found in regular vinegar. The experimental value of NaOH that was used was 1. 0 425 grams and the molarity of NaOH was found to be 0. 089 m/L of NaOH. Towards the conclusion of the experiment, the average percent mass of acetic acid was calculated and found to be 1. 695%.Regular house hold vinegar’s average percent mass of acetic acid usually ranges to 4-5%. Based on the percent mass of acetic acid obtained in the experiment, the vinegar that was used in experiment 10 was clearly not house hold vinegar. The hypothesis for this experiment was, if the average percent mass of acetic acid ranged between 4-5%, then it is house hold vinegar. However, due to the results from the experiments conducted, this hypothesis was rejected. In order to obtain the results that the groups were searching for, titration was used in both experiments to find the answer.The method of titration involves the measurement of KHP and NaOH. Afterwards, the volumetric analysis was used, with the indicator included. The experiment starts by finding the measurements of KHP. The indicato r was added later on, and then the titration began with the NaOH solution. It was apparent once the solution was neutralized because the indicator caused the solution to turn bright pink. The experiment also required the utilization of volumetric mass in order to find the percent mass of acetic acid in vinegar.The mass of vinegar is then titrated along with the indicator endpoint with the sodium hydroxide solution. In order to find the average acetic percent mass of vinegar, the concentration found in NaOH in experiment 9 was utilized together with the known volume of NaOH. Materials: Please refer to Experiment 9 and 10 on pages 127-136 and 137-142, of Laboratory Manual for Principles of General chemistry 9th Edition by J. A. Beran. The only deviation that was performed during this experiment was the two to three extra drops of the indicator phenolphthalein in order to distinguish a titration point.Results: Experiment 9: Data: |Table 1: Measurement |Trial 1 |Trial 2 | |Mass of KHC8H 4O4. (g) |. 509 g |. 501 g | |Buret Reading of NaOH (mL) |28. 3 mL |26. 7 mL | Table 1 shows the measurements recorded for experiment 9, volumetric analysis Table 2: Calculations |Trial 1 |Trial 2 | |Moles of KHC8H4O4 (mol) |. 000303 |. 0002485 | |Volume of NaOH Dispensed (L) |. 0034 |. 0032 | |Molar Concentration of NaOH (mol/L) |. 089 |. 089 | Table 2 shows the calculations derived from experiment 9, volumetric analysis Calculations:Moles of KHC8H4O4 x 1 mol KHC8H4O4/ Molar Mass KHC8H4O4: 0. 089 m/L NaOH x 0. 0034 L= . 000303 moles NaOH 0. 089 m/L NaOH x 0. 0032 L= 0. 0002485 NaOH Volume of NaOH Dispensed (mL): Buret Reading of NaOH= 28. 3 mL, 26. 7 mL Molar Concentration Concentration of NaOH: 2. 45 x 10 -3 mol OH-/. 0275 L NaOH = 0. 089 M/L NaOH Results: Experiment 10 |Table 3: Measurement |Trial 1 |Trial 2 | |Mass of Vinegar (g) |1. 048 g |1. 37 g | |Buret Reading of NaOH (mL) |3. 4 mL |3. 2 mL | Table 3 shows the measurements recorded for experiment 10, vinegar analysis |Table 4: Calculations |Trial 1 |Trial 2 | |Volume of NaOH Used (mL)(L) |3. 4(. 0034) |3. 2(. 0032) | |Molar Concentration of NaOH (mol/L) (given) |0. 089 |0. 89 | |Molar Mass of Acetic Acid (g/mol) |. 0182 |. 0171 | |Mass of Acetic Acid in Vinegar (g) |1. 048 g |1. 037 g | |Avg. Percent Mass of Acetic Acid in Vinegar (%) |1. 695% | | Table 4 shows the calculations derived from experiment 10, vinegar analysis. Calculations: 1. Molar Concentration of NaOH (mol/L) Given (. M Solution) 2. Mass of Acetic Acid in Vinegar (g): Moles of Acetic Acid (mol) x Molar Mass of Acetic Acid (g/mol): 3. 026 x 10 -4moles of acetic acid x 60. 05 g/mol= . 0182 g 2. 848 x 10 -4moles of acetic acid x 60. 05 g/mol= . 0171 g 3. Avg. Percent Mass of Acid in Vinegar (%): 1. 65%+1. 74%/2= 1. 695% Discussion: The experiment began by adding NaOH to the mixture of deionized water and KHP in the beaker. The H+ ion that is found in KHP, reacted to the OH- ions that are found in the NaOH solution, even as more of the Na OH continued to be added into the mixture.When there turned out to be an abundance of NaOH, there were no longer any H+ to be added to KHP. As a solution, the extra OH-ions were found in the NaOH solution was used to make the indicator activate and make the solution turn pink. It was imperative that the solution be mixed the correct way. If it was not mixed the correct way, the results from the experiment will be inaccurate. If the reading had proven to be inaccurate because of that mistake, the volume of the NaOH solution mixed with the KHP will eventually get neutralized to a point where the numbers in the results would be very off.Two trials were done in this experiment in order to ensure that that mistake never happened and the volume of NaOH was found. Once the solution had finally been able to neutralize, the moles of the KHP were found and ended up being equal to the moles of NaOH. This information allowed for the molarity to be found. The average molarity that was in NaOH ha d been found in experiment 9, it was . 089 M. Both experiments 9 and 10 seemed to have similar traits because both of them involved titration. The titration was used in order to find the number of moles that was found in the acetic acid of the vinegar solution that was used.The normal amount of acetic acid found in household vinegar is between 4-5%. The experiments helped determine that household vinegar was definitely not the vinegar that was being used since the acetic amount that was found was 1. 695%. Conclusion The hypothesis was proven in the first experiment because the base of NaOH did end up neutralizing KHP’s acids. The indicator turned the solution pink; therefore the hypothesis in the first experiment was not rejected. The experiment involving the molarity of NaOH was very close in numbers. The molarity that was given was . 1 M, and the molarity that was found in the experiment was . 89 M. The hypothesis for the second experiment was â€Å"If the average percent mass of acetic acid ranged between 4-5%, then the vinegar that was being used for the experiment was household vinegar. † However, since the average percent mass of acetic acid resulted as 1. 695%, which was lower than household vinegar; this caused the hypothesis to be rejected. Works Cited Beran, Jo A. Laboratory Manual for Principles of General Chemistry. Hoboken, NJ: Wiley, 2011. Print. Tro, Nivaldo J. Principles of Chemistry: A Molecular Approach. Upper Saddle River, NJ: Prentice Hall, 2010. Print. Volumetric Vinegar Analysis Experiment 9 and 10: Volumetric/Vinegar Analysis Abstract: The goal of the experiment that was conducted was to figure out both the molar concentration of NaOH and the standard mole ratio of the NaOH solution. In order to find the concentration of the NaOH solution, volumetric analysis was used. In volumetric analysis, a titration mechanism was utilized in order to find the reaction that the base will end up having with KHC8H4O4. , also known as KHP. Phenolphthalein, which is the indicator that was used in this experiment, assisted in figuring out at exactly what point was there neutralization.The indicator turns the solution into a bright pink color once neutralization has occurred. In experiment 10, the average molarity of NaOH that was found in experiment nine was used in order to find out if the vinegar that was being used in the experiment contained around the same percent mass of acetic acid that is found in regular vinegar. The experimental value of NaOH that was used was 1. 0 425 grams and the molarity of NaOH was found to be 0. 089 m/L of NaOH. Towards the conclusion of the experiment, the average percent mass of acetic acid was calculated and found to be 1. 695%.Regular house hold vinegar’s average percent mass of acetic acid usually ranges to 4-5%. Based on the percent mass of acetic acid obtained in the experiment, the vinegar that was used in experiment 10 was clearly not house hold vinegar. The hypothesis for this experiment was, if the average percent mass of acetic acid ranged between 4-5%, then it is house hold vinegar. However, due to the results from the experiments conducted, this hypothesis was rejected. In order to obtain the results that the groups were searching for, titration was used in both experiments to find the answer.The method of titration involves the measurement of KHP and NaOH. Afterwards, the volumetric analysis was used, with the indicator included. The experiment starts by finding the measurements of KHP. The indicato r was added later on, and then the titration began with the NaOH solution. It was apparent once the solution was neutralized because the indicator caused the solution to turn bright pink. The experiment also required the utilization of volumetric mass in order to find the percent mass of acetic acid in vinegar.The mass of vinegar is then titrated along with the indicator endpoint with the sodium hydroxide solution. In order to find the average acetic percent mass of vinegar, the concentration found in NaOH in experiment 9 was utilized together with the known volume of NaOH. Materials: Please refer to Experiment 9 and 10 on pages 127-136 and 137-142, of Laboratory Manual for Principles of General chemistry 9th Edition by J. A. Beran. The only deviation that was performed during this experiment was the two to three extra drops of the indicator phenolphthalein in order to distinguish a titration point.Results: Experiment 9: Data: |Table 1: Measurement |Trial 1 |Trial 2 | |Mass of KHC8H 4O4. (g) |. 509 g |. 501 g | |Buret Reading of NaOH (mL) |28. 3 mL |26. 7 mL | Table 1 shows the measurements recorded for experiment 9, volumetric analysis Table 2: Calculations |Trial 1 |Trial 2 | |Moles of KHC8H4O4 (mol) |. 000303 |. 0002485 | |Volume of NaOH Dispensed (L) |. 0034 |. 0032 | |Molar Concentration of NaOH (mol/L) |. 089 |. 089 | Table 2 shows the calculations derived from experiment 9, volumetric analysis Calculations:Moles of KHC8H4O4 x 1 mol KHC8H4O4/ Molar Mass KHC8H4O4: 0. 089 m/L NaOH x 0. 0034 L= . 000303 moles NaOH 0. 089 m/L NaOH x 0. 0032 L= 0. 0002485 NaOH Volume of NaOH Dispensed (mL): Buret Reading of NaOH= 28. 3 mL, 26. 7 mL Molar Concentration Concentration of NaOH: 2. 45 x 10 -3 mol OH-/. 0275 L NaOH = 0. 089 M/L NaOH Results: Experiment 10 |Table 3: Measurement |Trial 1 |Trial 2 | |Mass of Vinegar (g) |1. 048 g |1. 37 g | |Buret Reading of NaOH (mL) |3. 4 mL |3. 2 mL | Table 3 shows the measurements recorded for experiment 10, vinegar analysis |Table 4: Calculations |Trial 1 |Trial 2 | |Volume of NaOH Used (mL)(L) |3. 4(. 0034) |3. 2(. 0032) | |Molar Concentration of NaOH (mol/L) (given) |0. 089 |0. 89 | |Molar Mass of Acetic Acid (g/mol) |. 0182 |. 0171 | |Mass of Acetic Acid in Vinegar (g) |1. 048 g |1. 037 g | |Avg. Percent Mass of Acetic Acid in Vinegar (%) |1. 695% | | Table 4 shows the calculations derived from experiment 10, vinegar analysis. Calculations: 1. Molar Concentration of NaOH (mol/L) Given (. M Solution) 2. Mass of Acetic Acid in Vinegar (g): Moles of Acetic Acid (mol) x Molar Mass of Acetic Acid (g/mol): 3. 026 x 10 -4moles of acetic acid x 60. 05 g/mol= . 0182 g 2. 848 x 10 -4moles of acetic acid x 60. 05 g/mol= . 0171 g 3. Avg. Percent Mass of Acid in Vinegar (%): 1. 65%+1. 74%/2= 1. 695% Discussion: The experiment began by adding NaOH to the mixture of deionized water and KHP in the beaker. The H+ ion that is found in KHP, reacted to the OH- ions that are found in the NaOH solution, even as more of the Na OH continued to be added into the mixture.When there turned out to be an abundance of NaOH, there were no longer any H+ to be added to KHP. As a solution, the extra OH-ions were found in the NaOH solution was used to make the indicator activate and make the solution turn pink. It was imperative that the solution be mixed the correct way. If it was not mixed the correct way, the results from the experiment will be inaccurate. If the reading had proven to be inaccurate because of that mistake, the volume of the NaOH solution mixed with the KHP will eventually get neutralized to a point where the numbers in the results would be very off.Two trials were done in this experiment in order to ensure that that mistake never happened and the volume of NaOH was found. Once the solution had finally been able to neutralize, the moles of the KHP were found and ended up being equal to the moles of NaOH. This information allowed for the molarity to be found. The average molarity that was in NaOH ha d been found in experiment 9, it was . 089 M. Both experiments 9 and 10 seemed to have similar traits because both of them involved titration. The titration was used in order to find the number of moles that was found in the acetic acid of the vinegar solution that was used.The normal amount of acetic acid found in household vinegar is between 4-5%. The experiments helped determine that household vinegar was definitely not the vinegar that was being used since the acetic amount that was found was 1. 695%. Conclusion The hypothesis was proven in the first experiment because the base of NaOH did end up neutralizing KHP’s acids. The indicator turned the solution pink; therefore the hypothesis in the first experiment was not rejected. The experiment involving the molarity of NaOH was very close in numbers. The molarity that was given was . 1 M, and the molarity that was found in the experiment was . 89 M. The hypothesis for the second experiment was â€Å"If the average percent mass of acetic acid ranged between 4-5%, then the vinegar that was being used for the experiment was household vinegar. † However, since the average percent mass of acetic acid resulted as 1. 695%, which was lower than household vinegar; this caused the hypothesis to be rejected. Works Cited Beran, Jo A. Laboratory Manual for Principles of General Chemistry. Hoboken, NJ: Wiley, 2011. Print. Tro, Nivaldo J. Principles of Chemistry: A Molecular Approach. Upper Saddle River, NJ: Prentice Hall, 2010. Print.

