Attraction of credit resources (or investments) for construction of youth - student hostel
Technical-economic validity of project crediting1. Brief description of crediting branch
Since the Soviet era, Armenia traditionally has been one of the centers of science and education and always attracted students from all over the world. In Yerevan with the population of more than million people, thousands of foreign students from all over the world study in Armenian Universities alongside with Armenian students.
There are all necessary conditions for them to become highly qualified specialists, due to which their number is increasing year by year. They are attracted not only by the high range and low prices for education, but also hospitality of the nation, unique architectural monuments and availability of high class servicing, wide range of places for entertainment.
But dwelling of foreign students is connected with certain difficulties. A part of foreign students stay in hostels, and the rest has to rent not comfortable private apartments for living.
For solution of these problems, as well as concentration and union of students from different countries, we intend to build a youth-student hostel not having an analogue in Armenia, where a solvent part of foreign students not only from Medical Institute after Mehrabyan, but also students from other universities will be able to stay.
Proceeding from 15 year experience of Medical Institute after Mehrabyan in the sphere of education, it's necessary to mention, that some foreign students don't come to study in Armenia because of the absence of hostels which correspond to international standards.
It's not a secret, that nowadays foreign students are interested not only in the quality of education and its pavement but also in interesting student life and the opportunity to contact with their peers. Secondly, hostels with technical equipment and modern conveniences can be used for international seminars, conferences, summer schools etc.
Thirdly, in connection with the sign of Bologna Declaration and integration of Armenia into European Educational space foresees the mobility of students and teachers.
Students from European higher educational institutions have an opportunity to collect a part of credits in Armenian higher educational institutions. Providing the students with dwelling is actual and is to purpose.
Youth - student hostel will differ by the level of service, conveniences, security, Internet link in the rooms, improved planning, modern sport-recreation complex, Armenian, Russian, European and Eastern cuisine, centers of rest and entertainment.
2. Project description
The project intends for the goal use of borrowing costs, which will be claimed and used partly during the period of 1.5-2 years.
An area of 1500 - 2000 m2 intends for purchase and building of an elite youth - student hostel on the territory of 800 m2, which will meet the requirements of international standards. The hostel is a six storied building + basement. A car park is situated in front of the hostel and a playing ground for volleyball, basketball etc. is behind it.
A sport-recreation complex ( a large pool, a sauna, a training hall, a body massage room and a bar) and an entertainment complex (the disco and bar karaoke) are situated in the basement; a two-storied restaurant for 150 persons, an administration, a travel agency and a conference hall are situated on the ground floor (seven meters in height ) Totally there are 50 rooms for 130 visitors, 10 rooms on each floor ( from 2 to 6 floors) (30 - double rooms, 10 - triple rooms and 10 - quadruple rooms ). A restroom and kitchen for common use will be on every floor.
3. Amount, duration and credit interests
3.1 Amount of credit is 2.5 mln. USA dollars.
3.2 Credit period is 7 years.
3.3 Interest rate is 7% per year.
4. Justification of credit repayment
The price for one visitor is $25-$40 per day (including VAT),including for those in double rooms $40, in triple rooms $33 and in quadruple rooms $25. An average price for a visitor is $33.8 per day.Income for the total occupation of the hostel is 33.8 x 130 x30 = $131.820 per month.
Income in case of 75% of hostel occupation is $98.865 per month.
Income with tax deduction is 98.865-16.480(16.67%) = $82.385 per month.
$22.385 is needed for hostel services per month.
Profit is $60.000 per month, that will be directed to credit and interests on credit repayment.
5. Schedule of service and repayment of credit
Maximum duration of construction is two years. During this period, financial recourses will be provided us partly. During the construction of the hostel the credit service is not foreseen. From the first month of the hostel operation the whole profit will be directed to repayment of interest on credit and later to credit repayment itself. 60.000 x 12= $720.000 intended for service the loan per year.
According to optimistic forecast the credit will be repaid within 6 years and according to pessimistic forecast within 7 years. Transfer of money will be carried out per month. The credit repayment will also be promoted by the operation of the whole infrastructure of the hostel (restaurant, sport complex, travel agency and etc.)
6. Project appeal
The project is estimated as rather appealing, taking into account quick recoupment and profitability of the enterprise that is provided with: the availability of highly qualified specialists and inexpensive building materials in Armenia, continual increase of flow of foreign students into Armenian Universities, availability of expensive hotels and lack of inexpensive once in Armenia.
Cooperation with travel agencies is also of no small importance during winter and summer holidays foreign students generally return home, and this period coincides with the seasonal peak of tourism when lack of hotel accommodations is especially obvious in Armenia
Thus hotel occupation is provided all the year round. Taking into account the statements mentioned above as well as partial and goal use of financial resources, the risk of crediting is estimated as close to zero.
We will be glad to cooperate with you as in case of partial crediting, as well as of investments for shared participation in the project.