 Now, where does all this lead to? Does it really make economic sense? That is what the next few slides will tell you. So, here are the three contenders, you have a luxury car, this is a CLO which was at that time money luxury car but now it is not available, Devu was the company which made this car. And then you have this skyship section red B and then you have Tata Sumo. So, when you do a cost benefit analysis in transportation, essentially what you do is you look at the various costs and the various benefits. And you try to get a monetary value of the benefit, remove it from the costs. The net cost can then be compared. Now what you do is you convert everything into monetary units, it is not very easy. Things like cost of fuel, the charges to be paid to the driver, etc., you can work out. But how do you look at things like, you have saved so many hours, what is the money equivalent of that? This is called as value of travel time saving, value of travel time. Now, value of travel time is a huge research area in transportation. Let us say if I ask you, what would be the value of 1 hour reduction in your travel time when you go from a place to another place? Let us say you are doing this yatra or if we do not go to this yatra because many of you might say I do not want to do this yatra, why are you making me do this yatra? Let us say from wherever your hometown is to IIT Bombay, you travel today by motor transport, say train. It costs so much. Suppose I give you some other alternative which saves you 3 hours of time. So let us say the journey is 10 hours and you reach there 3 hours early. What would you put as the value of the saving? In short, what is the value of 3 hours of your travel time? So think about it and I want a number from you. So how many rupees is the value of my travel time? I also want you to think and tell me on what factors does this number depend? First of all, will it be the same number for you and for me? It may not be. So what does it depend on? Why will it be less for me and more for you or vice versa? So does somebody have any number? How many rupees per hour? Yes, let us get the number, yeah let us have a number, 1000 rupees per hour. On what basis do you get this number? So but how do you say 1000, why not 500, why not 1500. So that means what you are saying is 1000 rupees is the ballpark, so 500 is less and 100 is more. Once you fix the number then you can say more or less, but how do you get this number? If you feel it can also be 2 rupees per hour, there has to be some way of giving the logic. If you cannot have the number, tell me on what basis will this number depend? So what do you do with this 3 hours saved? So as you said, these 3 hours I will give it more to my family. So he has valued as 1000 rupees per hour. That is a questionable thing, we do not know, it could be too high, too less. But one thing is what do you do with that time? Now if you are a Vela fellow, you have nothing to do, you will say 3 hours more, what is the big difference? So many of us take an indirect journey, we take a flight ticket, we go to Mumbai to Bangalore. We say direct flight, Mumbai to Delhi is an example, you take a direct flight, it costs so much. There is another flight which is via some city 2 hour halt and it is much lower, you will say, what is the difference, no problem, how does it make a big difference for me? Because that money saving is more important to you than reaching in 2 hours. Suppose it takes 4 hours to go to Delhi, instead of 2 hours, it should not be a big deal unless you have something so important there that even 2 hours you cannot wait, correct. So there is a huge body of research on value of travel time savings. It is different for air travel, it is different for pedestrian travel, it is different for road travel, bus travel, when you design a metro in a city, for example, we have this metro which connects from Ghatkopar to Varsova. So how many people will travel from that particular place to that particular place? Today they travel via Andheri and then take an auto, how much will they save? One important aspect is what will be the time saving, then you look at comfort, you look at connectivity. So whatever method you use, that is a matter of debate and there is a huge, I mean when I teach air transportation I take 2 classes on only VOT estimation. So we will discuss about it offline. But it is important that this value of travel time saving should be considered to get a proper comparison. So now let us look at the assumptions that we made in this study because these assumptions will have to be considered by you. So first thing is that this analysis is specific to only Chargam Yatra. You cannot use it for number to Shirdi kind of a travel also, no that is a different market and a different analysis is there for that. For Chargam Yatra which happens only from May to November but the airship and the vehicles that are purchased, they will not remain idle from December to May. Maybe in December you will have a maintenance, one month maintenance but January, February, March, April you will not say no, no there is no passenger coming so just keep sitting. Nobody can keep or afford to keep transportation systems idling. So we assume that they will be off season will be used in some other areas. For example January to March or April it could be the Golden Triangle Circuit, Jaipur, Jodhpur, Delhi that area, lot of people come. So we are not assuming that the total cost will be recovered only on these months. As I mentioned distance to travel by road is 7 days because you are going to travel around 200 kilometres per day which is a lot in hills actually. A typical average speed in a hilly area I have travelled myself extensively in at least in the Kumam area is not