Feasibility Study – Stay Vs MoveSurface Transport & Logistics
For one of the top Diesel Engine manufacturers, the testing and commissioning facility was located neaer a river. With new rules limiting the scope of developments near river bodies, the company wanted to understand what it can do when the time comes to expand.
task
- Thoroughly understand the development rules issued for factories near rivers
There are classifications of rivers, type of development, distance from the rivers and how much that can be developed.
- Understand from the company the potential nature of expansion
It was important to understand the nature of expansion the company was thinking about. That whether moving away with the expansion project or relocate as a whole was also a consideration. This will include relocation costs and in that case what value will the property fetch, was also a question.
- Will the operations be allowed to continue?
Even more crucial was to take a long term view of the existing operations, whether the regulations would require this unit to be shut down or if the factory discharges were not exceeding what the environmental lawas prescribed.
solution
The entire situation was taken into consideration with all permutations and combinations. Possibility of stay and expand was considered. Cost of full relocation was looked at. The potential value depreciation with the development limitations was estimated. Also the viability of continuing operations was also checked with authorities.
results
A complete report on the existing situation was drafted along with conclusions. The board recieved the draft and the company is now much better positioned to deal with the uncertainities.:
- Operations continue at existing site
- the company has become real estate ready in case of need for expansion or full relocation
- the report also provides decision making data for the type of land to be acquired in future, whether freehold, leasehold or in case of a building lease.