Pre-Feasibility Study
HIGH SCHOOL
Small and Medium Enterprises Development Authority Government of Pakistan www.smeda.org.pk www.smeda.org.pk
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HEAD OFFICE 6th Floor LDA Plaza, Egerton Road, Lahore 54000, Pakistan Tel: (042) 111-111-456, Fax: (042) 6304926-7
[email protected] [email protected] P
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REGIONAL OFFICE PUNJAB
REGIONAL OFFICE SINDH
REGIONAL OFFICE NWFP
REGIONAL OFFICE BALOCHISTAN
8th Floor, LDA Plaza, Egerton Road, Lahore. Tel: (042) 111-111-456 Fax: (042) 6304926-7
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5TH Floor, Bahria Complex II, M.T. Khan Road, Karachi. Tel: (021) 111-111-456 Fax: (021) 5610572
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Ground Floor State Life Building The Mall, Peshawar. Tel: (091) 9213046-47 Fax: (091) 286908
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Bungalow No. 15-A Chaman Housing Scheme Airport Road, Quetta. Tel: (081) 831623, 831702 Fax: (081) 831922
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June 2010
Pre-Feasibility Pre-Feasibility Study
High School
DISCLAIMER The purpose and scope of this information memorandum is to introduce the subject matter and provide a general idea and information on the said area. All the material included in this document is based on data/information gathered from various sources and is based on certain assumptions. Although, due care and diligence has been taken to compile this document, the contained information may vary due to any change in any of the concerned factors, and the actual results may differ substantially from the presented information. SMEDA does not assume any liability for any financial or other loss resulting from this memorandum in consequence of undertaking this activity. The prospective user of this memorandum is encouraged to carry out additional diligence and gather any information he/she feels necessary for making an informed decision. For more information on services offered by SMEDA, please contact our website: www.smeda.org.pk www.smeda.org.pk
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DOCUMENT CONTROL Document No.
PREF-50
Revision
3
Prepared by
SMEDA-Punjab
Issue Date
August, 2002
Revised on
June, 2010
Issued by
Library Officer
1
PREF-50/June, PREF-50/June, 2010/Rev 3
Pre-Feasibility Pre-Feasibility Study
High School
DISCLAIMER The purpose and scope of this information memorandum is to introduce the subject matter and provide a general idea and information on the said area. All the material included in this document is based on data/information gathered from various sources and is based on certain assumptions. Although, due care and diligence has been taken to compile this document, the contained information may vary due to any change in any of the concerned factors, and the actual results may differ substantially from the presented information. SMEDA does not assume any liability for any financial or other loss resulting from this memorandum in consequence of undertaking this activity. The prospective user of this memorandum is encouraged to carry out additional diligence and gather any information he/she feels necessary for making an informed decision. For more information on services offered by SMEDA, please contact our website: www.smeda.org.pk www.smeda.org.pk
H U T
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DOCUMENT CONTROL Document No.
PREF-50
Revision
3
Prepared by
SMEDA-Punjab
Issue Date
August, 2002
Revised on
June, 2010
Issued by
Library Officer
1
PREF-50/June, PREF-50/June, 2010/Rev 3
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EXECUTIVE SUMMARY ................................................. ............................... 4 EXECUTIVE
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PURPOSE OF THE DOCUMENT ...................................................... PURPOSE ................................................................... ............. 5
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INTRODUCTION TO SMEDA .................................................. ...................... 5 INTRODUCTION
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CRUCIAL FACTORS & STEPS IN DECISION MAKING .............. CRUCIAL .................... ........... ..... 6
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OPPORTUNITY RATIONALE........................................................ .............................................................................. ...................... 7
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PROJECT BRIEF....................................................... ................................................................................................ ......................................... 9
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PROJECT COST ....................................................... .............................................................................................. ....................................... 10
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PROJECT RETURNS ................................................. ....................................... 10
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VIABLE SIZE.................................................. ................................................ 10
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PROPOSED CAPACITY AND PRODUCT MIX................................................... ................................................... .. 10
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PROPOSED BUSINESS LEGAL STATUS ................................................. ........... 11
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INDUSTRY ANALYSIS ..................................................... INDUSTRY .................................................................................. ............................. 11
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MARKET ANALYSIS ........................................................ MARKET ..................................................................................... ............................. 14
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KEY SUCCESS FACTORS................................................ ............................. 14 KEY
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PROJECT PROFILE ................................................ ......................................... 7 PROJECT
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SWOT SWOT ANALYSIS ................................................... ......................................... 6
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REGULATIONS REGULATIONS ............................................... ................................................ 15
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HUMAN RESOURCE ..................................................... HUMAN .................................................................................. ............................. 16
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EQUIPMENT/FURNITURE REQUIREMENT .............. EQUIPMENT/FURNITURE ..................... ............. ............. ............. ...... 16 U T
INFRASTRUCTURE....................................................... .................................................................................... ............................. 19 U T
FINANCIAL ANALYSIS ................................................ ............................. 21 FINANCIAL
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PROJECT DETAIL ................................................. ....................................... 21 U T
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PROJECTED INCOME STATEMENT .................................................... ............................................................... ........... 22 U T
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PROJECTED BALANCE SHEET ................................................. .................... 23 U T
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PROJECTED CASH FLOW STATEMENT ...................................................... ........................................................ .. 24 U T
