What is TEV Study and LIE Services?
TEV & LIE
TECHNO ECONOMIC VIABILITY (TEV)
Techno Economic Viability (TEV) is the modern barometer used by public and private agencies to evaluate Green Field or Expansion Projects under MSME or Infrastructure Projects. Taking into consideration the technical and financial assessments and compiling them to arrive at the economic viability as well as the technical feasibility we give our recommendation for acceptance, modification recommendation or rejection. Stakeholders and decision makers rely on our TEV for a critical, non-biased analysis of projects to determine the risk-to-reward ratios of projects.
Rohit Sharma & Associates provides TEV studies for infrastructure projects across India following a comprehensive data-backed approach.
TECHNICAL FEASIBILITY
- Assessment of the available land in use for the project
- Assessment of suitability and availability of infrastructure available for the activity of the company
- Availability of skilled manpower
- Assessment of existing capacity
MARKET POTENTIAL
- Present and future market scenario
- Assessment of marketing infrastructure available
- The demand supply analysis
- Competition in field
FINANCIAL VIABILITY
- Assessment of future cash flows and profitability of the project
- Financial viability of the unit based on the financial projections, profitability (income and costs), cash flow, IRR, DSCR, DP, MPBF etc.
- Conduct sensitivity analysis of the project
MANAGEMENT CAPABILITIES
- Assessment of management capabilities
SECURITY STRUCTURE
- Assessment of adequacy of primary and collateral security for term lenders
RISK ANALYSIS
- Identification of various risks like political & regulatory, resource mobilization, project execution, operational, market and financial and suggest suitable mitigation measures.
SWOT ANALYSIS
- SWOT analysis has been carried out to identify the key internal and external factors which are important for success of the project
Institution
Mandate for TEV study
Assignment of team for study
Data Collection
Sharing of questionnaire with the client
Submission of information to CARE Advisory
Draft Report
Discussion with client, seeking additional information, field visit
Preparation of draft report
Discussion on Draft Report
Discussion on draft report
feedback and collection of additional data, if required
Finalization
Finalization of the report
LENDER'S INDEPENDENT ENGINEER'S (LIE)
The Lender’s Independent Engineer’s report comprises of the technical due-diligence done by an Engineering consultant. It evaluates the technical inputs like efficiency, O&M Expenses, outputs and availability against a pre determined technical specification and financial model. This analysis enables the lender to verify the physical, financial progress and quality of work done by the developer.
Rohit Sharma & Associates has been engaged by institutional lenders to prepare LIE reports for infrastructure projects across the country. Our team starts by vetting contracts for all works, this includes reviewing performance guarantees and comparing them to industry standard contract prices. We also reviews the necessary approvals for the construction, adequacy of clearances and any consent, license, approval, registration, permit or other authorization of any nature which is required to be granted by any statutory or regulatory authority or any third party for the construction, operation and maintenance of the project.
WHO IS LENDER'S ENGINEER (LE)?
- After TEV Study, the next step is appointment of LIE.
- The LIE can be an individual for a small project and a group of engineers or a venture management firm for bigger projects.
- They will act as representative of the lender/banker and get involved with the construction project from the very inception and look after the interests of the lender.
- The LIE will visit the site on periodical intervals (once in quarter) till completion of the project or any other short interval (say monthly) given by the lender.
WHAT IS THE ROLE OF LE?
Before Funds are released to the borrower, the Bankers need a report or certificate to release the fund to the borrower on a phased manner-
- The Banker will issue a letter of indent to act as LIE
- Study of the project report, TEV Study submitted by the borrower to the Bank
- Land acquisition
- Construction of building and procurement of plant and machinery
- Obtain necessary plans, sanctions for construction of factory plant
- Environment and forest clearance
- Availability of all statutory clearance for the project
- Check facts and figures in the feasibility report with viable database and market research
- Availability of electricity, water, labour, raw material, access roads, railways and communication facilities
- Climatic and geological factors
- Whether local people have any objection for the project
- Obtain a certificate from the Chartered Accountant about source and application of funds as on the date of visit
- Obtain a Certificate from the Architect for the construction of building and percentage of completion of the building
- Obtain a schedule of completion of project
- Completion time and construction programme
REVIEW OF FINANCE BY LIE
- Total requirement of funds for successful completion of project, taking into consideration other escalation factor
- Availability of funds with the construction agency
- Mode of funds for the entire project
- Mode of schedule of payments
- Plan of utilization of funds
AFTER RELEASE OF FUNDS BY LENDER AND DURING EXECUTION OF THE PROJECT
Frequent visits to site of work to ensure –
- Adherence to the construction programmme
- Judicious utilization of funds
- Procurement of equipment and raw materials
- Judicious deployment of plant, machinery and equipment
- Monetary returns to the lender as per schedule
- Liaison between lender and borrower
- Assessment of likely risks and suggest measures to mitigate them including providing suitable assistance for transfer of risk to insurance agencies
- Quality assurance and quality control
- Whether payments of sub-contractors, suppliers, staff, workers and other agencies are being made as per schedule