PRODUCTION OF THERMOELECTRIC
POWER FROM THE SOLID WASTE OF
URBAN LAHORE
Mohammad Rafiq Khan and Harris Tanveer
Lahore School of Economics, 19 Km Burki Road, Lahore Pakistan
INTRODUCTION
 Appropriate
Technology
 Sustainable Development and
Agenda 21
 Solid Waste Disposal with Resource
Recovery: Europe, America, Japan
and some developing countries
BACKGROUND STUDIES
[1] Kyritsis, S. 2000. Proceedings of the 1st World Conference on Biomass for Energy
and Industry held in Seville in June 2000
[2] Riffat, SB. 2003. Thermo-electrics: a review of present and potential applications.
Applied Thermal Engineering, 23(8): 913-935
[3] Dubois, M., Gonzalez, A.M.M., and Knadel, M.. 2004. Municipal Solid Waste
Treatment in the EU, Publisher: Centre for Environmental Studies University Of
Aarhus Finlandsgade ,Denmark
[4] Donelly, C., and Parkman, M., 2006, Leicestershire Municipal Waste Management
Strategy, Best Environmental Option , Strategic Assessment., An Environmental
Report produced for Lancashire County Council [Online], Retrieved January 21,
2009. from http://www.lancashire.gov.uk/environment/lmwlp/pdf/bpeo161104.pdf
[5] Hogg, Leicestershire Municipal Waste Management Strategy Environmental Report
LMWMS 2006 Document 14 (May 2006)
[6] Skovgaard M, Hedal N, Villanueva A, Andersen FM, Larsen H. Municipal waste
management and greenhouse gases. Copenhagen, Denmark. European Topic Centre
on Resource and Waste Management, 2008
System approach is very popular these days and
waste is being modeled for its management and
optimal use for energy in future
Waste is being modeled for optimization of its
use in projections of Denmark and other
Scandinavian countries for 2025. These systems
also model investment to be made on waste
incineration based projects but the studies are
on the way
WORK AT LSE
Start 2006
Pakistan is also suffering from the problems highlighted above. Along with the
food and energy crises, it is also facing the environmental impact of dangerous
pollutants. A group of researchers at LSE have undertaken some work to solve
these national problems. These researchers framed a pilot scheme to carry out
research in three phases. They studied in detail the production of thermoelectric power from solid waste of four educational institutions of Lahore:
Lahore School of Economics (LSE), Lahore University of Management Sciences
(LUMS), Government College University Lahore (GCUL) and Kinnaird College
(KC). Khan and Sheikh assessed the solid waste of LSE and studied the
economic viability and technical soundness of the project based on it. Similarly
Khan and Kamal appraised a project based on waste of LUMS , Khan and
Pervez on that of KC and finally Khan and Abbas on that of GCUL . The results
were significant and thus the spectrum of study was extended to schedule a
model village, two urban colonies of Lahore and finally the City of Lahore as a
whole ; the piece of work being presented today that marked the end of Phase
2 of the Scheme. In Phase 3, the spectrum of activity will be extended to other
major cities of Pakistan. The information gathered about different cities and
towns will be finally integrated to assess overall potential of Pakistan to
produce thermoelectric power. From this source
.
THE MAJOR OBJECTIVES OF THE RESEARCH
WORK REPORTED HERE WERE AS FOLLOWS:
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To standardize a method for safe and techno-economic
disposal of Lahore’s solid waste.
To study the feasibility of production of thermo-electric
power from the biomass of solid waste.
The project if not feasible, to study how to pull it towards
feasibility.
Recommendations to the concerned agencies for
effective solid waste management.
APPRECIATION OF RESULTS

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
Results of Phase 1
Khan, MR and Sheikh, S. (2010). Production of Thermoelectric Power
from Solid Waste: A Case of Lahore School of Economics,
International Energy Journal, 11: 51-64
Khan, MR and Kamal, M. (2007). .Production of Thermo-electric
Power from the Solid Wastes of Lahore University of Management
Sciences. Presented in International Conference on Environment
held by Monash University in Malaysia in December, Proceedings in
Process. Available on Website of Monash
Khan MR and Pervez, F. (2009). Production of Thermoelectric Power
from the Solid Wastes of Kinnaird College, Environ Monitor, IX
(9&10): 14-28
Abbas, S. (2007). Production of Thermoelectric Power from Solid
Waste of Kinnaird College; B. Sc, (Honors) Thesis Available in
Resource Centre 2, Lahore School of Economics Lahore.