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FEE INCOME ............................................... ................................................ 25 U T
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SUBJECT DETAIL ................................................. ....................................... 29 T U
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ESTIMATED EXPENSES .................................................. ............................. 27
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KEY ASSUMPTIONS................................................................................... 30
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FINANCIAL ASSUMPTIONS.......................................................................... 30
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MISCELLANEOUS ASSUMPTIONS ................................................................ 30 T U
ANNEXURE .................................................. ................................................ 31
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School Furniture Suppliers and Markets ................................................ .. 31 U T
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IT Equipment Markets ................................................. ............................. 31
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Electrical Equipment and Appliances Suppliers and Markets ................. 31
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Educational Experts/Consultants .................................................. ........... 32
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Tax deduction income slabs .................................................. .................... 33 U T
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1 EXECUTIVE SUMMARY This SME venture entails establishing a high school in Lahore, the second largest city of Pakistan. The school will be catering to children of middle to low income economic stratum, recognizing the need for a high caliber yet low-cost institute. Being cognisant of the financial constraints of most parents, the school will charge an affordable fee. The school will practice advanced educational procedures – using modern teaching methodology, covering an extensive curriculum which is up-to-date with international standards, and hiring qualified and experienced faculty. The school will have state-of-art infrastructural facilities including spacious classrooms, well-equipped science and computer laboratories, and a resourceful library. Evident from the performance of education sector in Pakistan, quality education is a luxury only the rich can afford. Despite the efforts made by the government, most public schools are failing due to shortage of qualified or committed teachers, limited curriculum and out-dated teaching methods. With inadequate financial resources of the government, private sector investment is the only hope left for the revival of the education sector. Primary to high school level education is most crucial for initial development of a child and his future as a professional. Admission to the best colleges and universities is mostly dependant on the quality of education a student receives till his matriculation. Keeping this in mind, establishing high schools will be the most beneficial decision an entrepreneur can take to help rebuild this sector. The total project cost for setting up this school is estimated at Rs. 6.367 million. The project is financed through 50% debt and 50% equity. The project NPV is around Rs. 14.736 million, with an IRR of 65% and payback period of 2.38 years. The legal business status of this project is proposed as ‘Sole Proprietorship’. The overall proposed capacity of the school is 735 students. Each class level from Nursery – Matriculation has two sections. The maximum number of enrollments per class is limited to 30 students, to keep a manageable student-teacher ratio and to allow maximum attention for each student. The proposed building will be acquired on rent, covering an area of 3-Kanals to accommodate the proposed student strength.
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2 INTRODUCTION TO SMEDA The Small and Medium Enterprises Development Authority (SMEDA) was established with the objective to provide fresh impetus to the economy through the launch of an aggressive SME support program. Since its inception in October 1998, SMEDA had adopted a sectoral SME development approach. A few priority sectors were selected on the criterion of SME presence. In depth research was conducted and comprehensive development plans were formulated after identification of impediments and retardants. The allencompassing sectoral development strategy involved recommending changes in the regulatory environment by taking into consideration other important aspects including finance, marketing, technology and human resource development. SMEDA has so far successfully formulated strategies for industries such as horticulture, including export of fruits and vegetables, marble and granite, gems and jewelry, marine fisheries, leather and footwear, textiles, surgical instruments, transport, dairy etc. Whereas the task of SME development at a broader scale still requires more coverage and enhanced reach in terms of SMEDA’s areas of operation. Along with the sectoral focus a broad spectrum of business development services is also offered to the SMEs by SMEDA. These services include identification of viable business opportunities for potential SME investors. In order to facilitate these investors, SMEDA provides business guidance through its help desk services as well as development of project specific documents. These documents consist of information required to make well-researched investment decisions. Pre-feasibility studies and business plan development are some of the services provided to enhance the capacity of individual SMEs to exploit viable business opportunities in a better way. This document is in the continuation of this effort to enable potential investors to make well-informed investment decisions.
3 PURPOSE OF THE DOCUMENT This particular pre-feasibility comes under the ‘Education’ sector, a sub-sector of the ‘Service’ division and is in regard to setting up a “High School” in any big city of Pakistan. The objective of this pre-feasibility study is primarily to provide an overview of the high school business. This project pre-feasibility may form the basis of an important investment decision and in order to serve this objective, the document covers various aspects of the business concept development, start-up, marketing, finance and business management.
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High School
CRUCIAL FACTORS & STEPS IN DECISION MAKING
4-1
SWOT analysis
Strengths
Low student-teacher ratio Recognized by the BISE English as a medium of instruction Affordable to middle income group Accessible location Well-trained and qualified teaching staff Up-to-date and extensive curriculum Well maintained order and discipline Environment conducive to joyful learning Adequate security measures Availability of adequate and modern facilities Contribution to societal development Weakness
Time required for gaining recognition in the society Higher rental cost for accessible locations Insufficient area for playing fields to practice sports such as cricket, hockey etc. Opportunities
Overall increase in demand, linked with the growing population. Government incentives and policies conducive for private investment in education sector Gap between number of school going age children and actual enrolments in schools Growing general public awareness (especially in urban areas) about importance of quality education Limited access to affordable, quality education. Minimal budget allocation by government to education sector Limited number of government/public schools Poor facilities in government schools Threats
New entrants can easily share the business Difficulty in retaining qualified teachers Revival of public/government schools in the future through effective government policies and regulations.
