The transformation of a quarry in residential units : a feasibility study

Abstract

The State of the Environment report 2005 issued by the Malta Environment and Planning Authority recognises that waste generation is still increasing rapidly. Most of the solid waste generated in the Maltese Islands originates from excavation works and construction and demolition activities. Since the closure of the Maghtab waste facility for inert waste in mid 2003, construction and demolition waste has since been disposed of in disused quarries. This method of waste disposal provides a temporary solution to the lack of disposal capacity for such waste as well as the rehabilitation of depleted quarries. The property market in Malta is renowned for its steady and secure investment potential due to its yearly rise in prices. Over recent years property demand has been fuelled further due to increased liquidity in the economy primarily through the repatriation of funds by Maltese residents from foreign countries. This study assesses the financial feasibility, or otherwise, of restoring a disused hard stone quarry by the infilling of inert wastes and the subsequent rendering of the area for a number of beneficial after uses, including a proposal of a very low density development. The feasibility of the project was evaluated through the use of DCF techniques. The study begins to establish the capital expenditure required to set up a waste management facility and projects the estimated revenue and expenditure that will be generated by such a facility. A detailed research on the capital expenditure required to undertake the development was conducted. Furthermore, Real Estate Agents were consulted to establish the demand for such a development. The results attained showed that the project is financially feasible. Through sensitivity analysis three critical variables were identified - the Cost of Capital, Development Costs and Selling Prices. Such variables should be considered carefully by the shareholders before deciding to undertake the project.