Isc English for 11 and 12 Std

In â€Å"Church Going†, the poet expresses the same disrespectfulness towards church as â€Å"In Westminster Abbey. † The Church, also known as the house of God, is seen by the poet as a current building and all being alike, â€Å"another church: matting, seats, and stone†¦ † some brass and stuff† which gives the reader a very dismissive attitude fromthe poet. He agrees with Betjeman that the church disserves no believe or respect â€Å"Hatless, I take off my cycle-clips in awkward reverence. Instead of commenting on the beauty of the church, he looks at the roof asking himself if it is â€Å"cleaned, or restored†Ã¢â‚¬  It seems that the poet is even more disrespectful than Betjeman donating an Irish sixpence and then further emphasizing, â€Å"reflect the place was not worth stopping for. † The poet is for sure that churches will fall down except for some, which will be kept as a chronic symbol where women will bring their children to touch a particular stone believing that they will work as a spell. His opinion is that â€Å"superstition, like belief, must die. This supposes a strong blow againstthe church and towards believe. Philip Larkin asks himself who will be the last to see the church before it deteriorates completely â€Å"some ruin-bibber† some â€Å"Christmas-addict† someone obsessed with church or someone just like him who has no believe or sympathy withthe church. For the poet, the church is the place of marriage, birth and death and believes that that causes people to become fanatic towards church because they see it as the place that marks the most important points of life. Larkin also sees the church trying to make people see natural things of life such as birth and having children as being in their destiny and that people will always look for the spiritual side. In conclusion, I would say that the poets are conscious of the poetic diction they use in order to bring through their feelings about the church. They do not see any reason or need for which religion and believe exist and want superstition to be gotten rid of. They see the Church as a place, which manipulates people for their own benefit. The use of less poetic devices such as â€Å"oh bomb the Germans† in â€Å"In Westminster Abbey† or â€Å"bored, uniformed, knowing the ghostly silt† in â€Å"Church Going† does not suggest that this in any way makes the poems less â€Å"poetic† in any sense at all. John Betjeman and Philip Larkin seem to be wanting the readers to be aware of the church and protect them from it. Summary: Wilfred Owen's poem â€Å"Anthem for Doomed Youth† is typical of Owen's abrupt, straightforward, and abrasive approach to describing war. Owen states in the poem's beginning that soldiers die on the battlefield as cattle in a slaughterhouse; with little meaning, and with no loved ones there to comfort them. The end of the poem is more sentimental; while no funeral takes place on the battlefield, all individuals have something resembling a funeral, even if it takes the form only of their loved ones weeping. The poem's overall tone indicates that Owen resents promoters of war who do not consider the full magnitude of war and pities the soldiers who know not what may happen to them. {draw:rect} Known for his abrasive and heart-wrenching depictions of war, Wilfred Owen is known for going right to the heart of the reader through his poetry to evoke his or her raw emotions. In the poem, â€Å"Anthem For Doomed Youth†, Owen once again finds the shortest and most abrupt and straight-forward descriptions he possibly can to describe soldiers being slaughtered on the battlefield. Not only is Owen describing their deaths, but he is describing, how they die: with indifference among them. There is no separate emotion for each man, they die all the same, like cattle going off to the slaughterhouse. The poet appears to be portraying war as a situation that one should avoid, because although one is dying for their country, initially, their death is one of little meaning. They are not among family and†¦..

Can Money Buy Happiness

In our society, people often put great emphasis on materials and possessions. Many believe that having more money would make them happier in life; but does money really provide true happiness? Having the money to provide food, clothing, and shelter is essential for everyone’s well-being and happiness, but after those basic needs are fulfilled more money just offers materials not necessarily happiness. There are many ways I think money does buy happiness. Money increases quality of life which in turn buys happiness. This is only true if one lives within his means, lives a modest life style and pursues happiness the right way. I think most people believe happiness is bought in a store. People overestimate how much pleasure they’ll get when they buy something luxurious. We really don’t need all these extravagant luxuries around us. Are they necessities to life? Are they just things to show your vanity? Or are they just trying to keep up with the Jones’s? In today's materialistic world, the phrase that ‘money can't buy happiness' is tending to be proved hence otherwise. Social research and surveys have shown results based on an individuals income, health and the political scenario which is dominant in his or her region. It is quite obvious that the gap between the privileged and the not so is growing into a great divide giving rise to different class and status, thus defining ones social circle. It should therefore be understood how an individual’s economic status affects their personal happiness throughout all aspects of life. Many tend to refer to this age-old quote especially when they tend to belong to sector of people who can't afford the modern day luxuries of life. What they do not realize is that money, might in fact do just that, buy happiness. On the other hand, those who have pockets as heavy as themselves think that money Is nothing but a burden and a complication in life, which is too networked to figure out. First of all, a comfortable life can be brought if we are rich. Nowadays, it is not uncommon to see people complain about their low standard of living. The low educated groups always have to worry about their living. They may worry about losing their jobs as they always work as low skilled workers. Their jobs are not stable at all. They may not be able to cope with their daily lives, let alone being happy. Under such circumstances, money can buy happiness. If they have got more money, they no longer have to worry all the time. The idea of money buying happiness is interesting. Yes, most people feel they do need more money to be happy, but what is that â€Å"happiness† they are speaking of? If that idea means owning newer appliances than before, then money can buy you happiness. If that idea is going out to eat dinner more often, then money can buy you happiness. But, if happiness is truly living one's life to the fullest, then money cannot buy happiness. People know that this idea of happiness is materialistic and shallow, and they are quick to point it out in others, but cannot see it in themselves. Money cannot buy happiness, unless happiness is measured by possessions. Happiness from money is very short lived. While the happiness of people who receive large sums of money might rise immediately after they receive that money, that happiness declines to only slightly above or equal to their level of happiness before the money came to them. Different people have different beliefs of what happiness really is. However, money is often the bane of happiness, as is evidenced that affluent societies are often considerably more unhappy than poorer (not necessarily poverty stricken) countries. This is a sign that too little, or too much money is not a good thing. A balance needs to be struck between earning money and more fulfilling activities. This is because happiness is not a state to be ‘achieved’ but a virtue, and all happiness is relative. Happiness is a virtue. Happiness cannot be ‘achieved’ or ‘attained’ through earning money. Money can be seen as the opposite of happiness. The rich often wield power, due to their wealth, which in turn corrupts their morals.

Telephone interview for the London Borough of Newtown Essay

Telephone interview for the London Borough of Newtown - Essay Example Through this question, it was found that almost half of the respondents; interviewed through telephone, were satisfied with the particular service of caretaking; removal of litter. The number of respondents personally satisfied was 165 (almost 62% of total respondents). On contrary, it was found that the number of respondents not personally satisfied were not far behind. The number of respondents dissatisfied with the caretaking service; removal of litter, were 99 (almost 37%). This question is an extension of the earlier question. The aim of this question is to analyze the personal level of satisfaction or dissatisfaction regarding the cleaning on bin areas. It was found through the responses that 164 of the respondents were personally satisfied with their caretaking service; cleaning of bin areas. On the other hand, only 70 of the total respondents were dissatisfied with this particular caretaking service. This question is yet another expansion of the earlier question. This question was aimed to analyze the satisfaction and dissatisfaction level of respondents regarding the maintenance of communal lighting. Through this particular question, it was found that only 72 of the respondents were personally dissatisfied with the maintenance of communal lighting; component of caretaking services. On the other hand, the number of respondents satisfied with this particular service was more than double as compared to respondents that were dissatisfied (i.e. 183), representing 69 percent of the total respondents. To further analyze the personal satisfaction and dissatisfaction level of respondents they were inquired regarding the cleaning of rubbish chute areas by the caretaking services. The responses provided by the respondents gave a lot of exposure as it was found that only 70 out of 266 respondents were highly satisfied with this service. On the other hand, it was also found that only 31 of the total respondents were