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High School
PROJECT PROFILE
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Opportunity Rationale
A well-educated and well-trained population is essential for the social and economic well-being of a country. Globally, it has been observed that countries attach the highest priority to education since the development of other sectors like health, agriculture and industry is dependent on the development of education. In the face of growing demand for education world over, it is readily conceded that investment in the quantity and quality of education contributes greatly to the accumulation of efficient human resource and sustained socio-economic growth. With growing public awareness, the overall demand for education is already on the rise and is likely to increase further over the years. The gap between the number of school-going age children and the actual enrollments in schools calls for immediate attention to increase the supply of schools. The Government of Pakistan accepts education as fundamental right for its people and is commitment to provide education to every citizen. But unfortunately, the Government faces constraints due to limited financial resources available for the education sector. Children of relevant age group have inadequate access to education. Educational institutions lack basic facilities. The target of minimum essential requirement of competencies for quality education has not yet been achieved. Educational institutions face shortage of qualified and motivated teachers, especially female teachers. Therefore, the private sector investment is being encouraged with various incentives to lower the burden of the Government. During the fiscal year 2008-2009, the total education budget was Rs. 275.5 billion, including development budget of Rs. 75.1 billion and recurring budget of Rs 200.4 billion. The education budget as percentage of GDP, for the past ten years, is given in Table below. Table 5-1:
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Expenditure on Education during 2000-01 to 2008-09 P T
T P
(Billion Rs.) Year
2000-01 2001-02 2002-03 2003-04 2004-05
Current
Development
Public sector
% of GDP
69.5 70.4 79.5 94.3 106.6
6.4 8.5 10.4 29.9 33.4
75.9 78.9 89.9 124.2 140.0
1.82 1.79 1.86 2.20 2.15
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Source: Economic Survey of Pakistan 2008-2009 T P
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% of Total Expenditure
10.6 9.5 10.0 13.0 12.5
Pre-Feasibility Study
High School
2005-06
128.9
41.9
170.8
2.24
12.2
2006-07 2007-08 2 2008-09
159.9 190.2 200.4
56.6 63.5 75.1
216.5 253.7 275.5
2.50 2.47 2.10
12.0 9.8 11.52
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Although, traditionally, private schools had been a luxury only the rich can afford, this is not necessarily the case in current re-emergence of the private sector in Pakistan's education system. Keeping in view the significant role of the private sector in promotion of education at various levels, Pakistani Government has introduced the concept of Public-Private 3 Partnership. Government incentives to private sector educational institutions are: P T
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Provision of free land, or land on concessional rates in rural/urban areas Exemption of 5% - 80% income tax to private sector institutions for their faculty, management and support staff Utilities availability on non-commercial rates Provision of concessional financing for establishing rural schools Exemption of custom duties on import of educational equipment Undertaking necessary legislation to give Charter to private sector institutions and facilitating their day to day affairs
Private schooling has now become important for the country. Enrolment in private primary schools was in the order of 29 percent of total enrolment in 2007-08. During 2007-08, at the middle school level, the private sector had a share of 31 percent of total enrolment. At the secondary and higher secondary level in the same year, the private sector share was 29 percent and 18 percent respectively of the total 4 enrolment. P T
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Private sector data is estimated
Education sector reforms Action Plan 2001- 2005 (http://www.moe.gov.pk/esrdocs.htm)
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Pakistan Education Statistics, 2007-08 (www.moe.gov.pk)
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Figure 5-1:
Private
High School
Private and Government school enrollment Enrollment Middle level
Enrollment Primary level
Schools
Private
*
Schools
29%
* 31%
Govt. Schools 69%
Govt. Schools 71%
Enrollment Secondary level
Enrollment Higher Secondary level
Private
Private
Schools
Schools
*
* 18%
29%
Govt. Govt.
Schools
Schools
82%
71%
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Pro je ject Brief
This study describes the investment opportunity for setting up of a high school in any big city of Pakistan to provide education to the children of middle and lower middle income group. The school will start its operation by starting classes from Nursery to Matriculation (Secondary school). Providing education from primary level onwards ensures consistent quality of education from an early stage. By offering quality education and modern facilities, the school is expected to earn early recognition and parent’s trust and preference. The school can be opened in big cities like Karachi, Lahore, Islamabad, Peshawar, Quetta, Multan, Hyderabad, Rawalpindi, Faisalabad, etc. The area should be selected near the residents of middle income group. 9
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High School
Pro je ject Cost
Initial project cost is estimated at Rs. 6.367 million. The financial structure for the proposed pre-feasibility is assumed to consist of 50% debt and 50% equity. However this composition of debt and equity can be changed as per the requirement of the investor. 5-4
Pro je ject Returns
The project returns detail is given in the following table: Table 5-2:
Project Returns Equity
Net Present Value Internal Rate of Return Payback Period (Years) 5-5
Project
14,718,882 96% 2.02
14,736,057 65% 2.38
Viable Size
The minimum viable size for this particular school is around 720 students. 5-6
Proposed Capacity and Product Mix
For the purpose of this feasibility study, strength of 735 students has been proposed. The first year student intake is 294 students, increasing gradually to 735 students in the fifth year. A student dropout rate is assumed to be 5%, and new student intake is 70%. A total of 24 classrooms have been proposed for this school, each class level (Nursery – Class X) has two sections. Maximum capacity per section is 30 students. Subjects offered in Matriculation will be Science (Physics, Chemistry and Biology) and Computer Sciences (Physics, Chemistry and Computer Studies). Schools in Pakistan typically have classes from Nursery to Matriculation; therefore getting admission at Nursery level is relatively easier than at a later stage. This particular school will follow the same pattern. The school will begin its operation by starting classes from Nursery to Matriculation. Providing education from elementary level onwards not only ensures consistent quality of education from an early stage, but also makes it convenient because the admission process does not need to be repeated before college, as would be the case if the school only provided education till primary or middle level. A table of the number of students taken at each class level is given below:
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Table 5-3:
High School
Year-wise Number of Students
Students/Year
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Nursery- Prep Class I - IV Class V- VIII Class IX – X Total students
78 120 96 294
89 158 158 79 485
111 198 198 99 605
124 221 221 110 676
135 240 240 120 735
135 240 240 120 735
135 240 240 120 735
135 240 240 120 735
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Year 9
135 240 240 120 735
Year 10
135 240 240 120 735
Proposed Business Legal Status
The legal structure of the business entity can either be sole proprietorship or partnership. Although the selection totally depends upon the choice of the entrepreneur, this particular feasibility is based on a Sole Proprietorship.
