Case Study

Beach Resort

Location: Exclusive Island in Visayas in a Private-Public Partnership with National Government

Land Area Used: 5Ha

Number of Rooms: 20 Villas with plans for expansion

Dive Shop: 1

Dive pool volume: 240m3 (cubic metres) fresh water

Guest swimming pool volume: 180m3

Source of Water prior Desalination Plant installation: Rainwater catchment via roof to cistern method, without any filtration system employed, with 150m3 capacity cistern dug beneath the  main building.  This supply is augmented with daily inter island water delivery, depending on tides and weather, via outrigger boat.

Prior to the resort engaging Desalination and Engineering Consultancy for its services, we received an email from the Chief of Engineering in Manila, detailing their issues, and if we are able to provide a quote for a desalination machine.  During initial email communication, we were informed, they require approximately 30m3 (30,000 litres) per day, to supply the following:

  • Topping up of 2 swimming pools

  • Kitchen

  • Food preparation

  • Laundry

  • Irrigation

  • 2 x 500ml daily water bottles for each villas

  • Unlimited 5 Gallons bottle water for staff consumption

 

A brief meeting took place at their city office, which was suppose to be a consultation, the General Manager, couldn't attend due to unforeseen events, it was cancelled.  This was followed by a extensive consultation the following week, again, at their city office, leading to an arrangement for a 2 days site visit to the island.  

 

Our firm, billed the resort, the following fees:

P    1,000  Initial Meeting

P   3,000  Extensive Consultation

P 10,000  Project Site Visit

P   1,680   VAT 12%

P  6,700   Fares and other incidentals

P22,380  Total FEE

On site, our firm established; the resort could get away with an installation of a 20m3 per day, seawater desalination plant, instead of their projected 30m3 per day, thus, saving their company over P1,000,000 from the price off the seawater desalination plant, as well as over P900,000 in unnecessary civil works, materials and logistics cost.

The desalination machine installed, was a 20m3 Seawater Desalination Plant, with the following daily cost of operations determined by our team:

  •  Membranes

  •  Pre filtration

  •  Electricity

  •  Feed pump

  •  Other daily wear and tear

  • Manpower

  • Cost per cubic metre

Desalination Plant Landed Price

$50,600 AUD Factory Price x P40 PESO Rate 

P2,024,000 Base Price

P    164,000 Freight

P    170,000 Insurance

P    193,000 Local Cargo Forwarder (we used Atiko Trans in this transaction) and Service Fees

P   404,800 Customs Duties and Other Charges at Bureau of Customs

P2,955,800 Total

Cost of transport from Cebu to Pier

P  3,500 Truck

P   1,000 Manpower

P40,000 Cargo Fare

P  8,000 Other Port Fees

P  2,000 Other Incidental Fees

P54,500 Total

P3,010,300 Sum of Desalination Machine Landed Price, Local FOB (Freight on Board) and Port Costs

Ongoing Water Cost at Resort

  • The boatman charges P200 per 1 tonne of raw unprocessed water, and per boat trip, he can carry 2 tonnes and charges P1,400 per delivery.

  • On busy days during the summer months, the resort requires up to 17-20 trips daily, just to make ends meet without topping up the pool, or irrigation and laundry (as this is outsourced,) depending, if the weather is favourable.

 

Resort saves using the seawater desalination machine, as follows:

Desalination Power Requirement: 5.5kW/Hour, Three Phase

P       0.033        Power Consumption per Day: 132kW x P5 = P660/20,000 Litres

P       0.005283 Membranes 3-7 years life span: P270,000/ 7 Years operation 51,100,000

P       0.000136  Low Pressure Cut Out Control Box 20 years life span P20,000/146,000,000

P       0.000301  Feed Pump 20 years life span P44,000/146,000,000

P       0.000205 Pre filter 20 years life span P30,000/146,000,000

P       0.038925 Total Cost per Litre Production

P       0.736655  Cost per 5 Gallons P0.038925 x 18.925 Litres

P     38.925        Cost per 1,000 Litres (1m3 of high grade water)

P1,600.00           Cost per 1,000 Litres of raw water P200 + per delivery charge of P1,400

Summary:

Previous Annual Cost of Water

P           200.00 Cost per 1m3 of Raw Water

P         1,400.00 Cost of Inter Island water delivery via outrigger boat

P         1,600.00 Total

P        9,000.00 Total Daily Cost of 10m3 Raw Water, including delivery fees to island resort

P3,285,000.00 Annual Cost

Desalination Plant Capital Expenditure

P      22,380.00 Consultation FEE

P2,955,800.00 Desalination Machine Landed Price

P      54,500.00 Cost of Transport from Cebu to Pier, en route island resort

P3,032,680.00 Total

Current Cost of Water

P                0.03 Cost per Litre of High Grade Water

P                0.73  Cost per 5 Gallons of High Grade Water

P              38.92 Cost per 1m3 of High Grade Water

Annual Savings Comparison from Previous Annual Cost of Water

P       9,000.00 Daily cost per 10m3 - P389.25 Daily Cost of 10m3 from Desalination Plant

P       8,610.75 x 365 Days

P3,142,923.75

 

P3,032,680.00 Total Investment

Investment Cost Justification

The desalination plant we installed, had paid for itself, in less than a year.

  • To calculate the Percent Return of Investment, to put into perspective, the resorts previous Annual Cost on purchasing its raw water, was P3,285,000.00.

  • With the desalination plant now set in place, the annual water savings is P3,142,923.75, divided by the Total Investment of P3,032,680.00, giving us 103.635% per Annum.  

  • The Payback Period, is Total Investment of P3,032,680.00, divided by monthly net savings of P261,910.312, giving us 11.57 Months.

  • Put another way; from the date the machine was commissioned, up and running to its eleventh month and approximately two weeks of operation thereafter, the resort, is now getting free water.

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