Ethical Dilemma Article Example | Topics and Well Written Essays - 750 words

Ethical Dilemma - Article Example Consequently, my aunt lost sight in her right eye. The Persons Involved The people who were involved in the entire mishap were my aunt, the surgeon who was to remove the cataract and the staff who later came following my aunt’s continuous moaning. Decisions made and the Reasons Initially, the procedure seemed to be going on as planned until my aunt started screaming and shaking in pain. It was noted that though two nurses and the surgeon had clearly checked as well as verified that indeed the bottle was filled with lidocaine, the surgeon mistakenly injected her with formaldehyde. If the government had come to discover the malpractice, they would have ended up ending their practice and leaving most of the natives without proper healthcare. Consequently, the doctors decided not to inform us of their actions, leaving us to believe that a poisonous fly had hurt my aunt’s eye. Steps to the Ethical Decision Making Process and their Effectiveness The nurses in this case failed to follow an ethical process as they were not careful enough to ensure that all medicines were labeled appropriately. Additionally, Lipe and Beasley (2004, pp. 233-234) assert that nurses owe their patients a duty of care and the truth in regard to their health, but in this case they failed. For this reason, we had to seek a different opinion from another hospital where it was reported that indeed the surgeon had administered the wrong drugs, causing blindness. What followed were lawsuits, whereby, the hospital was sued for negligence and incompetence and the nurses as well as the surgeon ended up losing their practicing license. The court ordered the defendant to compensate the complainant and ordered for the closure of the hospital. Although compensation did... Asa the discussion declares when a medical error causes a patient to lose her eyesight, the medical staff ends up being put in a complex situation. In case they publicly admit the mistake, they end up losing the trust of the people as well as their aptitude to practice medicine. However, by failing to admit their mistake, they end up lying and endangering the lives of other patients as well as bleaching their duty of care. According to the report findings the procedure seemed to be going on as planned until my aunt started screaming and shaking in pain. It was noted that though two nurses and the surgeon had clearly checked as well as verified that indeed the bottle was filled with lidocaine, the surgeon mistakenly injected her with formaldehyde. If the government had come to discover the malpractice, they would have ended up ending their practice and leaving most of the natives without proper healthcare. Consequently, the doctors decided not to inform us of their actions, leaving us to believe that a poisonous fly had hurt my aunt’s eye. The health professionals are supposed to tell the truth, since they are held to a higher standard by the public, both professionally and morally. On the same note, letting the incident go unpunished could have led to more similar incidents. In this case, the health professionals should have taken an action to tell the truth as it was the moral thing to do and o ffer advice to my aunt on an alternative measure she could undertake in order to recover her sight.

New Media communication class Final Project Essay

New Media communication class Final Project - Essay Example As such, I will analyze my notes and classify them into various categories that define their significance. Consequently, I will conduct relevant research on other examples of online ethnography and theories of computer-mediated communication prior to interpreting my notes. The research will help me to develop an opinion on the importance of online ethnography and theories of computer-mediated communication (Walther 443) and define communication in online communities (Garcia et al. 54-55). Ideally, we can refer to the online community as a virtual community that infiltrates our real life (Rheingold 1). Student room is an online community established in 2001 that promotes community and social learning among students and institutions. The online community connects students across the globe, allows young people to present their views, and helps them to prosper and make effective career and education choices. With over 500,000 posts per month and over 1.5 million members, the student room is the most dominant and diverse student community in the globe (Autism Education Trust 1). Indeed, the members of the student room online community originate from different cultures and address academic, health, and social issues (Autism Education Trust 1). Subject to the adopted simple platform, student room encourages new members to join and fosters interactions between members of different cultures. With the growth in mobile telephony, online ethnography and theories of computer-medi ated communication will continue to define communication in online communities. Notably, online ethnography will define the customs of the student room online community. Ideally, ethnography refers to a detailed analysis of the social and cultural aspects of a specific group (Koning and Ooi 19). As such, online ethnography involves the adoption of relevant online research methods that

Journalism - The Culture and Civiliztion tradition and the Frankfurt Essay

Journalism - The Culture and Civiliztion tradition and the Frankfurt School agree that mass culture is bad for us but for different reasons. Discuss - Essay Example Both the Frankfurt School and the Culture and Civilization tradition put forward the same point that mass culture is not good for us but they presented different reasons to support their views. The Frankfurt school is not supportive of mass culture because it puts forward the opinion that mass culture gives way to capitalism. According to this thought mass culture only puts forward the opinion and the culture of the people who are politically dominant and imposes this upon the people who are less powerful and the minorities. It explains that mass culture is the culture that is the ways and the methods adopted by the people who are politically powerful or financially stronger. These ways are then enforced upon the working class that is the people who are weak so that the power of the already powerful remains intact (Nealon & IRR 2002). The Frankfurt school claims that mass culture depoliticizes the lower class. The Frankfurt school suggests that with new technologies men have been replaced with machinery and there is more leisure time and hence more exposure so there is greater spread of mass culture and hence there is greater oppression and suppression of the working class . according to this thought mass culture destroys individuality and diminishes the creativity and thoughts of an individual by enforcing upon everyone the thoughts of the popular masses (Storey 1998,2001). Adorno who is a prominent thinker of the Frankfurt school writes in his book Dialectic of Enlightment: â€Å"The purity of bourgeois art, which hypostatized itself as a world of freedom in contrast to what was happening in the material world, was from the beginning bought with the exclusion of the lower classes - with whose cause, the real universality, art keeps faith precisely by its freedom from the ends of false universality† (Adorno, Horkheimer & Cumming 1979, p 120-167). Although the culture and civilization tradition is also against mass culture but it puts forward different

Personnel Hazards of Dry Chemical Systems Essay Example | Topics and Well Written Essays - 250 words

Personnel Hazards of Dry Chemical Systems - Essay Example Dry chemical systems that include mica, clay and amorphous silica can contain small quantities of quartz or crystalline silica. Inhalation above the exposure limits (about 3 mg/m3) and prolonged respiratory exposure can increase the possibility of developing a disabling disease called as silicosis. The condition induces inflammation and scarring of nodular lobes in the lungs. It can induce chronic coughing and fever. Deposits of crystalline silica were also identified as carcinogenic to the human body though this is yet subject to further verification. Decompositions of compounds also include hazardous products such as ammonia, carbon oxides and phosphorous oxides. These can induce negative health effects such as fever and respiratory problems. Dry chemical compounds are also extremely corrosive and abrasive to metals indicating that it can also cause skin diseases like dermatitis and other complications to eyes and other parts of the body. However, many dry chemicals in the market do not require extensive protective equipment especially in local applications. There is also the possibility of explosion of pressurized containers though this is quite unusual but possible. (Acme Fire, 2007)

LITERATURE AND MEDICINE Essay Example | Topics and Well Written Essays - 1500 words

LITERATURE AND MEDICINE - Essay Example J. Cronin in â€Å"Citadel† remain relevant in terms of the medical service that is available to the citizens of the United Kingdom. The excerpt for the book under evaluation is a discussion between Manson and his wife Christine regarding Manson’s intentions to change from his current mode of general practice and start a fresh initiative in providing medical service by combining the strengths of his experience as a general practitioner with those of a surgeon (Denny) and a bacteriologist (Hope). Manson goes on to justify this decision of his to his wife in the benefit that such an initiative would deliver in the form of â€Å"pooling† the knowledge that each of these specialties in medicine would offer. Such a â€Å"pooling† of knowledge would be of benefit in patient care to provide better outcomes. The existing system of medical care was in the form of the general practitioner carrying out all these responsibilities, even in specialized areas with a limited amount of knowledge, to the detriment of patient care. Manson suggests that this association of specialties into what he calls â€Å"G roup medicine† provides a â€Å"perfect answer† to the near impossible tasks that a general practitioner had to perform in patient care. Such â€Å"Group medicine would be the intermediary fresh breath of air between the monolithic state medical service and the individual effort of practitioners in several parts of the country. Manson clarifies that such Group medicine had failed to materialize only because of the attitude of those in the medical science power centers not wanting any rocking of the boat so that they would remain in control in the provision of medical services to the people. Manson believes that such an effort in Group medicine by the scientifically oriented unit would revolutionize the manner in which medical services are provided and remove the prejudices and ills that plague the medical system. There are three themes

Ethics and Professional Responsibilities Essay Example | Topics and Well Written Essays - 250 words

Ethics and Professional Responsibilities - Essay Example This is because they may result in to severe consequences if not well checked. Therefore the moral obligation to consider the consequences of their actions or decisions lies with the engineers themselves. Whenever a safety problem occurs or during a disaster recovery, any concern noted by engineers should get reported to the relevant authority to enable investigation and subsequent response to the problem. This has often been a challenge especially when one feels they may be blacklisted or fired. However, it is ethical and moral standards that an individual engineer has that will bring a difference when such situations arise (Jr, Pritchard, Rabins, James, & Englehardt, 2013). When an issue of concern is not reported due to fear of having one’s job in the line, the consequences that may arise could be very dire not only to those in the surrounding but also to the engineers who engage in the given activity. Therefore, it is important for engineering students to have ethics as a part of the curriculum so that they are prepared to make decisive decisions in their professional careers. This will enable presentation of code of ethics to the profession of engineers saving the world from the unforeseen misfortunes that may result from unethical practices in this profession ( Jr, Pritchard, Rabins, James, & Englehardt,

Sexually transmitted diseases Essay Example | Topics and Well Written Essays - 1250 words

Sexually transmitted diseases - Essay Example The foremost factor that contributes to the pending problem is that people are not knowledgeable about the dangers and risks of sexually transmitted diseases. In-depth awareness of the causes, risks, and effects of STDs is clearly lacking in the public. Such lack of awareness is evident in the lifestyle that many Americans live today. Although people may have realized the need for safe sex, they continue to be uninformed about the other ways by which they can contract sexually transmitted diseases. Increasing awareness regarding sexually transmitted diseases has become a growing concern in today's society. Various means of educating the public have been continuously been explored. However, the most important public information source has yet to be fully utilized, the media. The media in the modern times has served as the primary means people gain knowledge about the various issues that are present in society. It is from the media that people get information about current issues ranging from politics, global affairs, economics, and public health. The media is the information resource that has the most extensive reach. Moreover, the influence of media in the lives of people is vast. It can sway public opinion towards one side. (Stoughton) With such great influence over public perception and opinion, media can easily promote awareness regarding important issues such as STDs just as it promotes awareness regarding violence so easily. This paper will discuss the role of one form of media, newspaper, in increasing the public's knowledge and awareness regarding sexually transmitted diseases. New articles found in the nationally-circulated newspapers that tackle the issue of STDs will be analyzed to determine the extent to which the issue is discussed. Furthermore, past researches and studies will likewise be reviewed. The primary objective of this study will be to determine the extent to which print news media informs the public regarding sexually transmitted diseases. Review of Related Literature In this section, previous studies will be discussed to determine what their findings suggest about the coverage that the subject of STDs receives from print news media. Also, news articles from nationally-circulated newspapers will be analyzed to ascertain whether sexually transmitted diseases received ample substantive news reporting from the newspapers. Furthermore, this section will discuss how print new media reports STDs to the public and whether such kind of reporting contributes to increasing the awareness of the public significantly regarding the problem. A study conducted by Davidson and Wallack (2004) involved a content analysis of articles from the leading American newspapers to determine the type of new coverage that print media outlets gave to the issue of sexually transmitted diseases. The results of the study revealed a lack of substantive reporting on the subject of sexually transmitted diseases. Davidson and Wallack found that less that one-fourth of the articles they reviewed contained anything that pertains to the causes, consequences, prevention, signs, or symptoms, screening, transmission, treatment, trends or rates of STDs. (2004). Most of the articles contained statistical information regarding sexually transmitted diseases. According to Davidson and Wallack (2004), statistical information may be what journalists perceive as newsworthy about STDs; journalists report that they are