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INDUSTRY ANALYSIS
In Pakistan, education remains inequitably distributed among various income groups and regions. Literacy and participation rates are below those in other South Asian countries with similar level of economic development. Due to financial constraints and requirement of managerial capacity, education targets have remained unaccomplished. Programs approved by the Government were not completed because of inadequate resource allocation. The slow implementation of programs/projects undermined the efficiency of the system at all levels, significantly in terms of qualitative improvement. Education is the key to change and progress and the Government of Pakistan has adopted this sector as one of the pillars for poverty reduction and benefit of masses. The Government is committed to provide best educational facilities to its people within the minimum possible time, by introducing its incentive for private investment and the concept of Public-Private partnership as described earlier in the report. The Education system of Pakistan is divided into the following tiers: 5
Table 6-1: Education System in Pakistan
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Level
Elementary (Montessori) Primary Middle Secondary Higher Secondary B.A (Graduate Degree) M.A (Post-graduate Degree) M. Phil/ Ph.D.
Classes
Student Age
Duration
Playgroup, Kindergarten I-V VI-VIII IX-X XI-XII
3-5 years 5 years 10 years 13 years 16 years
2 years 5 years 3 years 2 years 2 years 2 years 2 years 3 years
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Educational Guide of Pakistan (2007-08) T P
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Pre-Feasibility Study
High School
According to Pakistan Social and Living Measurement (PSLM) Survey, the over all literacy rate, in 2007-08 was 56% compared to 55% in 2006-07. Literacy remains higher in urban areas (71%) than in rural areas (49%) and more in men (69%) 6 compared to women (44%). Comparatively high incidence of illiteracy among female may be due to pervasive gender inequality and limited access to the available educational facilities. A comparative picture of literacy rates of both sexes by province and rural/urban division is given in table below: P T
Table 6-2
T P
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Literacy Rates in Percentage P T
Province/Area
2006-07
Pakistan RURAL URBAN Balochistan Rural Urban NWFP Rural Urban Punjab Rural Urban Sindh Rural Urban
Total 55 48 73 42 33 60 47 47 64 58 53 75 55 37 74
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2007-08 Male 67 63 80 58 49 75 67 68 78 67 66 81 67 54 81
Female 42 32 66 22 13 41 28 26 49 48 40 69 42 17 65
Total 56 49 71 46 34 60 49 48 65 59 55 74 56 41 74
Male 69 65 81 66 51 78 68 68 80 70 68 80 69 59 82
Female 44 36 65 23 15 39 33 30 52 48 44 69 42 22 66
The government is making serious efforts to improve the access of education by enhancing educational facilities. The rural- urban distribution of both public and 8 private institutions and enrollments is given below (Table 6-3 to 6-5): P T
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According to the Economic Survey of Pakistan 2008-09, Pakistan has a total of 146,603 primary schools in 2007-08 with an enrollment of 17.228 million students and 438,823 teachers, which gives a student-teacher ratio of approximately 39:1.
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Economic Survey of Pakistan 2008-09 (www.finance.gov.pk) Economic Survey of Pakistan 2008-09 (www.finance.gov.pk) Pakistan Education Statistics, 2007-08 (www.moe.gov.pk)
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Table 6-3
High School
Total Primary Schools and Enrollment Schools
Public Sector Private Sector 9 Other Public Total P T
T P
Urban 11,859 8,297 600 20,756
Rural 115,612 8,873 1,362 125,847
Enrollment Total 127,471 17,170 1,962 146,603
Urban 2,287,871 3,116,213 206,511 5,610,595
Rural Total 9,592,802 11,880,673 1,956,583 5,072,796 68,294 274,805 11,617,679 17,228,274
At the middle school level 489 new schools have been established since July 2007. The number of middle schools in 2007-2008 is now 40,829 both in rural and urban with 320,609 teachers functional and total enrollment of 5.362 million students, giving a student-teacher ratio of 17:1. Table 6-4
Total Middle Schools and Enrollment Schools
Public Sector Private Sector Other Public Total
Urban 1,994 12,823 238 15,055
Rural 13,708 12,024 42 25,774
Enrollment Total 15,702 24,847 280 40,829
Urban 1,278,565 1,096,995 88,133 2,463,693
Rural Total 2,314,842 3,593,407 571,548 1,668,543 12,635 100,768 2,899,025 5,362,718
With 353 new schools added since July 2007 a total of 23,964 secondary schools with 374,249 teachers are functional in 2007-08. Total student enrollment is 2.426 million giving an approximate student-teacher ratio of 7:1. Table 6-5
Total High Schools and Enrollment Schools
Public Sector Private Other Public Total
Urban 2,528 9,583 270 12,381
Rural 7,059 4,470 54 11,583
Enrollment Total 9,587 14,053 324 23,964
Urban 809,765 532,285 47,533 1,389,583
Rural 858,855 170,661 7,156 1,036,672
Total 1,668,620 702,946 54,689 2,426,255
As shown in the tables above, with the exception of primary level schools, the numbers of school under the private sector category are more than in the public sector. Irrespective, the number of enrollments are higher in the public sector schools. It is evident from these figures that most of Pakistan’s population, despite the availability, cannot afford private schools. Conclusively, quality education is a 9
Other public sector means institutions managed by Ministries/Divisions/ Department other than the Ministry of Education/Education Departments P T
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luxury only few can afford. The best schools of Lahore not only charge a high tuition fee but also have limited admissions and majority of children have to settle for substandard quality of education.
