DPR _final

7/28/2019 DPR _final

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Detailed Project Report


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The Directorate of Ports has been mandated to undertake allactivities of the Kerala State Government for the developmentof port sector in the State.

The DoP has embarked on an ambitious mission ofdeveloping several green field ports along the Kerala coast

under the Public Private Partnership (PPP) model. In next 5-7 years, US $ 18 billion likely to be invested in port

sector in India.


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1. PESTLE and SWOT analyses

2. Site Investigations:3. Port planning

4. Capital costs and operation & maintenance costs

5. Overview of tariffs, regulatory framework, tariff settingand tariff determination

6. Financial analysis:

Assumptions of investment and expenditure

Operations and maintenance expenses

Financial projections


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Political: The port sector in India is influenced by both, the Central and

the State level.

Cochin International Airport (CIAL), a public company, was setup under the Public Private Partnership mode.

Economic: Keralas economic performance is driven by the secondary

and tertiary sectors(trade, hotels, real estate, transport).

Social : The socio-cultural setup plays a pivotal role in

determining the future business potential of portdevelopment.


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Technological: All the major ports and airports are being linked to the

centralized Electronic Data Interchange (EDI) and Cochin is thefirst port to have successfully launched the concept of ePort.

Legal and Regulatory: Complex/unclear rules & regulations multiple taxes which hascaused huge delays

Environmental: Keralas coastal stretch is having lagoons, kayals, estuaries and

coastal dunes and also has a rich biodiversity and is home tomany exotic species of birds, animal and plants.

Any developmental activities along the coast may pose a threatto the environment in form of soil erosion, pollution, salt-waterintrusion.


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Strengths: The Thankassery port is known to have attracted Arabs,

Portuguese, Greeks, Chinese and British for trading. Keralas cashew-nut industry is centered here.Weaknesses: Narrow approach roads.

Labour problemsOpportunities: Development of rail connectivity to attract more cargo. Feeder services to ICTs Government BackingThreats: Inland movement by rail & road New entrant/ Tuticorin port Global economic recession


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Geographical setting: Thankassery is situated in Kollam District about 70 km north

of Thiruvananthapuram and 150 km south of Kochi.

The Kollam district is well connected to other parts of Kerala

and India through the NH-47, NH-220 and NH-208. Kollam is an important railhead of the Southern Railways.

Kollam is well-connected through waterways with other partsof Kerala and at the moment does not have direct airconnectivity.

The Bharat Sanchar Nigam Limited is the major telecom

facilitator in the district. Cellular operators, viz. BPL Mobile, Escotel, AirTel, etc also

operate in the district.


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For the development of the port layout from a long termperspective, the major parameters to be looked at are:

1. Site and marine conditions which involve:

Topography Bathymetry

Geotechnical conditions

Marine conditions such as wind, wave and currents

Coastal morphology

Littoral transport Hinterland connectivity

Physical constraints and opportunities


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2. Port facility requirements are: Berth requirements Governing vessel size Storage area requirements Requirements of dredging Port craft Navigation aids

3. Criteria for planning involves: Marine operational criteria Tranquility requirements Vessel turning circle Port access channel Deck elevation


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The port planning exercise has been divided into the following

phases :Phase 1 To utilize the existing facilities to its fullcapacity. In this regards, the private developer would berequired to augment the existing infrastructure by:

Providing mechanical material handling equipment / cranes

etc Strengthening existing facilities

Facilitating connectivity (with active support of the stategovernment)

Improving the storage requirements

Managing the port operations

Phase 2 When the cargo volumes exceed the capacity ofthe existing infrastructure, a separate wharf is proposedin the port area towards North/East direction.


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Additional infrastructure in Phase I Considering cargo to be handled in initial years consisting of

containers and bulk / break bulk in non containers, mobilecranes are considered to handle all types of cargo.

It is proposed to increase the deck slab thickness of entirewharf deck, with extension by about 8.00 m towards land.The increase in vertical loads on piles will be marginal andwithin the safe capacity of pile. The capacity of existing wharf

including extension with above strengthening would beutilized to the maximum extent possible

Infrastructure in Phase II To be commissioned by year 2020. A separate wharf of

dimensions 200.0 m long X 20.0 m wide is proposed in the

port area towards North/East direction which will be mainlyfor handling container cargo with higher capacity cranes thanthose considered in Phase I with increase in cargo handlingrate by about 25 to 30%.


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1. Tranquility requirements: The existing harbour is a fair-weather, protected from the influence of waves by the twobreak waters and near tranquil conditions exists in theharbour. Therefore no further tranquility aspects arerequired to be considered.

2. Marine operational criteria: The port will be a directberthing port for coastal vessels and ships of size rangingfrom 6,000 DWT to 15,000 DWT. The maneuvering inside

the port area will be done using tugs of required bollardpull which may be between 12 tonnes to 20 tonnes.3. Turning circle: The basin inside the harbour covering an

area of 1250 m by 800 m having a depth of 6.5 m issufficient for turning of the vessels inside the harbour.Therefore no separate turning circle is required to be

provided.4. Storage area levels and berth elevation: As the entire portareas as well as the existing approach roads are at uniformelevation, it is proposed to keep the elevation for entireport complex as well as storage areas at the existingelevation of wharf.