Warrants Essay Example for Free

Warrants Essay The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized. (1) These words of the Fourth Amendment give the people protection against unnecessary harassment by local, state and federal law enforcements. Authorities have to go through a process to acquire a warrant to search homes, papers, effects and persons with probable cause. However, there is a rationale for a warrantless search. This poses the questions: What is the rationale for allowing warrantless searches, are those reasons persuasive and do all such searches require that probable cause exist or are there exceptions? The definition of a warrant is a writ permitting or directing someone to take some action. Often, the term refers to a writ from a judge; permitting law enforcement personnel to take some action, such as: make an arrest, search a location, or seize some piece of property. (1) There are many different types of warrants. Some include: a search warrant, an arrest warrant, an anticipatory warrant, and a no-knock warrant. A Search Warrant is an order signed by a judge that directs owners of private property to allow the police to enter and search for items named in the warrant. Judges wont issue a warrant unless they have been convinced by the police that there is probable cause for the search that reliable evidence shows that its more likely than not that a crime has occurred and that the items sought by the police are connected with it and will be found at the location named in the warrant. In limited situations, the police may search without a warrant, but they cannot use what they find at trial if the defense can show that they had no probable cause for the search. An Arrest Warrant is a document issued by a judge or magistrate that authorizes the police to arrest someone. Warrants are issued when law enforcement personnel present evidence to judges or magistrates that convince them that it is reasonably likely that a crime has taken place and that the person to be named in the warrant is criminally responsible for that crime. An Anticipatory Warrant is a warrant that is based on an affidavit that shows probable cause that evidence of a particular crime will be at a specified location at some time in the future. A No-Knock Warrant is a search warrant authorizing police officers to enter certain premises without first knocking and announcing their presence or purpose prior to entering the premises. (2) Each of these warrants must first be approved by a judge or a magistrate and must meet certain requirements. The authorities must go through a process to obtain a warrant. Only judges may issue search warrants. Search warrants must be specific and reasonable before they are granted by the judge in a court of law. To obtain a warrant, law enforcement officers must show that there is probable cause to believe a search is justified. Probable cause is the amount and quality of information police must have before they can search or arrest without a warrant. (3) Some of the specifics they must include are of the following: If one room of a house is listed on the search warrant than only that room can be searched. If other rooms need to be searched than another warrant must be obtained by law enforcement officials. If a vehicle needs to be searched on a property, a separate warrant needs to be obtained for the vehicle. And the warrant must be of reasonable inclusivity. (2) If these requirements are not met, then the judge will not grant the warrant. Courts use a reasonableness test when considering whether a search violates the federal Constitution. This reasonableness test preempts other state and federal laws. If a â€Å"no-knock† entry is unreasonable at the time police execute a search warrant, they must â€Å"knock and announce† their presence, even if they have a no-knock warrant. 4) This is where the Exclusionary Rule comes into play. The exclusionary rule prevents the government from using most evidence gathered in violation of the United States Constitution. It applies to evidence gained from an unreasonable search or seizure in violation of the Fourth Amendment. It is defined as a rule of evidence that disallows the use of illegally obtained evidence in criminal trials. (4) Warrants must be issued before authorities can search and seize property and if they do not obtain a warrant first they are violating a person’s Miranda Rights. Although in most cases a warrant is required, there are a few situations in which there are exceptions to needing probable cause for a warrant. A warrant is not needed is in a time of consent. If a police officer stops you and you consent to allowing him to search your car, a warrant is not needed. If anything illegal is found on you or on your property then those items can be confiscated and you can be arrested. Another time is when illegal items are in plain view of an officer during a traffic stop or during a routine police procedure. Items in plain view can be drugs, weapons, or stolen goods. However, plain view only comes into effect when the officer is lawfully on the premises. During a traffic stop, if a police officer arrests the driver of a vehicle, they are then allowed to search the car and its compartments for contraband and weapons without a search warrant. When a person is arrested in their house or their office building the officer is allowed to legally search the room that they arrested the suspect in and perform a protective sweep of the building to check if there are other people hiding in the building. And most importantly, a search can be conducted without a search warrant when police officers feel that the public is in danger during any emergency situations. (2) When driving onto a military base there is a clear sign that states the standing warrant that if you pass through the gates you are consenting to allowing the Military Police search your car if they feel the need to. And when you drive onto a base you are guaranteed to see at least one random car search every time. Not every situation calls for a warrant needed to search homes, papers, effects and persons with probable cause. Law enforcement is required to obtain a warrant issued by a magistrate or a judge in a court of law. If said warrant is not issued and authorities still search you, all evidence they find will be thrown out. However, there are certain terms in which a warrant is not required. The words of the Fourth Amendment give the people protection against unnecessary harassment by local, state and federal law enforcements.

Over View Marketing Of Products Within Nestle Marketing Essay

Over View Marketing Of Products Within Nestle Marketing Essay To pose Nestlà © product against the competitors, the company will be using differentiation strategy which will not only differentiate their own from others but also give an edge over others. Nestlà © core products will be very beneficial especially in terms of quality, health, and hygiene and most important consumer satisfaction. Nestlà © augmented products will include consumer satisfaction, warranty to retailers in terms of expire, delivery and after sales services. The companies all over the world get some competitive edge based on some features which other companies dont have. For example, as the Dell has the competitive edge over other computer manufacturer companies, because they use built-to-order Strategy while no other company in computer industry use this strategy. Similarly in Pakistan nestle has their competitive edge based on the strategies like product differentiation and customer oriented. Nestlà © is using the product differentiation strategy by providing the superior quality products. Their main focus is to keep the customers loyal. They bought shelve space in different departmental stores to attract the customers. They tried to reach each group of people in which they have succeeded. Besides, customer satisfaction is the focal point for the company. They provide hygienic products to their customers. Products are also verified by health and safety measures and international quality standards. Porter Five Forces 3.1.1 Threat of New Entrants: There is big number of food companies in the world; meanwhile the competitive between food companies are happened. Some companies have carved out role in which they support to dairy supply. These food companies are fearful of being squeezed out by the big players. Another threat for many food companies is other food services companies entering the market.15 Competing in a new industry requires resources to invest. Production of packed products requires huge investment of financial, human, technical, and marketing resources. Bargaining Power of Suppliers: The suppliers of food might not pose a big threat, because of the number of suppliers. Raw milk is standard commodity and is available in the open market from a large number of milkmen. If anyone refuses to sell its product then company can buy it from others who are already willing to sell to company. On the other hand, the importance of volume to supplier also considered as a threat. Suppliers also have less leverage to bargain over price because the company is purchasing the large volume of their milk and suppliers dont have much option to sell milk to others. Bargaining Power of Buyers   The buyers will not post much of a threat to the food industry. Large clients have their own bargaining power with food companies. Large corporate clients like airlines and retailers pay millions of dollars a year. There are large numbers of distributors, who are buying and distributing the product, so their bargaining power is low and company have leverage to dictate implement its terms and conditions to distributors. Availability of Substitute   There are few of substitutes in the food industry. Most of the food companies have similar suites of services. Companies focusing on their role usually have a competitive advantage, but this advantage depends on whether there are any barriers that preventing other firms from entering.15 Competitive Rivalry The food industry is highly competitive in nowadays. As a result, food industry has become more like a commodity, an area in which the food company with the low cost structure, greater efficiency and better customer service will beat out competitors. In long run, larger companies prefer to take over or merge with other companies rather than spend the money to market and advertise to people.15 Source of Cost Efficiency 3.2.1 Economy of scale Economy of scale determines cost efficiency based on time, and processing of the operations and labour cost. Nestlà © used new high-technology system machines to process all the products, like high-speed bottling system, packaging machine for increasing the output of the products so, it could save time of the operation in process, and save labour cost. The company do not need to hire more labour to operate the process, which is one of the key to save cost. 3.2.2 Experience Nestlà © has been serving Pakistani consumers since 1988, when parent company, the Switzerland-based Nestlà © SA, first acquired a share in Milkpak Ltd. Today Nestlà © is fully integrated in Pakistani life, and is recognized as the producer of safe, nutritious and tasty food, and leaders in developing and uplifting the communities in which they operate. Nestlà © Pakistan ensures that their products are made available to consumers wherever in the country they might be. Convenience is at the heart of the Nestlà © philosophy, and there aim is to bring products to peoples doorsteps. Resources 3.3.1 Tangible resources Nestlà © Milkpak produces in over 81 countries and achieves 98% of its turnover outside Europe. Nestlà © Milkpak is the worlds largest milk company, which does 98% of its business. It has an annual turnover of 70 billion Swiss francs, 522 new factories in 81 countries, 200 operating companies, 1 basic research outer and 20 technological development groups, has more than 231,000 employees and more than 8000 products around the globe. There are three companies co-ordinate the activities of some 200 operating companies around the globe. Intangible resources There are three different functions, Nestlà © Milkpak, holds the financial shares in the allied companies. It also checks the profitability of these companies and to ensure the profitability of the group as whole. Second, Nestlà © Milkpak, has two areas of activities that are research and technological development, and technical assistance. Beside this, it provides know-how in engineering, marketing, production, organization, management and personnel training on a continuous basis. The third company is Nestlà © World Trade Corporation that oversees the import and export of merchandise worldwide. 3.4 BCG Matrix Relative Market Growth Low High STAR (Growth) QUESTION MARKS (Introduction) CASH COWS (Maturity) DOGS (Decline) 3.4.1 Stars The stars are the high relative market share and high market growth. Nestlà © beverages are the stars in their business, because with the high quality and new designs which comes every now and then makes them more popular among the customers, because customer with upper class wants the quality and nestle offers the best quality food items. Besides, Nestlà © major products such as Nestlà © milk pack and Nestlà © water will lies in the category of star products, due to the needs of human in their life. 3.4.2 Question Marks The product which have high anticipated growth rate but low market share would be considered as question marks. The product which the company launch first time in Pakistan is Nestlà © Ice-cream would come under the question marks due to the unknown result whether successful or failed in the growth of business in future. 3.4.3 Cash Cows The cash cows are Nestlà © cereal and other baby food products. There is less competitive brand on these specific of products and Nestle was considered as a branded and reliable brand, so most of the consumers prefer to buy from Nestle. 3.4.4 Dogs The pharmaceutical products are Nestlà © Dog; because it has low-share business with low growth market especially when talk about Pakistani market. The company has to think on what it can do by improving the low share and growth market. 3.5 Product Life Cycle ` Nestlà © Nestlà © Cereal Baby Food Nestlà © Food items pharmaceutical product (e.g. Milk pack and water) Nestlà © Ice-Cream INTRODUCTION GROWTH MATURITY DECLINE Product Development Time Nestlà © Products Nestlà © Milkpak Industry The product life cycle has been used to analyse the products development refer by the BCG matrix. Product life cycle has 4 stages consist of introduction, growth, maturity and decline. Nestlà © Ice-cream has been stated on the introduction stage because it is launched the first time in Pakistan. Next, the growth stage would be the food items like milk pack, water and etc, due to human need as Nestlà © has provided. On the other hand, Nestlà © cereal and baby food were stated in the maturity stage, due to less competitors. Lastly, Nestlà © pharmaceutical product is on the decline stage, because of the low share in business and low demand. In the product life cycle, it shows that Nestlà © Milkpak industry is now on the maturity stage, the company has been recognized by consumers. 3.6 SWOT Analysis (TOW Matrix) SWOT Analysis (TOW Matrix) Strengths Worldwide fame of Nestlà ©. Efficient milk collection system. Keeping high quality standards. Integrated distribution and warehousing facilities. Large market share of innovative. Having Good reputation in the market by strong brand name i.e. Nestlà ©. Strong RD. Weaknesses Unable to compete in price sensitive segment of UHT milk market. Under-utilization of the capacity. Unable to fulfil the demand of local powder milk market. Opportunities Improving Economy. Population growth rate. High urbanization rate. High literacy rate. Flexible government policies for food industry. Have significant growth opportunities. May merge with other global businesses to eliminate competitors. Having Capable of expanding into other markets of the world. SO Increase production of quality milk to cater the unsatisfied demand. They should go in the product line of powdered milk. They should increase their exports. They should cater the wide range of unsatisfied demand by improving their distribution networks. WO As per the increase demand of the milk they should fulfill the demand as Nestlà © have the ability to expand. They should make a strong distribution system to cater to avail the full benefit of the growing market. They should adopt affective marketing strategies for the promotion of their product. Threats High inflation rate. Low purchasing power. Decrease in GDP growth rate. Increasing interest rates. Recessionary period in business cycle. Competition with the new entrants. ST Invest more on the dairy product line as there is still a large chunk of the market which require modernization. Introduce new technology for quality assurance and better productivity. WT The co-ordination between different departments should be improved it will lessen the bureaucratic cost and increase the efficiency of the company.