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MARKET ANALYSIS
Currently three categories of schools are being run in Pakistan, catering to three main segments of the market: high, middle and low income groups. The schools, which serve the high-income groups, are running in the private sector. These schools usually charge fee in the range of Rs. 4000 to Rs. 12,000 per month per student e.g. Lahore Grammar School, Beaconhouse School System, National Grammar School and Aitchison etc. These schools have large facilities and enjoy a high repute due to their modern system of education, use of advanced teaching techniques and qualified and specialized faculty. Most private schools fall in the second category (middle income) having a monthly fee range from Rs. 2500 to Rs. 4000 e.g. Convent of Jesus & Mary and Defence Public School. The third category is the low-income group with a monthly fee between Rs. 500 to Rs. 2500, e.g. Educators and Cathedral. Most schools belonging to this category have facilities even less than the minimum requirement. These schools have less space per student and high student teacher ratio. This proposed school caters to the needs of children of middle income group. There is stiff competition amongst the school running in the market. Parents are curious about the future of their children so they contemplate extensively before admitting their children in any school. Following are the main factors (not conclusive) on the basis of which parents make their choice of schools. 1. 2. 3. 4. 5. 6. 7.
Distance from home School track record/history General reputation Tuition Fee Qualification and experience of the school head and other faculty. Physical infrastructural facilities. Courses offered and medium of instruction.
Besides the above, there are some other subjective, social and status considerations which also play an important role in parent’s decision making.
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KEY SUCCESS FACTORS
Considering the current education situation of Pakistan; it is essential that intensive investment is made in the right type of education, yielding high returns in terms of enrollment and achievement rates. For any school to be successful high priority should be attached to providing education of substantial quality. The key lies in careful selection of education curriculum and creative teaching methodology. A well researched, extensive curriculum and modern teaching tools should be followed. 14
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Children entering school in nursery, prep, class 1, and class 2, from age three to seven, are capable of learning and absorbing material very quickly. At this level, experienced and qualified teachers are mandatory to the development of the child’s communication and social skills. A well qualified faculty sets an institution apart from all others. Teachers that are willing to work intensively with students to induce an atmosphere of learning would be an asset to any school. The importance of training the teaching staff cannot be emphasized enough. Teacher trainings should be a regular practice to ensure consistent quality of education. Additionally, the success of a school hinges on the dedication, competence and constant supervision by the principal, who should evaluate the performance of teachers and students through regular checks. Introducing English at an early stage is a feature especially attractive to parents. "English medium" schooling is sought after by parents of all income groups. Parents can perceive the opportunities the knowledge of English can open up for their children. In addition to the above factors, the teacher student ratio should be kept at minimum level. The area of the classrooms should be in line with the number of students in each classroom. Moreover, the classrooms should be substantially ventilated. For pre-school students, classrooms should be well equipped with teaching as well as extracurricular activity aids. Parents are conscious about the well being and safety of their children at schools, therefore, it is suggested that the school ensures security. The school should preferably be located in a less populated area or at a location with minimum traffic flow. Teacher parent interaction should also be a regular feature of the education system.
9
REGULATIONS
The schools are required to be registered with the Education Department (Provincial) in the office of Education Directorate Schools. The application is to be submitted on a prescribed form and can be obtained from the department. The next process is the recognition of institution from the relevant Board of Intermediate and Secondary Education (BISE). The detailed regulations, rules and requirement of minimum infrastructural facilities along with application form can be obtained from the BISE office. Contact Information of BISE is given below: Board of Intermediate & Secondary Education Address: 86 Mozang Road, Lahore. Phone No: (92) (42) 99200192-197 Fax No: (92) (42) 99200113 15
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High School
10 HUMAN RESOURCE The quality of Human Resource ensures success and survival of any organization. Hiring quality human resource will ascertain success of this high school. For progression of the school it is important to manage human resource systematically and efficiently. The qualification and experience of the staff should be well scrutinized. The number of administration and maintenance staff remain the same for the ten year time period. Experienced teachers and subject specialist are hired yearly, as students add up and consequently additional sections become operational. Key personnel proposed for the school and their salary structure are given in table 10-1: Table 10-1
Staff Acquisition Plan based on first year requirement
Positions Administrative Staff Princi al Accountant Teachers Coordinator Librarian Lab In-char e Hel ers / Peon Attendants Faculty Members: Sub ect S ecialist Senior Teacher Junior Teacher Games Teacher Pre-School Teacher Maintenance Staff Guards Cleaner Electrician Total:
Number
Salary/month
Total Salary/Year
1 1 1 1 2 2 2
Rs. 20,000 12,000 15,000 10,000 8,000 7,000 7,000
Rs. 240,000 144,000 180,000 120,000 192,000 168,000 168,000
9 8 1 6
15,000 12,000 10,000 12,000 10,000
1,296,000 960,000 144,000 720,000
3 2 1 40
8,000 7,000 8,000 161 000
288,000 168,000 96,000 4 884 000
11 EQUIPMENT / FURNITURE REQUIREMENT Detail of total equipment/furniture requirement and investment for the project is given below. Supplier information of equipment and furniture is provided in the Annexure. Table 11-1
IT Equipment
IT EQUIPMENT
Computers - office Computers - laboratory Networking Cost
Quantity
4 15 Lump sum 16
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Unit Cost
25,000 25,000 50,000
Amount (Rs.)
100,000 375,000 50,000
Pre-Feasibility Study
High School
Printer Scanner Server UPS Total Table 11-2
10,000
20,000
1 1 20
5,000 50,000 7,500
5,000 50,000 150,000 750,000
Office/School Equipment
OFFICE/SCHOOL EQUIPMENT
Quantity
Air Conditioner Ceiling Fan Exhaust Fan Energy Saver Heater Science Lab Equipment Generator – 30kVA Water Tank & Electric Motor Water Coolers Refrigerator Microwave Electric Kettle Fire Extinguisher Vacuum Cleaner Telephone/Facsimile Wall Clock Security Equipment CCTV set – 4 cameras, 1 TV Concrete Barrier Metal Detector Barbed Wire Library Books Total Table 11-3
2
Unit Cost
Amount (Rs.)