more than 30 kilometres per hour that is the average you get if you do not stop but after every 3 hours you would like to stop for a cup of tea for a snack or just to rest just to stretch your limbs. So practically it only comes to 20, 25 kilometres per hour so 200 kilometres per hour means 10 hours in a day you are travelling on the road that is a lot but that is the upper limit. Now basically we are competing now between airship and luxury car because travel by airships will not come very cheap it will be expensive. So it is, so who are the people who will take it? People who are hiring a luxury car today for that particular route and then in between we bring in also SUV or Tata Sumo this is what common people will take. So as I said no existing airship can do this route so we make an assumption that an enhanced version of skyship 600 with 13 seats unfortunately we do not at this point of time at that point of time sorry this was done in 2002 so at that point of time we did not have so much knowledge about airships nobody at that time at least none of us at that time knew what it will cost to make an airship to meet this requirement so we had to make some assumptions one can challenge them today we are in a much better condition. So if we are transporting 130 people per day and each airship can take 13 people that 10 airships required to meet and each airship will come with the ground support equipment and 200 hours per month is what we fly the airship 25 days so we do not fly every day we leave few days for bad weather or break and 8 hours a day is what you can do it in 7 hours so it is 8 hours a day the total time okay the cost benefit analysis was done for 8 years so we assume that the airship life is 1800 hours so after 8 years you know the airship is now going to be completely depreciated right now regarding infrastructure we said okay let us invest 5 crore rupees in building a hangar at Haridwar and for every airship apart from the initial cost there will be 2.25 crores for the support equipment the mast etc these numbers are not assumption these have come from actual quotation so today one might say 5 crores is too less for building a hangar okay but at that time we made some enquiries and got this number for building a hangar of the size that an airship 600 needs similarly depreciation of 10% and to buy these airships one has to take a loan and that loan will not come free so we assume 15% interest on reducing balance for taking that particular loan okay then this was the cost side now the benefits or the income side so we are assuming that this company which operates airships would definitely like to operate with a 10% profit nothing wrong in that because this profit is what is the attraction to the investor and a part of it will be invested back in the business right so airship is going to fly with a huge envelope much bigger than cars or trucks so you can paint it with something we assume that you can charge this amount per day for revenue towards advertisement then by some calculation procedure we got the value of travel time as rupees 145 per hour as against 1000 hours of my friend the travel time benefit was considered to be only 145 rupees per hour and therefore the intangible benefit per person per trip is going to be 1 rupees 7000 luxury car so 3 people in the car plus driver okay 40 cars per day hence 280 cars per week and 4 trips a month because each trip takes 11 days so you can do cyclically and you will be able to do this way now at that time the fuel cost per kilometer was worked out to 6.5 rupees per kilometer and plane area was 5 rupees per kilometer and we gave driver rupees 200 per day plus we got some revenue from rentals also similarly now here you can put more people okay so we travel regularly with the Innova and we go 6-7 people so it becomes tight with 6 people but in hills in hills you will find that people travel in these vehicles with approximately 8 people in the vehicle so we took 7 people okay so 18 vehicles per day 106 vehicles per week 4 trips a month fuel costs are lower per person per kilometer fuel costs are much lower and driver also gets less money revenue also is lower so this is the general map for doing the cost benefit analysis so the costs are the cost of the airship and then the operating cost and then the cost of the infrastructure the benefits or the income will be the air-reducement travel comfort hence some premium savings in time hence value of travel time of seasonal revenue when you apply it to some other place and revenue from operation or the fare that we charge so you take these numbers take them projected to a particular year and then you can get the comparison so this is the actual data which we got from the US airship size of 600 B this is in US dollars so the cost of the airship was 5 million utilization pilots ground crew insurance fuel maintenance support ticketing depreciation blah blah blah blah blah it comes to the fare comes to 2.3 dollars per kilometer so when you operate this airship in an american scenario the with 10 percent with 10 percent profit it will cost the operator 2 dollars and 30 cents per kilometer okay now now we bring it down to the Indian conditions so the cost is the same 5 million dollars but converted into lakhs utilization also is very similar so at some places looking at the cost of manpower etc in India again we got the fare of rupees 36.9 or 37 rupees per kilometer so per kilometer travel per passenger you have to pay 40 bucks if you travel by airship okay so then this is the initial data about the airships okay I have already mentioned to you a few numbers like the number of the capacity then consumption of fuel 6 million 1 million more because this is going to be further improved upon the basic