Phase 2 Publications in process)
Ahmad, M. Production of Thermoelectric Power from the Solid Waste of Canal View Cooperative
Housing Society Lahore. 2008. B. Sc. Honors Thesis Available in Resource Center 2 of Lahore
School of Economics.
Zia, M. 2008 .Production of Thermoelectric Power from the Solid Waste of Gulberg, Lahore.
2008. B. Sc. Honors Thesis Available in Resource Center 2 of Lahore School of Economics
Burhan, M. 2008. Production of Thermoelectric Power from the Solid Waste of Bhengali (Union)
Council, Lahore. 2008. B. Sc. Honors Thesis Available in Resource Center 2 of Lahore School of
Economics
Tanveer, H. 2008.Production of Thermoelectric Power from the Solid Waste of Urban Lahore. B.
Sc. Honors Thesis Available in Resource Center 2 of Lahore School of Economics. Research
paper written out of this thesis is Under review by Energy-Elsevier for Publication Ali, Z. 2008.
Ali, Z. 2008.Production of Thermoelectric Power from the Solid Waste of Infectious Hospital
Waste of Lahore. B. Sc. Honors Thesis Available in Resource Center 2 of Lahore School of
Economics

Phase 3
1. Khan, MR. 2010. Potential of Production of Thermoelectric Power by Sugar Mills of
Pakistan, Presented in Conference on Energy and Sustainable Development 2010 held by
Asian Institute of Technology in Chiang Mei on June 2 to 4.
2. Khan, MR. 2010. Production of Thermoelectric Power by Some Educational Institutions of
Pakistan: Presented in Conference on Energy and Sustainable Development 2010 held by
Asian Institute of Technology in Chiang Mei on June 2 to 4. Khan also presented this article in
capacity of a specially invited speaker in a seminar on May 05, 2010 organized by Pakistan
Institute of Development Economics (One of the Weekly Seminar Series) to take feedback of
teachers, scholars and students. Significant positive comments were made which were helpful
in presentation in Conference. Available at AIT and PID EWebsites
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METHODOLOGY OF RESEARCH
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Secondary Data: The projection is based on primary data Collected from
Punjab Urban Unit
The primary data about production and mode of disposal of solid waste
were collected from different offices of LMC, PUU, LDA, EPD and others by
interviewing concerned officials. The total electricity consumed by the
people of Lahore from WAPDA and Local Production from Generators was
calculated from data collected from LESCO as shown in Table 3(Number of
connections, revenue collected from the monthly bills) .
Questionnaire
Data Analysis
The data collected from different respondents was sorted in terms of
reports. The basic and alternative project were cost designed and
subsequently appraised by the application of discounted cash flow
techniques standardized by Asian Development Bank (ADB 2001 and
2002). The details of cost design and analysis of projects are compiled
later.
Interpretation of Results
TABLE 1: THE DETAILS OF THE SOLID WASTE
PRODUCED AND DISPOSED AT DIFFERENT SITES
Sites
Solid Waste Produced per Solid Waste Produced per
Solid Waste Produced per
Day (Tons)
Month (Tons)
Annum (Tons)
Ravi
731
731× =21,930
21,930×= 263,160
Shalimar
591
591×30= 17,730
17,730×12= 212,760
Wahga
460
460×30= 13,800
13,800×12= 165,600
Aziz Bhatti
470
470×30= 14,100
14,100×12= 169,200
Data Gunj Buksh
719
719×30= 21,570
21,570×12= 258,840
Samanabad
748
748×30= 22,440
22,440×12= 269,280
Gulberg
554
554×= 16,620
16,620×12= 199,440
Allama Iqbal
720
720×30= 21,600
21,600×12= 259,200
Nishtar
686
686 × 30= 20,580
20,580×12= 246,960
Total
5679
5679 x30= 170,370
170,370x12= 2,044,440
Miscellaneous Areas
21
21 × 30 = 630
630 × 12 = 7,560
Grand Total
5700
171,000
2,052,000
S
TABLE 2: PHYSICAL COMPOSITION OF SOLID WASTE
Series No.