3 64 8 149 3 Lump sum 1 1 2 1 1 1 4 1 1 28
40,000 2,200 1,500 185 1,500 100,000 300,000 30,000 20,000 22,000 7,500 2,000 15,000 12,000 12,000 500
120,000 140,800 12,000 27,565 4,500 100,000 300,000 30,000 40,000 22,000 7,500 2,000 60,000 12,000 12,000 14,000
1 5 2 Lump sum -
60,000 4,000 3,500 7,000 100,000
60,000 20,000 7,000 7,000 100,000 1,098,365
Furniture and Fixtures
FURNITURE AND FIXTURES
Total Qty
Principal’s office Table and chair Additional chairs Cupboard
1 6 1 17
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Unit Cost (Rs.)
Amount (Rs.)
20,000 3,000 10,000
20,000 18,000 10,000
Pre-Feasibility Study
High School
Staffroom
Long table Chairs Cupboard Softboard Admin block Table Chairs Cupboard Nursery & Prep Class Round Tables Chairs Junior Section Student desk and chair Senior Section Student desk and chair Classroom Cupboard Whiteboard Teacher Table and chair Computer Laboratory Computer Tables Chairs Cupboard Softboard Whiteboard Science Laboratory Long tables Stools Storage Cupboard Whiteboard Softboard Library Large Table Chairs Book Shelf Librarian’s table and chair Reception Reception area furniture
1 24 2 2
20,000 1,500 7,500 1,800
20,000 35,250 15,000 3,600
1 2 1
2,500 1,500 7,500
2,500 3,000 7,500
23 135
2,000 800
45,000 108,000
240
2,000
480,000
360
2,000
720,000
25 25 25
5,000 2,200 2,500
122,500 53,900 61,250
15 30 1 1 1
1,500 1,500 5,000 1,800 2,200
22,500 45,000 5,000 1,800 2,200
6 60 4 1 1
15,000 800 7,500 2,200 1,800
90,000 48,000 30,000 2,200 1,800
4 24 8 1
9,000 1,500 7,500 7,000
36,000 36,000 60,000 7,000
1
15,000
15,000
18
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High School
Sports Equipment
Sports equipment See Saw 4-feet slide 6-feet slide 8-feet slide Monkey bar 6x6 Zigzag bridge Monkey jumping Sanitary Items Sanitary fixture Total furniture and fixtures
Lump sum 2 1 1 1 1 1 1
25,000 10,000 12,000 15,000 18,000 10,000 7,000 12,000
25,000 20,000 12,000 15,000 18,000 10,000 7,000 12,000
12
25,000
300,000 2,542,150
12 INFRASTRUCTURE Though ideally, a purpose built building can best suit a school, however any building in a peaceful environment can be rented out. For the purpose of this study, the option of getting a two-story building for school on rent has been recommended. Monthly rent of the building is taken at Rs. 300,000 for an area of 3 kanals. Proposed areas within Lahore are Iqbal Town, Johar Town, Faisal Town, Saddar – Cantt, Wapda Town, and newly established housing schemes on Raiwind road and Ferozpur road. Table 12-1
Area Requirements
Space Requirements
Area/Room
Administrative Block Principal’s office Admission office Accounts office Kitchen Lobby Store room Toilet Junior Branch Classrooms Staffroom Toilet Senior Branch Classrooms Staffroom Toilet
(Sq. ft) 150 80 100 50 100 150 36
1 1 1 1 1 1 2
(Sq. ft) 150 80 100 50 100 150 72
360 125 30
12 1 6
4,320 125 180
360 125 30
12 1 4
4,320 125 120
19
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No. of Rooms
Total Area
Pre-Feasibility Study
Science Laboratory Computer Laboratory Library Space for corridor & stairs 10% Wall area Total Covered Area Playground
High School
300
2
600
300 300 -
1 1 -
-
-
300 300 2,400 1,350 14,841 6,320
20
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High School
13 FINANCIAL ANALYSIS 13-1
Pro ject Detail
Initial Investment Capital Investment Office school equipment &Library Books Furniture & fixtures Computers & equipment Pre-operating costs Total Capital Costs
Rs. in
actuals 1,098,365 2,542,150 750,000 396,093 4,786,608
Working Capital Upfront building rent Upfront insurance payment Cash Total Working Capital
Rs. in
actuals 900,000 54,918 625,542 1,580,460
Total Investment
6,367,068
Initial Financing Debt Equity
Net Present Value Internal Rate of Return Payback Period (Yrs)
Rs. in 50% 50% Project Returns EQUITY 14,718,882 96% 2.02
21 PREF-50/June, 2010/Rev 3
actuals 3,183,534 3,183,534
PROJECT 14,736,057 65% 2.38
Pre-Feasibility Study
13-5
High School
Fee Income Year - I Per Student
Number of Students New Old Non-Operating Revenue Security ( Refundable) Registration Fee Admission Fee
No.
Year - II Rupees
Per Student
294 294 2,000 2,500 5,000
No.
Year - III Rupees
Per Student
206 279 485 588,000 735,000 1,470,000 2,205,000
2,100 2,625 5,250
No.
Year - IV Rupees
Per Student
144 461 605 432,180 540,225 1,080,450 1,620,675
2,205 2,756 5,513
2,245,320 4,989,600 7,234,920
2,205 2,756
5,987,520 3,492,720 9,480,240
3,308 3,859
No.
Year - V Rupees
Per Student
101 575 676 317,652 397,065 794,131 1,191,196
2,315 2,894 5,788
111 198 309
2,939,838 6,532,974 9,472,812
2,315 2,894
198 99 296
7,839,569 4,573,082 12,412,651
3,473 4,052
No.
