Feasibility study of a school in Canlubang.
Abstract/Summary
This is a project feasibility study of establishing a De La Salle School within the Canlubang estate, on a 25-hectare property to be donated to De La Salle University by Mr. and Mrs. Leandro Locsin.Market study findings show that there is a tremendous demand for a grade school and eventually a high school in Canlubang. The demand is expected to come from residents of Canlubang residential subdivisions and employees and dependents working in the Canlubang estate and in neighboring towns of Laguna. The bulk of the demand comes from the lower income group. Considering an envisioned La Salle school, relatively high tuition fees have to be charged requiring a demand from higher/middle income level group. In 1985, demand from students in this income level is 17,000 (60 percent) for elementary education. There are currently four schools offering 'quality' private education within the 15 km. radius of the proposed school. There will be a demand gap of 13,000 students in 1985, 61 percent of whom will need elementary education, 16 percent, secondary education, and 21 percent, college education. The grade school and eventually a high school to be set up will have 2,000 students at full operation. Tuition fees range from P2,400 to P3,500 in 1985 depending on grade level. There is no need for advertisement or promotion.The educational study stipulates a traditional type of education to be offered. A total of 23 class sections will open in 1985, and by full operation in year 9, there will be 51 sections. A complete grade and high school will be offered starting year 7. A total of 31 teachers will be hired in 1985 and increases to 73 by year 9. At full operation there will be a total of 26 non-teaching staff.
The technical aspect of the study considers four building options. The low-cost one storey option is used in the study. There will be a grade school building, a gym and service building in 1988. Building cost amounts to P23 million in 1984 and P19 million in 1990. Furniture and equipment will cost P2.25 million in 1985 and P2.48 million in 1990. Land improvements are not included. Electricity and water are readily available in the area. The school shall provide for a water pump costing P27,000 in 1985.Financially, total project cost is P35,000 in 1984, P21 million in 1988 and P2 million in 1990. Financial sources will come from an advance from DLSU of P3 million and a DBP loan of P32 million in 1984 and P21 million in 1988. DBP loan interest will be 16 percent on the first P10 million secured by land and 18 percent on the balance secured by buildings. The school is expected to start earning operating profits by 1990. During the initial 5 years, however, the school will incur operating losses ranging from P1.3 million to P2.4 million. Net losses will be incurred during the entire 10 year projection once interest expenses are considered. Net losses ranges from P6.5 million to P10.7 million. Break-even number of students not including interest is 1,601 including interest expense, it is 3,013. An alternative option of the study considers building up a school in modules of 4 classrooms. A corporation will be organized to manage the school, which will be independent of the other La Salle schools.Based on the major findings, the project will be feasible, but not financially profitable. The high cost of money makes this project not financially viable.
