r - part - usaid

ig and crew woulcl. be req.~ired. Because this is not cdrrently
done by WDA, the cost is not included in this model.
The m ajor overkaul of a diesel-equipped well is assumed to
require a total af eight days in the Bay Region, and ten days in
the Central Range. The difference is a reflection of the travel
time re- f red * The major overhaul of a we11 equipped with a
hand pump is assuzed ta require four and six days respectively
for the t wo regions, including travel t ime,
The estimate oE the c@sl sf materials and spare parts
required %or this work is assumed to be LO% of the orfcjinaf cost
of the pump assenbly, approximately US$1,500 in the case of a
diesel pump. This is based on the replacement cost of the
fallowi..g major parts, which are expected ta be considerably
worn after al~orr six thousand hours of operation:
Diesel engine - valves and guides, bearings, injectcrrs, rings -
$600
Gear head - drive shazts, sleeves, spiral gezrs, bearings -
5700
4.3. Anortization of Total Veil Costs and Revenues.
This section of the report draws upon the costing models
discussed in the previu~s two sections 2nd presents estimates of
the *Net Present ValueM (NPV] of well construction in Somalia.
From this datz, discussion of the selling price of water
full?ws, with a view to determining the extent to which the
revenue fron wells can offset the initial ~onstruction costs and
the on-going operation and nzintenance costs. The section
begins w ith a further explanation of the xiethodology used, and
the significance sf using certain cost Eigures in the ~ ~del.
This is an expansion of the tcpic briefly mentioned in Section
3.0, the Ese and interpretaticn 95 different methods of project
appraisal.
Tbe main pLr%?.-az of ~roject appraise1 is to determine the
profitability of a project. The extent to which the returns
fro= the project pay Sack the ~ rigix1 i:~vestment determines the
internal rate of return, upon xkich the wisdom of investing in
the project, or the eva2;stkcm of its eventual outcome, is
nahf y judged. 4s previously n~ntioned, such an appzaisal can
be aade from three sepzrate viewpints.
X financial, or co~~ercial, appraisal views the project as
if it were the undertaking of 8 private company, concerned only
with the cash profit on i~vestment,
view
econczic appraisal, by some
the ca~ntry*~ econcay zs a
definitions, assumes
whole. Investment in the
the