Description
% Weight
Tons Per Day
1
Vegetables & Fruit
30.72
1744.5
Residuals
2
Paper
2.70
153.3
3
Plastic & Rubber
5.63
319.7
4
Leaves, Grass, Straws 20.02
1136.9
5
Rags
7.45
423
6
Wood
1.24
70.4
7
Bones
1.03
58.4
8
Animal Waste
2.53
143.6
9
Glass
0.70
39.7
10
Metals
0.32
18.1
11
Dust, air, ashes.
27.65
1570.2
Unclassified
0.01
0.56
Total
100
5700
Stones. Bricks. Etc
12
TABLE3: POWER CONSUMPTION IN LAHORE OVER THE LAST FOUR YEARS
Sr. Year and Point of Time
No.
Power Consumption
Million-Rs.
1
June 2003
41,302
2
June 2004
47,102
3
June 2005
49,334
4
June 2006
55,742
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Cost Analysis
Initial Fixed Investment
It includes the cost of land, building, machinery, equipment ( Table
4), and preproduction expenditure . The total initial fixed investment
with land was Rs 1,756,340,000 while that without land was Rs.
1,656,340,000
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Operating Cost
The operating cost is computed in Table 6. The operating cost for
year 1 came out to be Rs 471,752,000.
Expenditure in the Base Year
Initial fixed Investment = Rs 1,756,340,000
Operating Cost
= Nil
Total Expenditure
= Rs 1,756,340,000
Expenditure in Future Years
The assumptions and computations are given in Appendix 1. The
computation is displayed in Table 6. The total operating cost
discounted to the base year turned out to be Rs. 2,367,132,214.
TABLE 4: COST OF PLANT MACHINERY & EQUIPMENT
Plant Machinery and Equipment
Capacity
Quantity
Cost
Steam Boiler
225 Ton/Hour
2
Rs. 500,000,000
Water Treatment Plant
50 Ton/Hour
1
Rs.1,000,000
300 Tons
2
Rs. 10,000,000
50 MW/Hour
2
Rs.850,000,000
Electric Pumps
-
10
Rs.1,500,000
Distribution Panel
-
1
Rs. 20,000,000
120 MVA
1
Rs.50,000,000
Vehicle (Truck, Bucket Loader)
-
50
Rs.75,000,000
Cranes
-
10
Rs.100,000,000
Feed Water Storage Tank
Multi Stage Turbine
Transformer
Total
Total Cost of Plant Machinery and Equipment = 1,607,500,000
Rs 1,607,500,000
TABLE 5: BREAK DOWN OF LABOR AND LABOR COST
Labor
Number
Salary
perSalary per Month
Employee
Project Manager
1
150,000
150,000
Power House in Charge
3
80,000
240,000
Manager Accounts
1
40,000
40,000
Accounts Assistants
5
12,000
60,000
Manager HR
1
40,000
40,000
Assistant HR
4
12,000
48,000
Medical Officer
1
40,000
30,000
Medical Assistants
4
10,000
40,000
Turbine Foreman
6
Boiler Engineers
3
60,000
180,000
Boiler/Turbine attendant
12
10,000
120,000
Boiler/Turbine Helper
9
7,000
63,000
Water Treatment Plant Labor
10
7,000
70,000
Telephone Operator
3
10,000
30,000
Electrician
10
15,000
150,000
Vehicles Drivers
150
15,000
2,250,000
Crane Operators
30
15,000
450,000
Security Guards
10
6,000
60,000
30,000
180,000
TABLE 6: TOTAL OPERATING COST
Years
Calculations (Rupees)
Operating Cost
Operating Cost = Cost of (Labor +Utilities &
(Rupees)
Chemicals + Maintenance & Depreciation)
2008-2009
0
0
2009-2010
0
0
2010-2011
63,852,000+86,400,000+321,500,000
471,752,000
2011-2012
70,237,200+103,680,000+321,500,000
495,417,200
2012-2013
77,260,920+124,416,000+321,500,000
523,176,920
2013-2014
84,987,012+149,299,200+321,500,000
555,786,212
2014-2015
93,485,713+179,159,040+321,500,000
594,144,753
2015-2016
102,834,285+214,990,848+321,500,000
639,325,133
2016-2017