Concepts of Project Finance

Concepts of Project Finance Introduction Project Finance. Origins of project finance Project financing is generally sought for infrastructure related projects. Its linkages to the economy are mutiple and complex, because it affects production and consumption directly, creates negative and positive externalities, and involves large flow of expenditure. Prior to World War I, private entrepreneurs built major infrastructure projects all over the world. During the 19th century ambitious projects such as the suez canal and the Trans-Siberian Railway were constructed, financed and owned by private companies. However the private sector entrepreneur disappeared after world War I and as colonial powers lost control, new governments financed infrastructure projects through public sector borrowing. The state and the public utility organizations became the main clients in the commissioning of public works, which were then paid for out of general taxation. After World War II, most infrastructure projects in industrialized countries were built under the supervision of the state and were funded from the respective budgetary resources of sovereign borrowings. This traditional approach of government in identifying needs, setting policy and procuring infrastructure was by and large followed by developing countries, with the public finance being supported by bond instruments or direct sovereign loans by such organizations as the world Bank, the Asian Development Bank and the International Monetary Fund. Development In the early 1980s The convergence of a number of factors by the early 1980s led to the search for alternative ways to develop and finance infrastructure projects around the world. These factors include: Continued population and economic growth meant that the need for additional infrastructure- roads, power plants, and water-treatment plants-continued to grow. The debt crisis meant that many countries had less borrowing capacity and fewer budgetary resources to finance badly needed projects; compelling them to look to the private sector for investors for projects which in the past would have been constructed and operated in the public sector Major international contracting firms, which in the mid-1970s had been kept busy, particularly in the oil rich Middle East, were, by the early 1980s, facing a significant downturn in business and looking for creative ways to promote additional projects. Competition for global markets among major equipment suppliers and operators led them to become promoters of projects to enable them to sell their products or services. Outright privatization was not acceptable in some countries or appropriate in some sectors for political or strategic reasons and governments were reluctant to relinquish total control of what maybe regarded as state assets. During the 1980s, as a number of governments, as well as international lending institutions, became increasingly interested in promoting the development for the private sector, and the discipline imposed by its profit motive, to enhance the efficiency and productivity of what had previously been considered public sector services. It is now increasingly recognized that private sector can play a dynamic role in accelerating growth and development. Many countries are encouraging direct private sector involvement and making strong efforts to attract new money through new project financing techniques. Such encouragement is not borne solely out of the need for additional financing, but it has been recognized that the private sector involvement can bring with it the ability to implement projects in a shorter time, the expectation of more efficient operation, better management and higher technical capability and, in some cases, the introduction of an element of competition into monopolistic structures. However, the private sector, driven by commercial objectives, would not want to take up any project whose returns are not consumerate with the risks. Infrastructure projects typically have a long gestation period and returns are uncertain. What then are the incentives of private capital providers to participate in infrastructure projects, which are fraught with huge risks? Project finance provides satisfactory answers to these questions. Project finance is typically defined as limited or non-recourse financing of a new project through separate incorporation of vehicle or Project Company. Project financing involves non-recourse financing of the development and construction of a particular project in which the lender looks principally to the revenues expected to be generated by the project for the repayment of its loan and to the assets of the project as collateral for its loan rather than to the general credit of the project sponsor. In other words the lenders finance the project looking at the creditworthiness of the project, not the creditworthiness of the borrowing party. Project Financing discipline includes understanding the rationale for project financing, how to prepare the financial plan, assess the risk, design the financing mix, and raise the funds. A knowledge base is required regarding the design of contractual arrangements to support project financing; issues fior the host government legislative provisions, public/private infrastructure partnerships, public/private financing structures; credit requirements of lenders, and how to determine the projects borrowing capacity; how to prepare cash flow projections and use them to measure expected rates of return; tax and accounting considerations; and analytical techniques to validate the projects feasibility. Traditional finance is corporate finance, where the primary source of repayment for investor and creditors is the sponsoring company, backed by its entire balance sheet, not the project alone. Although creditors will usually still seek to assure themselves of economic viability of the project being financed so that it is not a drain on the corporate sponsors existing pool of assets, an important influence on their credit decision is the overall strength of the sponsors balance sheet, as well as their business reputation. If the project fails, lenders do not necessarily suffer, as long as the company owning the project remains financially viable. Corporate finance is often used for shorter, less capital-intensive projects that do not warrant outside financing. The company borrows funds to construct a new facility and guarantees to repay the lenders from its available operating income and its base of assets. However private companies avoid this option, as it strains their balance sheets and capacity, and limits their potential participation in future projects. Project financing is different from traditional forms of finance because the financier principally looks to the assets and revenue of the project in order to secure and service the loan. In project finance a team or consortium of private firms establishes a new project company to build, own and operate a separate infrastructure project. The new project company to build own and operate a separate infrastructure project. The new project company is capitalized with equity contributions from each of the sponsors. In contrast to an ordinary borrowing situation, in a project financing the financier usually has little or no recourse to the non-project assets of the borrower or the sponsors of the project. The project is not reflected in the sponsors balance sheets. Extent of recourse Recourse refers to the right to claim a refund from another party, which has handled a bill at an earlier stage. The extent of recourse refers to the range of reliance on sponsors and other project participants for enhancement to protect against certain projects risks. In project financing there is limited or no recourse. Non-recourse project finance is an arrangement under which investors and credit financing the project do not have any direct recourse to the sponsors. In other words, the lender is not permitted to request repayment from the parent company if borrower fails to meet its payment obligation. Although creditors security will include the assets being financed, lenders rely on the operating cash flow generated from those assets for repayment. When the project has assured cash flows in the form of a reliable off taker and well-allocated construction and operating risks, the lenders are comfortable with non-recourse financing. Lenders prefer limited recourse when the project has significantly higher risks. Limited recourse project finance permits creditors and investors some recourse to the sponsors. This frequently takes the form of a precompletion guarantee during a projects construction period, or other assurance of some form of support for the project. In most developing market projects and in other projects with significant construction risk, project finance is generally of the limited recourse type. Merits and Demerits of Project Financing: Project financing is continuously used as a financing method in capital-intensive industries for projects requiring large investments of funds, such as the construction of power plants, pipelines, transportation systems, mining facilities, industrial facilities and heavy manufacturing plants. The sponsors of such projects frequently are not sufficiently creditworthy ot obtain tr5aditional financing or unwilling to take the risk and assume the debt obligation associated with traditional financing. Project financing permits the risk associated with such projects to be allocated among number of parties at levels acceptable to each party. The advantages of project financing are as follows: 1. Non-recourse: The typical project financing involves a loan to enable the sponsor to construct a project where the loan is completely â€Å"Non-recourse† to the s[sponsor i.e. the sponsor has no obligation to make payments on the project loan if revenues generated by the project are insufficient to cover the principle and interest payable on the loan. This safeguards the assets of sponsors. The risks of new projects remain separate from the existing business. 2. Maximizes leverage: In project financing. The sponsors typically seek to finance the cost of development and construction of project on highly leverage basis. Frequently such costs are financed using 80 to 100 percent debt. High leverage in an non recourse financing permits a sponsor to put less in funds at risk, permits a sponsor to finance a project without diluting its equity investment in the project and in certain circumstances, also may permit reduction in cost of capital by substituting lower cost, tax deductible interest for higher cost, taxable return on equity. 3. Off balance sheet treatment: Depending upon the structure of project financing the project sponsors may not be required to report any of the project debt on its balance sheet because such debt is non recourse or of limited recourse to the sponsor. Off balance sheet treatment can have the added practical benefit of helping the sponsor comply with convenient and restrictions related to the board. Borrowings funds contain in other indentures and credit agreements to which the sponsor is a party. 4. Maximizes tax benefits: Project finance is generally structured to maximize tax benefit and to assure that all available tax benefit are used by the sponsors or transferred to the extent possible to another party through a partnership, lease or vehicle. 5. Diversifies risk: By allocating the risk and financing need of the projects among a group of interested parties or sponsors, project financing makes it possible to undertake project that would be too large or would pose too great a risk for one party ion its own. Demerits: 1. Complexity of risk allocation: Project financing is complex transaction involving many participants with diverse interest. If a project is to be successful risk must be allocated among the participants in an economically efficient way. However, there is necessary tension between the participants. For e.g between the lender and the sponsor regarding the degree of recourse, between the sponsor and contractor regarding the nature of guarantees., etc which may slow down the realization of the project. 2. Increase transaction cost: It involves higher transaction costs compared to other types of transactions, because it requires an expensive and time-consuming due diligence conducted by the lenders lawyer, the independent engineers etc., since the documentation is usually complex and lengthy. 3. Higher interest rates and fees: The interest rates and fees charged in project financing are higher than on direct loan made to the project sponsor since the lender takes on more risk. 4. Lender supervision: In accordance with a higher risk taken in project financing the lender imposes a greater supervion on the mangement and operation of the project to make sure that the project success is not impaired. The degree of lender supervision will usually result into higher costs which will typically have to be borne by the sponsor. Whether expanding manufacturing facilities, implementing new processing capabilities, or leveraging existing assets in new markets, innovative financing is often at the core of long-term projects to transform a companys operations. Akin to the underlying corporate transformation, the challenge with innovative financial structures such as project finance is that the investment is made upfront while the anticipated benefits of the initiative are realized years later. There has been a rise in number of companies that need innovative financing to satisfy their capital needs, in a significant number of instances they have viable goals but find that traditional lenders are unable to understand their initiatives. And so the need emerged for project finance. Project financing is a specialized form of financing that may offer some cost advantages when very large amounts of capital are involved It can be tricky to structure, and is usually limited to projects where a good cash flow is anticipated. Project finance can be defined as: financing of an industrial (or infrastructure) project with myriad capital needs, usually based on non-recourse or limited recourse structures, where project debt and equity (and potentially leases) used to finance the project are paid back from the cash flow generated by the project, with the projects assets, rights and interests held as collateral. In other words, its an incredibly flexible and comprehensive financing solution that demands a long-term lending approach not typical in todays market place. Whether expanding manufacturing facilities, implementing new processing capabilities, or leveraging existing assets in new markets, innovative financing is often at the core of long-term projects to transform a companys operations. Akin to the underlying corporate transformation, the challenge with innovative financial structures such as project finance is that the investment is made upfront while the anticipated benefits of the initiative are realized years later. Infrastructure is the backbone of any economy and the key to achieving rapid sustainable rate of economic development and competitive advantage. Realizing its importance governments commit substantial