airship is 5 million but the enhanced airship is 6 million because there are enhancements to allow it to operate at higher altitude okay then here is the breakdown of the annual operating costs I will not spend too much time these are numbers which you can see at leisure we have spreadsheets which contain all these calculations look at the DOC per seat per trip so in a in an SUV or in a public transportation system you are going to have you know something like now this is in 1000 US dollars so if I multiply this by 1000 I get 36.7 so a passenger pays around 36 or 37 dollars for a trip with without any profit etc this is the karcha or the expenditure that is done on the airship luxury car 113 dollars more than what is spent because there are 7 people there are 6 3 people here so the operating costs are divided by 3 and by 7 there for the airship it is going to be 712 dollars 711.9 so you will spend a lot of money but if you look at the revenue if you look at the investment etc you find that to break even in the SUV you require just 8 years so somebody puts money buys SUVs runs this business everything goes well in 8 years you require the full money assuming very little profit for luxury car you need 18 years for airship you need 14.61 years but in this analysis this is purely and purely on the basis of the no benefit for travel time and no advertisement etc basic okay so this is in lakh rupees so if I change the numbers slightly and if I bring in little bit of other numbers it so happens that you can break even in just 3 years instead of the 8 years this is this particular graph comes with the additional revenue with luxury car you need one more year with airship you can do it in the first year itself because you can earn a lot of money in airships with other facilities like advertisement on the balloon and you can charge a premium for travel time saving and comfort okay so if you look at the net present value comparison now what is the net present value the investment happens over years you have to bring it back to today keeping in mind the possible inflation okay that is called as NPV on that present value so for total sumo the costs are very low the benefits are also not very high but there are more than the costs for luxury car it is a larger number for airships there is a very very huge cost but also a very huge benefit okay so summing up the numbers in rupees so the fare that you will pay per per passenger in Tata sumo is around 3750 rupees luxury car 10000 airships 17000 rupees okay and if I assume that 7000 rupees per trip I am happy to pay for the comfort and the time saving you are becoming equivalent to a luxury car okay so then we did some sensitivity analysis what happens suppose we say no revenue from advertisement and intangibles are less then the airships will take much much more year eight years for you to recover okay so basically what it means is that the investment required when you want to operate airships is very high so it is 250 times higher than compared to the SUVs and 35 times higher than compared to luxury car so that means you need very deep pockets to take this risk okay but if you include value of travel time there can be a very very strong argument so if 100 us dollars 6000 rupees per day is what you value as one day then airships become attractive additional revenue can be also obtained using advertisement and product promotion and the breakeven point whether it is one year or eight years or six years is a very strong function of the assumptions obviously so do not get swayed by one year and eight years and all that as I said these numbers can change drastically with the change in the assumptions basic point is that investment may be needed of a high magnitude but the returns are also of very high magnitude so therefore a risk taker can invest and SUV needs the least time to break even but also the revenues are very less so SUV investment and SUV is the most conservative option investment in the airship will be a very very bold option okay so in conclusion for Charzham Yatra assuming that an airship can be made by improving something like skyship 600 B to handle the altitudes a very big assumption then it is feasible okay payback can come in the first year only for the airships and third year for the Tata sumo and fourth year in luxury car this is assuming that you earn a good amount of revenue from advertisement and if you assume that there is no revenue from advertisement and if you assume 90 rupees per hour only as the value of travel taking time it takes eight years for you to recover so in a transportation system especially when the investment comes in a large part from the government or from some other some other investor if the recovery of your revenue in the worst case scenario happens in eight years and in the best case scenario in one year it is a very good case for investment okay so this particular study was presented by me to Dr. Kalam when I met him in the year 2001 in fact I am wrong the study was done in the year 2000 and in 2001 we got the data and in 2001 March I had gone to New Delhi with Professor Sane who was that time working in our department we both met Dr. Kalam because we were proposing a project for study of use of airships in Uttaranchal so this is the case study I presented and at many places it got presented the numbers of course can be questioned I am not saying that I would put my 1 rupee or 100 rupee in this venture based on these numbers but we did this study essentially to satisfy ourselves whether this is a area worth getting into or not the common perception people have airships are very expensive they will be you know you will take so many years you will never be able to recover so those numbers of course we have answered okay