113,117,714+257,989,018+321,500,000
692,606,732
2017-2018
124,429,485+309,586,821+321,500,000
755,516,306
2018-2019
136,872,434+371,504,185+321,500,000
829,876,619
2019-2020
150,559,677+445,805,022+321,500,000
917,864,699
TABLE 7: TOTAL OPERATING COSTS DISCOUNTED AT
10% TO THE BASE YEAR
Years
Calculations (Rupees)
Operating Cost
(Rupees)
2008-2009
0
0
2009-2010
0
0
2010-2011
471,752,000*0.826446
389,877,553
2011-2012
495,417,200*0.751315
372,214,374
2012-2013
523,176,920*0.683013
357,336,638
2013-2014
555,786,212*0.620921
345,099,331
2014-2015
594,144,753*0.564474
335,379,265
2015-2016
639,325,133*0.513158
328,074,807
2016-2017
692,606,732*0.466507
323,105,889
2017-2018
755,516,306*0.424098
320,412,954
2018-2019
829,876,619*0.385543
319,953,121
2019-2020
917,864,699*0.350494
321,706,070
Present Value of Total Operating Cost
3,413,160,200
BENEFITS
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Revenue Return per Annum = Rs 4,801,680,000
Gross Profit = Total Revenue Return per AnnumOperating Cost Year 1 =
Rs 4,801,680,000 - Rs 471,752,000 = Rs.
4,329.928,000
Present Value of Benefits = Rs 29,504,258,878
B/C Ratios, NPV and PBP
These values are computed. The BCR for the project
came out to be 5.71 while NPV was Rs.
24,396,734,715. The PBP for this reference alternative
turned out to be 0.40 implying that the investment can
be recovered in less than half year.
ALTERNATIVE PROJECTS
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Major factors that rendered the projects non-feasible were less tonnage of
solid waste and cost of land [ ]. Here there was no problem of tonnage
deficiency but cost of land was still an important factor. Thus alternative
projects were designed with and without cost of land.
There are two norms to accommodate the impact of inflation on project
appraisal. The first is based on the assumption that if the cost components
undergoes an increase in price with the passage of time, the revenues also
increase proportionately due to the proportionate increase in prices of the
products. Thus the impact of inflation is nullified. It need not be studied.
That is why alternatives were also designed by calculating operating cost
with and without increase in salaries.
Finally, the price at which the power production companies sell to the
government and distributing companies and the price that the end
customer may be different. The enquiry revealed that it was almost half of
the price per unit (Rs 3.25). Thus projects based on this sale price were
designed and appraised. Similarly, the prices in 2010 are now almost
double of the prices in 2008, the year in which study was carried out
TABLE 8: BASES AND REQUISITES OF DIFFERENT
ALTERNATIVE PROJECTS
Alternative 1
2
3
4
5
6
7
8
237.500
237.500
237.500
237.500
237.500
237.500
237.500
237.500
Included
Excluded
Excluded
Excluded
Included
Excluded
Included
Excluded
Increased
Not
Increased
Not
Increased Increased
Increased
Increased
Rs. 6.50/
Rs. 6.50
Rs. 6.50
Rs. 6.50
Rs. 4.00
Rs 12
Rs. 12
s
Solid
Waste
/hr (m.ton)
Cost of
Land
Future
Salaries
Price / kw
Rs. 4.00
TABLE 9: COMPUTATION OF RESULTS OF EVALUATION
OF ALTERNATIVES
Alt
PV of Benefits- PV of Costs- B/C
NPV
Initial
Gross Profit-
PBP
Rs.
(Rs.)
Investment-Rs
(Rs)
(Years)
Rs.
