Feasibility Studies & Monitoring
Every construction project begins with “the idea” that gets formulated into a concept. But physically developing every notion is not possible. Here feasibility studies come into play and help identify concepts to advance.
OMNIO takes up feasibility studies for construction projects in the early stages. In this, we establish the viability of a project, identify feasible options, and assist in developing project documents. This service is essential for large-scale complex projects as it helps clear doubts related to the proposed development.
Feasibility studies take up time and cost according to the project size. OMNIO conducts in-depth feasibility studies to determine if the project is viable, needs adjustments, or is unsuccessful. We conducted feasibility studies in five areas:
Technical Feasibility
In this study, our team reviews the technical aspects of the project. It includes inspecting and considering the site size, land topography, access, geotechnics, an existing building on site, natural disaster risks, and other environmental factors.
Our team uses engineering knowledge to assess all the aspects and decide if the project is technically feasible.
Our team uses engineering knowledge to assess all the aspects and decide if the project is technically feasible.
Economic Feasibility
This area deals with the economic and cost-related aspects of the construction project. Our team undertakes a cost-benefit analysis to determine if the project is economically feasible. We also use our experience and review the current market trends to analyze various options for you. Then we advise the most suitable schemes and options for your project.
Legal Feasibility
It deals with the legal aspects of implementing construction projects. At OMNIO, we use a due diligence process to determine the legal feasibility of a project. We analyze the legal aspects of the project and ensure that it is in line with the current legal requirements.
We also conduct thorough studies of issues. These include land ownership, taxation, and planning permission.
We also conduct thorough studies of issues. These include land ownership, taxation, and planning permission.
Operational Feasibility
It deals with the operational aspect, i.e., how well the proposed project meets goals and solves problems. The operational viability or feasibility of the project is a larger view of the outcome.
It ensures that on completion of the planning and budgeting, the project identifies problems and achieves goals.
It is especially needed for projects like hospitals, schools, and housing developments, as they must be problem-solving.
It ensures that on completion of the planning and budgeting, the project identifies problems and achieves goals.
It is especially needed for projects like hospitals, schools, and housing developments, as they must be problem-solving.
Scheduling Feasibility
It is the last but most required aspect for a project to be successful. Construction projects should finish on time to ensure their success.
OMNIO uses scheduling feasibility to estimate the time required for completing a project. Furthermore, we use it to analyse the materials, design, budget, regulations, risk areas, and environmental impacts of projects.
Scheduling feasibility also determines the ability of a team to complete a construction project within the provided budget and time.
OMNIO uses scheduling feasibility to estimate the time required for completing a project. Furthermore, we use it to analyse the materials, design, budget, regulations, risk areas, and environmental impacts of projects.
Scheduling feasibility also determines the ability of a team to complete a construction project within the provided budget and time.
Highest and Best Use Studies entail identifying the most appropriate land uses and product-mix for a real estate development that is legally permitted under the constraints of development controls and regulations applicable to that specific property, which leads to optimizing returns from investments in a real estate project while minimizing its risk profile. These studies are typically undertaken for medium to large-scale projects wherein multiple uses permitted for development at the subject property are evaluated in detail in context of the locational aspects of the subject property, potential demand for each developed product, and demand preferences, along with the potential approval and development costs for each development typology. Risk and sensitivity analyses are a critical component of this study, wherein potential variance in project returns on investment or project internal rate of returns are reviewed in context of drops or increases in the key critical input variables specific to the project when viewed in context of its competitive market and pricing limits.
Principals at Omnio have rich and extensive experience in undertaking highest and best use studies, while adopting approaches and methods that are globally acceptable, which are used by various domestic and global financial institutions, both before and after placing debt and/or equity in the project, as this gives them a clear line of sight of the potential revenues, estimated costs, and potential returns from the project on an annual basis revealed through detailed discounted cash flow analyses.