portions of their resources for development of the infrastructure sector. As more projects emerge getting them financed will continue to require a balance between equity and debt. With infrastructure stocks and bonds being traded in the markets around the world, the traditionalist face change. A country on the crest of change is India. Unlike many developing countries India has developed judicial framework of trust laws, company laws and contract laws necessary for project finance to flourish. Types of Project Finance Build Operate Transfer (BOT) Build Own Operate Transfer (BOOT) Build Own Operate (BOO) Build Operate Transfer Build operate transfer is a project financing and operating approach that has found an application in recent years primarily in the area of infrastructure privatization in the developing countries. It enables direct private sector investment in large scale infrastructure projects. In BOT the private contractor constructs and operates the facility for a specified period. The public agency pays the contractor a fee, which may be a fixed sum, linked to output or, more likely, a combination of the two. The fee will cover the operators fixed and variable costs, including recovery of the capital invested by the contractor. In this case, ownership of the facility rests with the public agency. The theory of BOT is as follows:- BUILD A private company (or consortium) agrees with a government to invest in a public infrastructure project. The company then secures their own financing to construct the project. Operate The private developer then operates, maintains, and manages the facility for a agreed concession period and recoups their investment through charges or tolls. Transfer- After the concessionary period the company transfers ownership and operation of the facility to the government or relevant state authority. In a BOT arrangement, the private sector designs and builds the infrastructure, finances its construction and operates and maintains it over a period, often as long as 20 or 30 years. This period is referred to as the â€Å"concession† period. In short, under a BOT structure, a government typically grants a concession to a project company under which the project company has the right to build and operate a facility. The project company borrows from the lending institutions in order to finance the construction of the facility. The loans are repaid from â€Å"tariffs† paid by the government under the off take agreement during the life of the concession. At the end of the concession period the facility is usually transferred back to the government. Advantages The Government gets the benefit of the private sector to mobilize finance and to use the best management skills in the construction, operation and maintenance of the project. The private participation also ensures efficiency and quality by using the best equipment. BOT provides a mechanism and incentives for enterprises to improve efficiency through performance-based contracts and output-oriented targets The projects are conducted in a fully competitive bidding situation and are thus completed at the lowest possible cost. The risks of the project are shared by the private sector Disadvantages There is a profit element in the equity portion of the financing, which is higher than the debt cost. This is the price paid for passing of the risk to the private sector It may take a long time and considerable up front expenses to prepare and close a BOT financing deal as it involves multiple entities and requires a relatively complicated legal and institutional framework. There the BOT may not be suitable for small projects It may take time to develop the necessary institutional capacity to ensure that the full benefits of BOT are realized, such as development and enforcement of transparent and fair bidding and evaluation procedures and the resolution of potential disputes during implementation. Build Own Operate Transfer (BOOT) A BOOT funding model involves a single organization, or consortium (BOOT provider) who designs, builds, funds, owns and operates the scheme for a defined period of time and then transfers this ownership across to a agreed party. BOOT projects are a way for governments to bundle together the design and construction, finance, operations and maintenance and potentially marketing and customer interface aspects of a project and let these as a package to a single private sector service provider. The asset is transferred back to the government after the concession period at little or no cost. The Components of BOOT. B for Build The concession grants the promoter the right to design, construct, and finance the project. A construction contract will be required between the promoter and a contractor. The contract is often among the most difficult to negotiate in a BOOT project because of the conflict that increasingly arises between the promoter, the contractor responsible for building the facility and those financing its construction. Banks and other providers of funds want to be sure that the commercial terms of the construction contract are reasonable and that the construction risk is placed as far as possible on the contractors. The contractor undertakes responsibility for constructing the asset and is expected to build the project on time, within budget and according to a clear specification and to warrant that the asset will perform its design function. Typically this is done by way of a lump-sum turnkey contract. O for Own The concession from the state provides concessionaire to own, or at least possess, the assets that are to be built and to operate them for a period of time: the life of the concession. The concession agreement between the state and the concessionaire will define the extent to which ownership, and its associated attributes of possession and control, of the assets lies with the concessionaire. O for Operate An operator assumes the responsibility for maintaining the facilitys assets and the operating them on the basis that maximizes the profit or minimizes the cost on behalf of the concessionaire and, like the contractor undertaking construction and be a shareholder in the project company. The operator is s often an independent through the promoter company. T for Transfer This relates to a change in ownership of the assets that occurs at the end of the concession period, when the concession assets revert to the government grantor. The transfer may be at book value or no value and may occur earlier in the event of failure of concessionaire. Stages of Boot Project Build Design Manage project implementation Carry out procurement Finance Construct Own Hold in interest under concession Operates Mange and operate facility Carry out maintenance Deliver products/services Receive payment for product/ service Transfer Hand over project in operating condition at the end of concession period Advantages The majority of construction and long term risk can be transferred onto the BOOT provider. The BOOT operator can claim depreciation on the facility constructed and depreciation being a tax-deductible expense shareholder returns are maximized. Using an output based purchasing model, the tender process will encourage maximum innovations allowing the most efficient designs to be explored for the scheme. This process may also be built into more traditional tendering processes. Accountability for the asset design, construction and service delivery is very high given that if the performance targets are not met, the operator stands to lose a portion of capital expenditure, capital profit, operating expenditure and operating profit. Boot operators are experienced with management and operation of infrastructure assets and bring these skills to scheme. Corporate structuring issues and costs are minimal within a BOOT model, as project funding, ownership and operation are the responsibility of the BOOT operator. These costs will however be built into the BOOT project pricing. Disadvantages Boot is likely to result in higher cost of the product/ service for the end user. This is a result of the BOOT provider incurring the risks associated with 100 percnet financing of the scheme and the acceptance of the ongoing maintenance liabilities. Users may have a negative reaction to private sector involvement in the scheme, particularly if the private sector is an overseas owned company Management and monitoring of the service level agreement with the BOOT operators can be time consuming and resource hungry. Procedures need to be in place to allow users to assess service performance and penalize the BOOT operator where necessary. A rigorous selection process is required when selecting a boot partner. Users need to be confident that the BOOT operator is financially secure and sufficiently committed to the market prior to considering their bid. Build Own Operate In BOO, the concessionaire constructs the facility and then operates it on behalf of the public agency. The initial operating period {over which the capital cost will be recovered} is defined. Legal title to the facility remains in the private sector, and there is no obligation for the public sector to purchase the facility or take title. The private sector partner owns the project outright and retains the operating revenue risk and all of the surplus operating revenue in perpetuity. As an alternative to transfer, a further operating contract {at a lower cost} may be negotiated. Design Build Finance Operate (DBFO): Under this approach, the responsibilities fro designing, building, financing and operating are bundled together and transferred to private sector partners. They are also often supplemented by public sector grants in the from of money or contributions in kind, such as right of way. In certain cases, private partners may be required to make equity investments as well. DBFO shifts a great deal of the responsibility for developing and operating to private sector partners, the public agency sponsoring a project would retain full ownership over the project. Others: Build Transfer Operate (BTO) The BTO model is similar to BOT model except that the transfer to the public owner takes place at the time that construction is completed, rather than at the end of the franchise period. The concessionary builds and transfers a facility to the owner but exclusively operates the facility on behalf of the owner by means of management contract. Buy Build Operate (BBO) A BBO is a form of asset sale that includes a rehabilitation or expansion of an existing facility. The government sells the asset to the private sector entity, which then makes the improvements necessary to operate the facility in a profitable manner. Lease Own Operate (LOO) This approach is similar to a BOO project but an existing asset is leased from the government for a specified time. the asset may require refurbishment or expansion. Build Lease Transfer (BLT) The concessionaire builds a facility, lease out the operating portion of the contract, and on completion of the contract, returns the facility to the owner. Build Own Lease Transfer (BOLT) BOLT is a financing scheme in which the asset is owned by the asset provider and is then leased to the public agency, during which the owner receives lease rentals. On completion of the contract the asset is transferred to the public agency. Build Lease Operate Transfer (BLOT) The private sector designs finance and construct a new facility on public land under a long term lease and operate the facility during the term of the lease. the private owner transfers the new facility to the public sector at the end of the lease term. Design Build (DB) A DB is when the private partner provides both design and construction of a project to the public agency. This type of partnership can reduce time, save money, provide stronger guarantees and allocate additional project risk to the private sector. It also reduces conflict by having a single entity responsible to the public owner for the design and construction. The public sector partner owns the assets and has the responsibility for the operation and maintenance. Design Bid Build (DBB) Design bid build is the traditional project delivery approach, which segregates design and construction responsibilities by awarding them to an independent private engineer and a separate private contractor. By doing so, design bid build separates the delivery process in to the three liner phases: Design, Bid and Construction. The public sector retains responsibility for financing, operating and maintaining infrastructure procured using the traditional design bid build approach. Design Build Maintain (DBM) A DBM is similar to a DB except the maintenance of the facility for the some period of time becomes the responsibility of the private sector partner. The benefits are similar to the DB with maintenance risk being allocated to the private sector partner and the guarantee expanded to include maintenance. The public sector partner owns and operates the assets. Design Build Operate (DBO) A single contract is awarded for the design, construction and operation of a capital improvement. Title to the facility remains with the public sector unless the project is a designbuildoperatetransfer or designbuildownoperate project. The DBO method of contracting is contrary to the separated and sequential approach ordinarily used in the United States by both the public and private sectors. This method involves one contract for design with an architect or engineer, followed by a different contract with a builder for project construction, followed by the owners taking over the project and operating it. A simple design build approach credits a single point of responsibility for design and construction and can speed project completion by facilitating the overlap of the design and construction phases of the project. On a public project, the operations phase is normally handled by the public sector under a separate operations and maintenance agreement. Combining all three phases in to a DBO approach maintains the continuity of private sector involvement and can facilitate private sector financing of public projects supported by user fees generated during the operations phase. Lease Develop Operate (LDO) or Build Develop Operate (BDO) Under these partnerships arrangements, the private party leases or buys an existing facility from a public agency invests its own capital to renovate modernize, and expand the facility, and then operates it under a contract with the public agency. A number of different types of municipal transit facilities have been leased and developed under LDO and BDO arrangements. Theoretical Perspective Project Finance Strategic Business Unit A one-stop-shop of financial services for new projects as well as expansion, diversification and modernization of existing projects in infrastructure and non -infrastructure sectors Since its inception in 1995 the Project Finance SBU has built-up a strong reputation for its in-depth understanding of the infrastructure sector as well as non-infrastructure sector in India and they have the ability to provide tailor made financial solutions to meet the growing diversified requirement for different levels of the project. The recent transactions undertaken by