1
29,566,234,915 5,169,500,200 5.71
24,396,734,7151,756,340,000
4,329,928,000 0.41
2
29,566,234,915 4,655,053,187 6.35
24,911,181,728 1,756,340,000
4,329,928,000 0.41
3
29,566,234,915 5,069,500,200 5.83
24,496,734,7151,656,340,000
4,329,928,000 0.38
4
29,566,,234,915 4,555,713,187 6.48
25,010,521,7281,656,340,000
4,329,928,000 0.38
5
18,218,443,038 5,169,500,200 3.52
13,048,943,8381,756,340,000
2,483,128,000 0.70
6
18,218,443,038 5,069,500,200 3.59
13,148,943,8381,656,340,000
2,483,128,000 0.66
7
54,531,377,042 5,169,500,200 10.54
49,361,876,8421,756,340,000
8,392,888,000 0.20
8
54,531,377,042 5,069,500,200 10.75
49,461,876,8421,656,340,000
8,392,888,000 0.19
RESULTS
Results are reported in two parts: the general
information gathered from interviewees about
Lahore waste and its disposal is reported in part
1 as descriptive research and the results of cost
analysis are reported in part 2.
RESULTS OF THE COST ANALYSIS
Benefit to Cost Ratio is one of the important criteria for grading
a project as non-profitable, profitable or socially acceptable.
The decision rule is that if it is more than 1, the project is
profitable and thus acceptable and if it is less than 1, it is nonprofitable and thus not acceptable. Similarly for Net Present
Value or NPV of the Project the decision rule is that the project
is acceptable if NPV is positive and if negative, then project is
rejected. In both cases, the project is rejected if it does not fall
in the category of some social obligation. If so, entrepreneur
has to accept it on expectation of subsidy from a sponsoring
agency such as government or a social welfare organization.
Payback period (PBP) tells the time in which initial investment
will recover: shorter the time period, quicker is the recovery of
investment in a project. A long payback period is not desirable.

Alternative 1 (With Land): The BCR in Alternative 1 is 5.71, the NPV is
Rs. 24,396,734,715 while Payback Period is 0.41 Years, Thus, the Benefit
Cost Ratio (BCR) is far above 1 and the Net Present Value (NPV) is also
highly positive along with a very shorter payback period. This means that
this alternative is fully feasible.

Alternative 2 (With Land but Without Increase in Salaries): The BCR in this
alternative is 6.35; NPV is Rs 24,911,181,728 and payback period: 0.41
Years. As the values of deciding factors don’t differ significantly from
Alternative 1, the increase in salaries over future years has a minor effect.
The BCR still comes out to be above 1 and the NPV is also positive. The PBP
remains the same as that in Alternative 1. Thus this alternative is also
feasible.

Alternative 3 (Without Land): The BCR in Alternative 3 is 5.83, NPV Rs
24,496,734,715 and the PBP is 0.38 Years. The BCR and NPV have
undergone a small increase by exclusion of cost of land from initial fixed
investment. The results of this alternative are also similar to those in
Alternatives 1 and 2. The PBP is also shorter and thus this alternative is
little better than Alternative 1. Less difference may be due very high cost of
machinery and equipment as compared to land and also inclusion of high
cost and cost of fuel used to run fifty trucks around the year.

Alternative 4 (Without Land and Without Increase in Salaries): The BCR in Alternative
4 is 6.48, the NPV Rs 25,010,521,728 where as the PBP is 0.38 Years. The BCR is
still above 1 and NPV is also positive. The PBP is same as in Alternative 3. So after
excluding the cost of land from expenditure stream of project and without increasing
salaries of the labor this project becomes more profitable than a similarly evaluated
with land and without increase in salaries Alternative 2.

Alternative 5 (Decrease in Price of Electricity to Rs. 4/Kw and With Increase in
Salaries): This alternative was designed to check the feasibility in case the producer
of electricity has to supply to WAPDA the power distributor in Pakistan at lower price
(Rs 4 in 2008) for onward supply to the consumer at higher price than was Rs 6.50.
The revenue will reduce accordingly to a little more than half of that collected in the
Alternative 1. The values will also reduce and thus the BCR in this alternative is
3.52; the NPV is Rs. 13,048,943,838 whereas PBP is 0.70 years. The Benefit /Cost
is still very good and it’s above 1 and the Net Present Value (NPV) is also positive. So
even after decreasing the price of electricity to Rs. 4 /KW, the project is still
profitable.