MONITORING
At Omnio, we provide monitoring services in the following categories broadly:
1. Operational Monitoring
- Overview of the status of the project
- Indicating critical activities
- Progress photos
- Status of design
Schedule Monitoring
- Review of Master Schedule
- Summary of progress to date, Milestones, critical path
- Tracking of milestones (primarily slab casting) against the base schedule
- Delay analysis and suggestion on corrective measures for accelerating schedule
- Impact of delays on critical activities
- Flagging non-critical activities, which are on the verge of becoming critical
- Comments / suggestions on the schedule for the next quarter
- Review and Status of available resources (material, labour and machinery)
- Tracking of design changes
Construction Costing / Budget Monitoring
- Reviewing processes and output of cost consultant and suggestion for the same
- Summary of construction cost incurred to date – Developer will share the details as per mutually agreed format
- Cost variance with respect to business plan
- Estimation of cost to completion
- Tracking of design changes – Developer will share tracker only in the event of changes
- Review of change order records (if available)
Contract and Payment Monitoring
- Review of supporting documents for payments related to construction activities
- Check receipt and Quality Acceptance of goods / Certification of work
- Comment on Authorization, Recovery of amounts, Settlement of advances
- Monitor of Bank guarantees / Performance guarantees
- Review of Compliance to PO / WO terms
RERA Compliance Monitoring
Regulatory overview including impact of RERA on possible hindrances in timely completion of the construction of the property and the remedies available thereto
2. Business Plan Monitoring
- Review Business Plan of the Project SPV
- Review assumptions in the Business model
- Understand major financial highlights under Loan agreement/ Sanction letter etc.
- Obtain an understanding of and based on historical trends, comment on the assumptions used in the business model provided by you in respect of
- Debt treatment and end use of fund
- Principal repayments obligations
- Interest rates and resets
Sales Monitoring
- Review of Customer Agreements based on sampling method
- Assets Compliance to agreed threshold for Basic Sale Price ( BSP) and other charges like preferential Location Charges, Car parking charges, infrastructure charges etc.;
- Review of new sales, bookings & allotments, review of booking forms to asses compliance to agreed booking process
- Review of Sales performance, Comparison of actual sales vs. planned sales
- Assets final payments and receivables reconciliation (pre hand over compliances)
- Flagging non-critical activities, which are on the verge of becoming critical
- Specific review of scheme sales
- Review of transfers and cancellation, Sales commission/brokerage, Discounts and Collection
- Validation of sales in the MIS
Review of Receivables
- Review the Mapped Sales collection as per the construction schedule including progress payments, interest and charges for delayed payments, if applicable
- Ageing analysis of delayed receivables
- Reconciliation of receipts against customer ledgers
- Compare of payments demanded Vs. payments collected and comment on penalties raised to customers
- Review of deviation to waiver and exemption Policy, if any
Bank ESCROW Account Reconciliation
- Obtain all Bank ESCROW account statements for project SPV and analyse the same with respect to inward and outward transaction of;
- Sales collections
- Amounts transfer for project/construction activities
- Map and compare with actual expenses incurred for construction with payments made through ESCOR A/C
- Nature of other transfers
- Comment on major transfers (inward and outward) and its relationship with the project
- Reconciliation of amount received against sales and comments on accuracy of such booking
Financial Monitoring
- Review and comment on cash flow statement as per Business Plan Model and highlight key sources of funds used and comment on ‘headroom’ available based on total availability of funds
- Review and Reconciliation of Bank Account Statements and comment on major transfers (inward and outward) and its relationship with the project
- Review security cover, DSRA and Interest/Coupon Servicing Capability
Compliances
- Review of Statutory Compliances like TDS, GST etc. related to Sales
- Checking of Lender compliances to Covenants for approvals/NOC
Portfolio Valuation
- Periodic Monitoring of the investments in the Fund Portfolio
- Periodic Monitoring of the Securities in the Fund Portfolio
- Determining the following ratios periodically after valuation
- DSR: Debt Service Ratio
- SCR: Security Cover Ratio
- Special notes/remarks for factors that have direct impact on the market value of the subject property
OMNIO Provides value added end to end services and Management advisory consultancy to the Construction Sector.
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