PF- Concepts of Project Finance Concepts of Project Finance Introduction Project Finance. Origins of project finance Project financing is generally sought for infrastructure related projects. Its linkages to the economy are mutiple and complex, because it affects production and consumption directly, creates negative and positive externalities, and involves large flow of expenditure. Prior to World War I, private entrepreneurs built major infrastructure projects all over the world. During the 19th century ambitious projects such as the suez canal and the Trans-Siberian Railway were constructed, financed and owned by private companies. However the private sector entrepreneur disappeared after world War I and as colonial powers lost control, new governments financed infrastructure projects through public sector borrowing. The state and the public utility organizations became the main clients in the commissioning of public works, which were then paid for out of general taxation. After World War II, most infrastructure projects in industrialized countries were built under the supervision of the state and were funded from the respective budgetary resources of sovereign borrowings. This traditional approach of government in identifying needs, setting policy and procuring infrastructure was by and large followed by developing countries, with the public finance being supported by bond instruments or direct sovereign loans by such organizations as the world Bank, the Asian Development Bank and the International Monetary Fund. Development In the early 1980s The convergence of a number of factors by the early 1980s led to the search for alternative ways to develop and finance infrastructure projects around the world. These factors include: Continued population and economic growth meant that the need for additional infrastructure- roads, power plants, and water-treatment plants-continued to grow. The debt crisis meant that many countries had less borrowing capacity and fewer budgetary resources to finance badly needed projects; compelling them to look to the private sector for investors for projects which in the past would have been constructed and operated in the public sector Major international contracting firms, which in the mid-1970s had been kept busy, particularly in the oil rich Middle East, were, by the early 1980s, facing a significant downturn in business and looking for creative ways to promote additional projects. Competition for global markets among major equipment suppliers and operators led them to become promoters of projects to enable them to sell their products or services. Outright privatization was not acceptable in some countries or appropriate in some sectors for political or strategic reasons and governments were reluctant to relinquish total control of what maybe regarded as state assets. During the 1980s, as a number of governments, as well as international lending institutions, became increasingly interested in promoting the development for the private sector, and the discipline imposed by its profit motive, to enhance the efficiency and productivity of what had previously been considered public sector services. It is now increasingly recognized that private sector can play a dynamic role in accelerating growth and development. Many countries are encouraging direct private sector involvement and making strong efforts to attract new money through new project financing techniques. Such encouragement is not borne solely out of the need for additional financing, but it has been recognized that the private sector involvement can bring with it the ability to implement projects in a shorter time, the expectation of more efficient operation, better management and higher technical capability and, in some cases, the introduction of an element of competition into monopolistic structures. However, the private sector, driven by commercial objectives, would not want to take up any project whose returns are not consumerate with the risks. Infrastructure projects typically have a long gestation period and returns are uncertain. What then are the incentives of private capital providers to participate in infrastructure projects, which are fraught with huge risks? Project finance provides satisfactory answers to these questions. Project finance is typically defined as limited or non-recourse financing of a new project through separate incorporation of vehicle or Project Company. Project financing involves non-recourse financing of the development and construction of a particular project in which the lender looks principally to the revenues expected to be generated by the project for the repayment of its loan and to the assets of the project as collateral for its loan rather than to the general credit of the project sponsor. In other words the lenders finance the project looking at the creditworthiness of the project, not the creditworthiness of the borrowing party. Project Financing discipline includes understanding the rationale for project financing, how to prepare the financial plan, assess the risk, design the financing mix, and raise the funds. A knowledge base is required regarding the design of contractual arrangements to support project financing; issues fior the host government legislative provisions, public/private infrastructure partnerships, public/private financing structures; credit requirements of lenders, and how to determine the projects borrowing capacity; how to prepare cash flow projections and use them to measure expected rates of return; tax and accounting considerations; and analytical techniques to validate the projects feasibility. Traditional finance is corporate finance, where the primary source of repayment for investor and creditors is the sponsoring company, backed by its entire balance sheet, not the project alone. Although creditors will usually still seek to assure themselves of economic viability of the project being financed so that it is not a drain on the corporate sponsors existing pool of assets, an important influence on their credit decision is the overall strength of the sponsors balance sheet, as well as their business reputation. If the project fails, lenders do not necessarily suffer, as long as the company owning the project remains financially viable. Corporate finance is often used for shorter, less capital-intensive projects that do not warrant outside financing. The company borrows funds to construct a new facility and guarantees to repay the lenders from its available operating income and its base of assets. However private companies avoid this option, as it strains their balance sheets and capacity, and limits their potential participation in future projects. Project financing is different from traditional forms of finance because the financier principally looks to the assets and revenue of the project in order to secure and service the loan. In project finance a team or consortium of private firms establishes a new project company to build, own and operate a separate infrastructure project. The new project company to build own and operate a separate infrastructure project. The new project company is capitalized with equity contributions from each of the sponsors. In contrast to an ordinary borrowing situation, in a project financing the financier usually has little or no recourse to the non-project assets of the borrower or the sponsors of the project. The project is not reflected in the sponsors balance sheets. Extent of recourse Recourse refers to the right to claim a refund from another party, which has handled a bill at an earlier stage. The extent of recourse refers to the range of reliance on sponsors and other project participants for enhancement to protect against certain projects risks. In project financing there is limited or no recourse. Non-recourse project finance is an arrangement under which investors and credit financing the project do not have any direct recourse to the sponsors. In other words, the lender is not permitted to request repayment from the parent company if borrower fails to meet its payment obligation. Although creditors security will include the assets being financed, lenders rely on the operating cash flow generated from those assets for repayment. When the project has assured cash flows in the form of a reliable off taker and well-allocated construction and operating risks, the lenders are comfortable with non-recourse financing. Lenders prefer limited recourse when the project has significantly higher risks. Limited recourse project finance permits creditors and investors some recourse to the sponsors. This frequently takes the form of a precompletion guarantee during a projects construction period, or other assurance of some form of support for the project. In most developing market projects and in other projects with significant construction risk, project finance is generally of the limited recourse type. Merits and Demerits of Project Financing: Project financing is continuously used as a financing method in capital-intensive industries for projects requiring large investments of funds, such as the construction of power plants, pipelines, transportation systems, mining facilities, industrial facilities and heavy manufacturing plants. The sponsors of such projects frequently are not sufficiently creditworthy ot obtain tr5aditional financing or unwilling to take the risk and assume the debt obligation associated with traditional financing. Project financing permits the risk associated with such projects to be allocated among number of parties at levels acceptable to each party. The advantages of project financing are as follows: 1. Non-recourse: The typical project financing involves a loan to enable the sponsor to construct a project where the loan is completely â€Å"Non-recourse† to the s[sponsor i.e. the sponsor has no obligation to make payments on the project loan if revenues generated by the project are insufficient to cover the principle and interest payable on the loan. This safeguards the assets of sponsors. The risks of new projects remain separate from the existing business. 2. Maximizes leverage: In project financing. The sponsors typically seek to finance the cost of development and construction of project on highly leverage basis. Frequently such costs are financed using 80 to 100 percent debt. High leverage in an non recourse financing permits a sponsor to put less in funds at risk, permits a sponsor to finance a project without diluting its equity investment in the project and in certain circumstances, also may permit reduction in cost of capital by substituting lower cost, tax deductible interest for higher cost, taxable return on equity. 3. Off balance sheet treatment: Depending upon the structure of project financing the project sponsors may not be required to report any of the project debt on its balance sheet because such debt is non recourse or of limited recourse to the sponsor. Off balance sheet treatment can have the added practical benefit of helping the sponsor comply with convenient and restrictions related to the board. Borrowings funds contain in other indentures and credit agreements to which the sponsor is a party. 4. Maximizes tax benefits: Project finance is generally structured to maximize tax benefit and to assure that all available tax benefit are used by the sponsors or transferred to the extent possible to another party through a partnership, lease or vehicle. 5. Diversifies risk: By allocating the risk and financing need of the projects among a group of interested parties or sponsors, project financing makes it possible to undertake project that would be too large or would pose too great a risk for one party ion its own. Demerits: 1. Complexity of risk allocation: Project financing is complex transaction involving many participants with diverse interest. If a project is to be successful risk must be allocated among the participants in an economically efficient way. However, there is necessary tension between the participants. For e.g between the lender and the sponsor regarding the degree of recourse, between the sponsor and contractor regarding the nature of guarantees., etc which may slow down the realization of the project. 2. Increase transaction cost: It involves higher transaction costs compared to other types of transactions, because it requires an expensive and time-consuming due diligence conducted by the lenders lawyer, the independent engineers etc., since the documentation is usually complex and lengthy. 3. Higher interest rates and fees: The interest rates and fees charged in project financing are higher than on direct loan made to the project sponsor since the lender takes on more risk. 4. Lender supervision: In accordance with a higher risk taken in project financing the lender imposes a greater supervion on the mangement and operation of the project to make sure that the project success is not impaired. The degree of lender supervision will usually result into higher costs which will typically have to be borne by the sponsor. Whether expanding manufacturing facilities, implementing new processing capabilities, or leveraging existing assets in new markets, innovative financing is often at the core of long-term projects to transform a companys operations. Akin to the underlying corporate transformation, the challenge with innovative financial structures such as project finance is that the investment is made upfront while the anticipated benefits of the initiative are realized years later. There has been a rise in number of companies that need innovative financing to satisfy their capital needs, in a significant number of instances they have viable goals but find that traditional lenders are unable to understand their initiatives. And so the need emerged for project finance. Project financing is a specialized form of financing that may offer some cost advantages when very large amounts of capital are involved It can be tricky to structure, and is usually limited to projects where a good cash flow is anticipated. Project finance can be defined as: financing of an industrial (or infrastructure) project with myriad capital needs, usually based on non-recourse or limited recourse structures, where project debt and equity (and potentially leases) used to finance the project are paid back from the cash flow generated by the project, with the projects assets, rights and interests held as collateral. In other words, its an incredibly flexible and comprehensive financing solution that demands a long-term lending approach not typical in todays market place. Whether expanding manufacturing facilities, implementing new processing capabilities, or leveraging existing assets in new markets, innovative financing is often at the core of long-term projects to transform a companys operations. Akin to the underlying corporate transformation, the challenge with innovative financial structures such as project finance is that the investment is made upfront while the anticipated benefits of the initiative are realized years later. Infrastructure is the backbone of any economy and the key to achieving rapid sustainable rate of economic development and competitive advantage. Realizing its importance governments commit substantial