Alternative 6 (Decrease in Price of Electricity to Rs. 4/kW Without Increase in
Salaries): This alternative is similar to Alternative 5 with the difference that salaries
were not increased as done in Alternative 3 and 4, The BCR in Alternative 6 is 3,89.
the NPV is Rs. 13,148,943,838 while PBP is 0.66 Years, This alternative is slightly
better than Alternative 5.

Alternative 7 (Decrease in Price of Electricity to Rs. 12/kW and With
Increase in Salaries): This alternative was designed to fit the project
in the current market scenario of electricity. The prices have almost
doubled as compared to those in 2008. That is why the revenue
return has been calculated at the cost of Rs.12/kW as compared to
Rs 6.50/kW. The revenue will increase accordingly and will be
almost double of that collected in Alternative 1. The values will also
reduce and thus the BCR in this alternative is 10.54; the NPV is Rs.
49,361,876,842 whereas PBP is 0.20 years. The Benefit /Cost is
very good and ils doubled 1 and the Net Present Value (NPV) is also
positive. So much so after increasing the price of electricity to Rs.12
/kW, the the project is highly feasible with profit almost double that
in Alternative 1. An excellent display of the evaluation of this project
is that the investment is fully recovered within two three months

Alternative 8 (Increase in Price of Electricity to Rs. 12/kW Without
Increase in Salaries): This alternative is similar to Alternative 7 with
the difference that salaries were not increased as done in
Alternative 3,4 and 6. The BCR in Alternative 6 is 10.75, the NPV is
Rs. 49,461,876,842, while PBP is 0.19 Years, This alternative is
slightly better than Alternative 7.
DISCUSSION
The main objective of work reported here was safe and techno-economic disposal of Lahore’s solid waste and
study of feasibility of production of thermo-electric power from its biomass content. To that end, basically a
primary project was planned and appraised. The results of this appraisal were highly promising. The BCR in
Alternative 1 was 5.71, the NPV was Rs. 24,396,734,715 while PBP was s 0.41 Years, The BCR was far above 1
and NPV) was also highly positive along with a very short PBP. This means that the feasibility of project was
beyond any doubt. This result is very different and highly distinguished from the recently reported results of the
studies on different educational institutions of Lahore [3]-[4], [32]-[33]. Out 4, production of thermoelectric
power in all was not feasible if the cost of land was included in the expenditure stream. If the cost of land was
excluded, it turned out to be non-feasible in three LSE, KC and LUMS and marginally feasible in GCUL. Major
factors that rendered the projects non-feasible were the high cost of land due to institutions being located in
expensive area such as posh colonies or near commercial centers and tonnage of the solid waste produced per
annum. That is why alternative projects based on cost exclusion and increase in tonnage were constructed and
subsequently appraised to pull the projects towards feasibility. The changes qualified the alternatives but
generally on marginal basis. Here the results are distinguished in the sense that the primary project designed on
the basis of large tonnage of waste produced in Lahore which was 5,700 m ton per annum or 435.5 m ton/hr.
Thus, the projection based on such a large quantity of solid waste was free from the tonnage constraint. The
constraint due second major factor the cost of land was also eliminated due selected location being out of Urban
Lahore such as Rai Wind Road where some agriculture land could be purchased at cheaper price (Rs 20 million
for 4 Acre) which for GCUL as an example may be the price 0.12 Acre. That is why BCR turned out to be manifold
in case of Urban Lahore and NPV very high between 20 t0 25 million rupees. The most attractive facet of this
evaluation is very small PBP even less than half year which in some previously reported cases was even infinite
which means that investment cannot be recovered at all.
ACKNOWLEDGMENTS
The authors are really thankful to the people at
District Council, Lahore and at Pattoki Sugar Mills,
especially CEO Chaudhry Muhammad Aslam,
General Manager Mr. Ikram-ul-Haq Sajid, Mian Abdul
Shakoor, and Mr. Zafar Iqbal for their valuable help
and cooperation throughout the project span. They
are also grateful to officials of Urban Unit Punjab for
providing them the solid waste data about Urban
Lahore and Steam Power Station Faisalabad, who
really guided researchers in the right direction that
ultimately translated into productive results.