Rupees
93 642 735 233,474 291,843 583,686 875,529
2,431 3,039 6,078
226,749 283,436 566,872 850,307
124 221 345
3,447,085 7,660,190 11,107,275
2,431 3,039
135 240 375
3,938,240 8,751,645 12,689,885
221 110 331
9,192,228 5,362,133 14,554,361
3,647 4,254
240 120 360
10,501,974 6,126,152 16,628,126
Operating Revenue
Monthly Fee 135 240 375
Nursery to Prep I to IV
2,000 2,500
78 120 198
1,872,000 3,600,000 5,472,000
2,100 2,625
240 120 360
V to VIII IX to X (Matric)
3,000 3,500
96 96
3,456,000 3,456,000
3,150 3,675
294
11,133,000
Net Fee
89 158 248 0 158 79 238 485
18,335,835
605
23,076,659
676
26,537,165
735
30,168,318
Pre-Feasibility Study
13-5
High School
Fee Income Year - I Per Student
Number of Students New Old Non-Operating Revenue Security ( Refundable) Registration Fee Admission Fee
No.
Year - II Rupees
Per Student
294 294 2,000 2,500 5,000
No.
Year - III Per Student
Rupees
No.
206 279 485 588,000 735,000 1,470,000 2,205,000
2,100 2,625 5,250
Year - IV Rupees
Per Student
No.
144 461 605 432,180 540,225 1,080,450 1,620,675
2,205 2,756 5,513
2,245,320 4,989,600 7,234,920
2,205 2,756
5,987,520 3,492,720 9,480,240
3,308 3,859
Year - V Rupees
Per Student
No.
101 575 676 317,652 397,065 794,131 1,191,196
2,315 2,894 5,788
111 198 309
2,939,838 6,532,974 9,472,812
2,315 2,894
198 99 296
7,839,569 4,573,082 12,412,651
3,473 4,052
Rupees
93 642 735 233,474 291,843 583,686 875,529
2,431 3,039 6,078
226,749 283,436 566,872 850,307
124 221 345
3,447,085 7,660,190 11,107,275
2,431 3,039
135 240 375
3,938,240 8,751,645 12,689,885
221 110 331
9,192,228 5,362,133 14,554,361
3,647 4,254
240 120 360
10,501,974 6,126,152 16,628,126
Operating Revenue
Monthly Fee 135 240 375
Nursery to Prep I to IV
2,000 2,500
78 120 198
1,872,000 3,600,000 5,472,000
2,100 2,625
240 120 360
V to VIII IX to X (Matric)
3,000 3,500
96 96
3,456,000 3,456,000
3,150 3,675
294
11,133,000
Net Fee
89 158 248 0 158 79 238 485
18,335,835
605
23,076,659
676
26,537,165
735
30,168,318
25 PREF-50/June, 2010/Rev 3
Pre-Feasibility Study
High School
Y - VI Per Student Number of Students New Old Non-Operating Revenue Se curity (Refundab le) Registration Fee Admission Fee
Y - VII No.
Rupees
Per Student
37 698 735 2,5 53 3,191 6,381
Y - VIII No.
Rupees
Per Student
37 698 735 93,807 117,258 234,517 351,775
2,680 3,350 6,700
Y - IX No.
Rupees
Per Student
37 698 735 98,497 123,121 246,243 369,364
2,814 3,518 7,036
Y-X No.
Rupees
Per Student
37 698 735 103,422 129,277 258,555 387,832
2,955 3,694 7,387
No.
Rupees
37 698 735 108,593 135,741 271,482 407,224
3,103 3,878 7,757
114,023 142,528 285,057 427,585
Operating Revenue Monthly Fee 135 240 375
Nursery to Prep I to IV
2,553 3,191
135 240 375
4,135,152 9,189,227 13,324,380
2,680 3,350
135 240 375
4,341,910 9,648,689 13,990,598
2,814 3,518
135 240 375
4,559,005 10,131,123 14,690,128
2,955 3,694
135 240 375
4,786,956 10,637,679 15,424,635
3,103 3,878
135 240 375
5,026,303 11,169,563 16,195,867
240 120 360
V to VIII IX to X (Matric)
3,829 4,467
240 120 360
11,027,073 6,432,459 17,459,532
4,020 4,690
240 120 360
11,578,426 6,754,082 18,332,508
4,221 4,925
240 120 360
12,157,348 7,091,786 19,249,134
4,432 5,171
240 120 360
12,765,215 7,446,375 20,211,590
4,654 5,430
240 120 360
13,403,476 7,818,694 21,222,170
Net Fee
735
31,135,686
735
32,692,471
735
34,327,094
735
36,043,449
735
37,845,621
Pre-Feasibility Study
High School
Y - VI Per Student Number of Students New Old Non-Operating Revenue Se curity (Refundab le) Registration Fee Admission Fee
Y - VII No.
Rupees
Per Student
37 698 735 2,5 53 3,191 6,381
Y - VIII No.
Per Student
Rupees
37 698 735 93,807 117,258 234,517 351,775
2,680 3,350 6,700
Y - IX No.
Rupees
Per Student
37 698 735 98,497 123,121 246,243 369,364
2,814 3,518 7,036
Y-X No.
Rupees
Per Student
37 698 735 103,422 129,277 258,555 387,832
2,955 3,694 7,387
No.