portions of their resources for development of the infrastructure sector. As more projects emerge getting them financed will continue to require a balance between equity and debt. With infrastructure stocks and bonds being traded in the markets around the world, the traditionalist face change. A country on the crest of change is India. Unlike many developing countries India has developed judicial framework of trust laws, company laws and contract laws necessary for project finance to flourish. Types of Project Finance Build Operate Transfer (BOT) Build Own Operate Transfer (BOOT) Build Own Operate (BOO) Build Operate Transfer Build operate transfer is a project financing and operating approach that has found an application in recent years primarily in the area of infrastructure privatization in the developing countries. It enables direct private sector investment in large scale infrastructure projects. In BOT the private contractor constructs and operates the facility for a specified period. The public agency pays the contractor a fee, which may be a fixed sum, linked to output or, more likely, a combination of the two. The fee will cover the operators fixed and variable costs, including recovery of the capital invested by the contractor. In this case, ownership of the facility rests with the public agency. The theory of BOT is as follows:- BUILD A private company (or consortium) agrees with a government to invest in a public infrastructure project. The company then secures their own financing to construct the project. Operate The private developer then operates, maintains, and manages the facility for a agreed concession period and recoups their investment through charges or tolls. Transfer- After the concessionary period the company transfers ownership and operation of the facility to the government or relevant state authority. In a BOT arrangement, the private sector designs and builds the infrastructure, finances its construction and operates and maintains it over a period, often as long as 20 or 30 years. This period is referred to as the â€Å"concession† period. In short, under a BOT structure, a government typically grants a concession to a project company under which the project company has the right to build and operate a facility. The project company borrows from the lending institutions in order to finance the construction of the facility. The loans are repaid from â€Å"tariffs† paid by the government under the off take agreement during the life of the concession. At the end of the concession period the facility is usually transferred back to the government. Advantages The Government gets the benefit of the private sector to mobilize finance and to use the best management skills in the construction, operation and maintenance of the project. The private participation also ensures efficiency and quality by using the best equipment. BOT provides a mechanism and incentives for enterprises to improve efficiency through performance-based contracts and output-oriented targets The projects are conducted in a fully competitive bidding situation and are thus completed at the lowest possible cost. The risks of the project are shared by the private sector Disadvantages There is a profit element in the equity portion of the financing, which is higher than the debt cost. This is the price paid for passing of the risk to the private sector It may take a long time and considerable up front expenses to prepare and close a BOT financing deal as it involves multiple entities and requires a relatively complicated legal and institutional framework. There the BOT may not be suitable for small projects It may take time to develop the necessary institutional capacity to ensure that the full benefits of BOT are realized, such as development and enforcement of transparent and fair bidding and evaluation procedures and the resolution of potential disputes during implementation. Build Own Operate Transfer (BOOT) A BOOT funding model involves a single organization, or consortium (BOOT provider) who designs, builds, funds, owns and operates the scheme for a defined period of time and then transfers this ownership across to a agreed party. BOOT projects are a way for governments to bundle together the design and construction, finance, operations and maintenance and potentially marketing and customer interface aspects of a project and let these as a package to a single private sector service provider. The asset is transferred back to the government after the concession period at little or no cost. The Components of BOOT. B for Build The concession grants the promoter the right to design, construct, and finance the project. A construction contract will be required between the promoter and a contractor. The contract is often among the most difficult to negotiate in a BOOT project because of the conflict that increasingly arises between the promoter, the contractor responsible for building the facility and those financing its construction. Banks and other providers of funds want to be sure that the commercial terms of the construction contract are reasonable and that the construction risk is placed as far as possible on the contractors. The contractor undertakes responsibility for constructing the asset and is expected to build the project on time, within budget and according to a clear specification and to warrant that the asset will perform its design function. Typically this is done by way of a lump-sum turnkey contract. O for Own The concession from the state provides concessionaire to own, or at least possess, the assets that are to be built and to operate them for a period of time: the life of the concession. The concession agreement between the state and the concessionaire will define the extent to which ownership, and its associated attributes of possession and control, of the assets lies with the concessionaire. O for Operate An operator assumes the responsibility for maintaining the facilitys assets and the operating them on the basis that maximizes the profit or minimizes the cost on behalf of the concessionaire and, like the contractor undertaking construction and be a shareholder in the project company. The operator is s often an independent through the promoter company. T for Transfer This relates to a change in ownership of the assets that occurs at the end of the concession period, when the concession assets revert to the government grantor. The transfer may be at book value or no value and may occur earlier in the event of failure of concessionaire. Stages of Boot Project Build Design Manage project implementation Carry out procurement Finance Construct Own Hold in interest under concession Operates Mange and operate facility Carry out maintenance Deliver products/services Receive payment for product/ service Transfer Hand over project in operating condition at the end of concession period Advantages The majority of construction and long term risk can be transferred onto the BOOT provider. The BOOT operator can claim depreciation on the facility constructed and depreciation being a tax-deductible expense shareholder returns are maximized. Using an output based purchasing model, the tender process will encourage maximum innovations allowing the most efficient designs to be explored for the scheme. This process may also be built into more traditional tendering processes. Accountability for the asset design, construction and service delivery is very high given that if the performance targets are not met, the operator stands to lose a portion of capital expenditure, capital profit, operating expenditure and operating profit. Boot operators are experienced with management and operation of infrastructure assets and bring these skills to scheme. Corporate structuring issues and costs are minimal within a BOOT model, as project funding, ownership and operation are the responsibility of the BOOT operator. These costs will however be built into the BOOT project pricing. Disadvantages Boot is likely to result in higher cost of the product/ service for the end user. This is a result of the BOOT provider incurring the risks associated with 100 percnet financing of the scheme and the acceptance of the ongoing maintenance liabilities. Users may have a negative reaction to private sector involvement in the scheme, particularly if the private sector is an overseas owned company Management and monitoring of the service level agreement with the BOOT operators can be time consuming and resource hungry. Procedures need to be in place to allow users to assess service performance and penalize the BOOT operator where necessary. A rigorous selection process is required when selecting a boot partner. Users need to be confident that the BOOT operator is financially secure and sufficiently committed to the market prior to considering their bid. Build Own Operate In BOO, the concessionaire constructs the facility and then operates it on behalf of the public agency. The initial operating period {over which the capital cost will be recovered} is defined. Legal title to the facility remains in the private sector, and there is no obligation for the public sector to purchase the facility or take title. The private sector partner owns the project outright and retains the operating revenue risk and all of the surplus operating revenue in perpetuity. As an alternative to transfer, a further operating contract {at a lower cost} may be negotiated. Design Build Finance Operate (DBFO): Under this approach, the responsibilities fro designing, building, financing and operating are bundled together and transferred to private sector partners. They are also often supplemented by public sector grants in the from of money or contributions in kind, such as right of way. In certain cases, private partners may be required to make equity investments as well. DBFO shifts a great deal of the responsibility for developing and operating to private sector partners, the public agency sponsoring a project would retain full ownership over the project. Others: Build Transfer Operate (BTO) The BTO model is similar to BOT model except that the transfer to the public owner takes place at the time that construction is completed, rather than at the end of the franchise period. The concessionary builds and transfers a facility to the owner but exclusively operates the facility on behalf of the owner by means of management contract. Buy Build Operate (BBO) A BBO is a form of asset sale that includes a rehabilitation or expansion of an existing facility. The government sells the asset to the private sector entity, which then makes the improvements necessary to operate the facility in a profitable manner. Lease Own Operate (LOO) This approach is similar to a BOO project but an existing asset is leased from the government for a specified time. the asset may require refurbishment or expansion. Build Lease Transfer (BLT) The concessionaire builds a facility, lease out the operating portion of the contract, and on completion of the contract, returns the facility to the owner. Build Own Lease Transfer (BOLT) BOLT is a financing scheme in which the asset is owned by the asset provider and is then leased to the public agency, during which the owner receives lease rentals. On completion of the contract the asset is transferred to the public agency. Build Lease Operate Transfer (BLOT) The private sector designs finance and construct a new facility on public land under a long term lease and operate the facility during the term of the lease. the private owner transfers the new facility to the public sector at the end of the lease term. Design Build (DB) A DB is when the private partner provides both design and construction of a project to the public agency. This type of partnership can reduce time, save money, provide stronger guarantees and allocate additional project risk to the private sector. It also reduces conflict by having a single entity responsible to the public owner for the design and construction. The public sector partner owns the assets and has the responsibility for the operation and maintenance. Design Bid Build (DBB) Design bid build is the traditional project delivery approach, which segregates design and construction responsibilities by awarding them to an independent private engineer and a separate private contractor. By doing so, design bid build separates the delivery process in to the three liner phases: Design, Bid and Construction. The public sector retains responsibility for financing, operating and maintaining infrastructure procured using the traditional design bid build approach. Design Build Maintain (DBM) A DBM is similar to a DB except the maintenance of the facility for the some period of time becomes the responsibility of the private sector partner. The benefits are similar to the DB with maintenance risk being allocated to the private sector partner and the guarantee expanded to include maintenance. The public sector partner owns and operates the assets. Design Build Operate (DBO) A single contract is awarded for the design, construction and operation of a capital improvement. Title to the facility remains with the public sector unless the project is a designbuildoperatetransfer or designbuildownoperate project. The DBO method of contracting is contrary to the separated and sequential approach ordinarily used in the United States by both the public and private sectors. This method involves one contract for design with an architect or engineer, followed by a different contract with a builder for project construction, followed by the owners taking over the project and operating it. A simple design build approach credits a single point of responsibility for design and construction and can speed project completion by facilitating the overlap of the design and construction phases of the project. On a public project, the operations phase is normally handled by the public sector under a separate operations and maintenance agreement. Combining all three phases in to a DBO approach maintains the continuity of private sector involvement and can facilitate private sector financing of public projects supported by user fees generated during the operations phase. Lease Develop Operate (LDO) or Build Develop Operate (BDO) Under these partnerships arrangements, the private party leases or buys an existing facility from a public agency invests its own capital to renovate modernize, and expand the facility, and then operates it under a contract with the public agency. A number of different types of municipal transit facilities have been leased and developed under LDO and BDO arrangements. Theoretical Perspective Project Finance Strategic Business Unit A one-stop-shop of financial services for new projects as well as expansion, diversification and modernization of existing projects in infrastructure and non -infrastructure sectors Since its inception in 1995 the Project Finance SBU has built-up a strong reputation for its in-depth understanding of the infrastructure sector as well as non-infrastructure sector in India and they have the ability to provide tailor made financial solutions to meet the growing diversified requirement for different levels of the project. The recent transactions undertaken by PF-