Cairo Air Improvement Project 
               Compressed Natural Gas Component 
          Vehicle Emissions and Performance 
              Testing Center Business Plan 
                             
                             
                    Chemonics International, Inc.  
                   USAID/Egypt Office of Environment 
                USAID Contract No. 263-C-00-97-00090-00 
                             
                              
                             
                        March 2004 
                         Table of Contents 
                                Tables and Figures.............................................................................................................................iii 
                         Acronyms and Abbreviations...................................................................................iv 
                         1.     Background and Purpose..................................................................................1 
                         2.     Business Development Strategy .......................................................................3 
                                Market Constraints.............................................................................................................................3 
                                Strategy .................................................................................................................................................4 
                         3.     VEPTC Technical Capabilities.........................................................................5 
                                Vehicle Preparation and Emission Testing.....................................................................................5 
                                Gas Analyzers and Gas Handling.....................................................................................................6 
                                Particulate Filter Measurements .......................................................................................................6 
                                Periodic Checking, Calibration, and Preventive Maintenance.....................................................7 
                         4.     Staffing and Management............................................................................... 10 
                                Operating Parameters and Costs....................................................................................................11 
                         5.     Potential Market for Services.......................................................................... 15 
                                Potential Market................................................................................................................................16 
                         6.     Marketing Plan................................................................................................ 19 
                                General Promotional Tools.............................................................................................................19 
                                      Sales Promotion Tools..........................................................................................................................19 
                                      Public Relations.....................................................................................................................................20 
                                Personal Selling .................................................................................................................................20 
                                Special Incentive Program...............................................................................................................20 
                                Pricing.................................................................................................................................................20 
                         7.     Financial Analysis...........................................................................................22 
                                Overall Costs.....................................................................................................................................22 
                                Capital Costs......................................................................................................................................22 
                                Operating Costs................................................................................................................................23 
                                Expected Revenues and Cost Recovery Analysis........................................................................26 
                         8.     Detailed Plan and Timing...............................................................................28 
                                Tasks...................................................................................................................................................28 
                                      Phase 1....................................................................................................................................................28 
                                      Phase 2....................................................................................................................................................29 
                                      Phase 3....................................................................................................................................................29 
                                Timing.................................................................................................................................................30 
                         9.     Conclusion ...................................................................................................... 31 
                         Appendix: Price Ceiling..........................................................................................32 
                          
                          
                          
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                     Tables and Figures 
                     Table 1       Key Steps in VEPTC Development..................................................................................2 
                     Table 2       VEPTC Staff Summary........................................................................................... 11 
                     Table 3       VEPTC Facilities, Test Procedures, and Resources.....................................................11 
                     Table 4       Heavy-duty Vehicle Emissions Testing Facilities Worldwide.....................................15 
                     Table 5       Prices at Emissions Testing Laboratories.......................................................................16 
                     Table 6       Summary of Egyptian Bus and Truck Companies........................................................16 
                     Table 7       Pricing Proposal for VEPTC Services (L.E. per test)..................................................21 
                     Table 8       VEPTC Estimated Fixed Assets and Depreciation (in L.E.)......................................23 
                     Table 9       VEPTC Annual Projected Operating Costs..................................................................24 
                     Table 10      Phase 1 Costs to be Recovered (2 Years).......................................................................25 
                     Table 11      Phase 2 Costs to be Recovered (3 Years).......................................................................25 
                     Table 12      Phase 3 Costs to be Recovered........................................................................................25 
                     Table 13      Expected Revenues from VEPTC operations...............................................................26 
                      
                     Figure 1      VEPTC Business Development Strategy.........................................................................4 
                     Figure 2      Emissions Testing Process..................................................................................................7 
                     Figure 3      VEPTC Organizational Structure....................................................................................10 
                     Figure 4      Cost Recovery Analysis Summary...................................................................................27 
                      
                      
                      
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               Acronyms and Abbreviations 
               ABC Activity base costing 
               AETB     Association of Egyptian Travel Business 
               CAIP     Cairo Air Improvement Project 
               CBD Central Business District 
               CNG     Compressed Natural Gas 
               CO Carbon Monoxide 
               CO2 Carbon Dioxide 
               CRM     Chain-ratio method 
               CVS Constant volume sample 
               GOE     Government of Egypt 
               HC Hydrocarbons 
               HCMLT    Holding Company for Maritime and Transportation 
               HP Horse Power 
               ML Misr Lab 
               NMOG Non-methane organic gas 
               NOx     Nitrogen Oxides 
               O&M Operations & Maintenance 
               OJT On-the-job-training 
               PLC      Product life cycle 
               PM Particular Matter 
               SBU Strategic Business Unit 
               SOP     Standard Operating Procedure 
               STP      Segmentation, targeting, and positioning 
               TSP Total Suspended Particulates 
               USAID    United States Agency for International Development 
               VEPTC   Vehicle Emission and Performance Testing Center 
               VOC     Volatile Organic Compounds 
               ZAG     Zero Air Generator 
               4Ps     Product, Price, Place and Promotion  
                
                
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