Rupees
37 698 735 108,593 135,741 271,482 407,224
3,103 3,878 7,757
114,023 142,528 285,057 427,585
Operating Revenue Monthly Fee 135 240 375
Nursery to Prep I to IV
2,553 3,191
135 240 375
4,135,152 9,189,227 13,324,380
2,680 3,350
135 240 375
4,341,910 9,648,689 13,990,598
2,814 3,518
135 240 375
4,559,005 10,131,123 14,690,128
2,955 3,694
135 240 375
4,786,956 10,637,679 15,424,635
3,103 3,878
135 240 375
5,026,303 11,169,563 16,195,867
240 120 360
V to VIII IX to X (Matric)
3,829 4,467
240 120 360
11,027,073 6,432,459 17,459,532
4,020 4,690
240 120 360
11,578,426 6,754,082 18,332,508
4,221 4,925
240 120 360
12,157,348 7,091,786 19,249,134
4,432 5,171
240 120 360
12,765,215 7,446,375 20,211,590
4,654 5,430
240 120 360
13,403,476 7,818,694 21,222,170
Net Fee
735
31,135,686
735
32,692,471
26 PREF-50/June, 2010/Rev 3
735
34,327,094
735
36,043,449
735
37,845,621
Pre-Feasibility Study
13-7 T
High School
Sub je ject Detail
T
Subject Detail Classes Sections Subjects
2 I
2 II
2 III
2 IV
2 V
2 VI
2 VII
2 VIII
2 IX
Urdu English Maths Computer sciences Science Art Islamyat Social Studies Geography History Physics Chemistry Biology/Computer
No. of Teachers Section-1 S i
Junior Section
Senior Section 8 8
Subject Specialist 9 9
2 X
Pre-Feasibility Study
13-7 T
High School
Sub je ject Detail
T
Subject Detail Classes Sections Subjects
2 I
2 II
2 III
2 IV
2 V
2 VI
2 VII
2 VIII
2 IX
2 X
Urdu English Maths Computer sciences Science Art Islamyat Social Studies Geography History Physics Chemistry Biology/Computer
No. of Teachers Section-1 Section-II Subject Specialist
Junior Section
Senior Section 8 8
Subject Specialist 9 9 3
29 PREF-50/June, 2010/Rev 3
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High School
14 KEY ASSUMPTIONS 14-1
Financial Assumptions
Interest Rate
Short Term Loan Long Term Loan Interest on cash in bank Project Financing Equity Debt Long Term Loan Repayment (Yrs) 10 Tax rate Insurance expense P T
T P
14% 16% 7% 50% 50% 5 25% 5%
Pre-Feasibility Study
High School
14 KEY ASSUMPTIONS 14-1
Financial Assumptions
Interest Rate
Short Term Loan Long Term Loan Interest on cash in bank Project Financing Equity Debt Long Term Loan Repayment (Yrs) 10 Tax rate Insurance expense P T
14-2
14% 16% 7% 50% 50% 5 25% 5%
T P
Miscellaneous Assumptions
Salaries growth rate
5%
Student fee growth rate Expense growth rate Electricity growth rate Rent growth rate Student dropout rate New student intake Depreciation on: (Written Down Value) Furniture & Fix. Electric & other equipment IT Equipment Life of furniture and equipment Life of IT equipment Cash in Hand (Days) Operational hours/day Operational days/week
10 P T
T P
5% 5% 10% 10% 5% 70% 10% 10% 33% 10 years 3 years 30 7 6
Tax rate is fixed through out the project since the income falls in 25% tax deduction slab
30 PREF-50/June 2010/Rev 3
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High School
15 ANNEXURE 1) School Furniture Suppliers and Markets i.
Decora Furniture – Lahore
Address: 47-Ferozpur Road, Lahore, Pakistan Tel: +92-42-37554862 ii.
Interwood Mobel – Lahore
Address: 117-E-1,Gulberg-III,Lahore Tel: +92-42-35870222-6549123-5711117 Fax: +92-42-36549126 Email:
[email protected] URL: http://www.interwoodmobel.com iii.
Javaid & Co. – Lahore
Address: 29130-Nishter Road, Lahore Tel: +92-42-37653007 iv.
Master Fibre Glass – Lahore
Address: 47-C,3 Miraj Building, Ferozepur Road, Lahore Tel: +92-42-35010010 v.
Koncept Furniture - Gujrat
Address: Dheerkay By Pass, G.T. Road, Gujrat, Pakistan Tel: +92-300-6233455 vi.
Nisbat Road Market - Lahore
vii.
Ferozepur Road Market - Lahore
2) IT Equipment Markets i.
Hafeez Centre - Lahore
ii.
Hall Road - Lahore
3) Electrical Equipment and Appliances Suppliers and Markets i.
Asian Electronics
Address: 7-C, Ground Floor, Abid Market, Shadab Colony, Temple Road, Lahore Tel: +92-42-35030276 Fax: +92-42-36372772 E-mail:
[email protected] 31 PREF-50/June 2010/Rev 3
Pre-Feasibility Study
ii.
High School
Volta Electrical Equipment
Address: 81-3, Shahra-e-Quaid-e-Azam, Lahore Tel: +92-42-36304616, 36301546 iii.
VIP Electronics
Address: G-1, Ahmed Plaza, Main Hall Road, Lahore Tel: +92-42-37220089, 37230089 Fax: +92-42-37233534 iv.
Swans International
Address: 50-F, Main Gulberg-III, Lahore Tel: +92-42-35752839, 35877761 Fax: +92-42-35753901 E-mail:
[email protected] v.
Madina Electronics
Address: 126-A, Temple Road, Lahore Tel: +92-42-37356612, 37356740 vi.
Abid Market - Lahore
vii.
Hall Road - Lahore
4) Educational Experts/Consultants i.
Ms. Rozina Jumani
Director Planning and Capacity Building/Educational Consultant Email:
[email protected] ii.
FINCON Services Inc. Pakistan
House #798 Street 16, Sector I-8/2 Islamabad 46000, Pakistan Phone: 92-51-3410-0933 Fax: 92-51-3444-3993 iii.
Academy for Educational Development
House 299, Street 19, E-7, Aurangzeb Road, Islamabad Tel: 92-51-3265-4091-3 Fax: 92-51-3265 4094 E-mail:
[email protected] Website: www.aed.org 32 PREF-50/June 2010/Rev 3