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1. Width of channel: Considering the vessel sizecontemplated, the existing width of the entrance channel ismore than adequate (350 m wide).

2. Depth of channel: The depth of channel at present is 6.5meter, which will be increased to -10.0 m if dredging isrequired to be carried out in berthing areas in future forbigger size vessels.

Navigational aids : Considering the width of entrance channeldefined by the breakwaters and the light house , no specialnavigational aids are necessary except the marker buoys fordefining the navigational channel in the centre of entrancechannel and to be further extended in the approachchannel.


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Cargo handling equipment : In Phase- 1, the equipmentsfor cargo handling are considered common for both general

cargo, bulk cargo and containerized cargo in the form ofmobile cranes or fixed cranes of 20 tonnes capacity with aradius of about 20 m . For Phase -2, while the facilitiesprovided in Phase -1 will continue to be used on existingwharf. The new container wharf will be provided with

container handling cranes moving on rails with a capacity of25 tonnes at a radius of 25 to 30 m.

Land requirements: The existing land area includingdeveloped land by reclamation works out to about 60 acres

which is considered sufficient for various activities of theports and the storage requirements of Phase 1 and Phase 2with provision for additional requirements in the future.


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Planned costs for development of the Thankassery port:Theimmediate focus is to utilize the existing infrastructurecreated by State Government and then invest further,especially in machineries and equipment, to complete theport which can handle the envisaged cargo.

CostEstimates.docx
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The proposed port at Thankassery shall price its services

competitively in order to provide a cost feasible logisticsgateway to its end customers.

The tariffs so determined are different for coastal vessels andfor foreign going vessels.

The tariffs for containers and general cargo consist of two

major components, namely: Vessel related charges: includes port dues, pilotage charges

and berth hire charges

Cargo related charges: includes:

Handling charges -Between ship and container yardBetween container yard and CFS

Between container yard and truck


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Heading Cost parameter Unit of

MeasurementContainer vessels

Vessel related

charges

Port dues Rs. per GRT 4.00

Pilotagecharges

Rs. per GRT 5.00

Berth hirecharges

Rs per GRT perhour or partthereof

0.10

Cargo related

charges

Wharfagecharges

Rs per TEU 250.00

Cargohandlingcharges

Rs per TEU 250.00


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The NPV and IRR calculations have been carried out and the

overall financial projections have been projected for a periodof 30 years from 2011to 2040. The financial projections showthe financial performance and position over the investmenthorizon

Identification of revenue streams: Traffic forecasts

Year Bulk ( Mn

Tonnes)

Container ( Mn

Tonnes)

Total Cargo (

Mn Tonnes)

2015 1.527 0.680 2.207

2020 1.904 0.814 2.718

2025 2.398 0.989 3.387

2030 3.040 1.215 4.255

2035 3.839 1.504 5.343

2040 4.937 1.868 6.8057


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Investment in capacity developmentSr No Phase Time frame

considered

Amount in Rs.

million

1 Existing

infrastructure9

Till 2020 308.20

2 Phase I Till 2020 400.00

3 Phase II From 2020

onwards

1,250.00

Total 1,958.20


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Debt / equity financing assumptions

Assumption Description Unit

Debt percentage 70%

Equity margin 30%

GoKs share in equity 49%

Developers share in equity 51%

Cost of long term secured debt 10%

Cost of equity 13%

Interest on Unsecured loan 8%

Margin money for Working Capital 40%

Interest on Working Capital 11%

Debt repayment period 10 years

Moratorium period 2 years

Construction period for Phase II 2 years

Working capital Average receivables 0.5 month

Working capital Average payables 0.5 month


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The following factors need to be taken into consideration:

Life of each type of infrastructure / equipment / asset Nature / frequency of repair works required

Nature / frequency of maintenance works required

The efficiency of operations conducted

OperationsExpense.docxPort related assumptions: PortAssump.docx
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Item

No. of years

SLM WDV

Rate %

Land & Land Development - 0%

Buildings 60 10%

Marine Structures 40 10%

Machinery and equipments 20 15%

Utility (Water, electricity,

commn & firefighting)

15 15%

Furniture & fixtures 15 15%

Capital dredging 60 10%

Depreciation and tax expenses :


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Based on the assumptions and estimates, the profit

and loss statement and cash flow statement for theproject were prepared

Projected revenues

Year Revenues

2015 176.432020 423.20

2025 596.75

2030 1077.54

2035 1945.62

2040 2411.78


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Profitability

Financial indicators NPV, IRR and DSCR

Year EBIDTA

2015 91.53

2020 253.17

2025 365.20

2030 689.53

2035 1525.75

2040 2273.77

Description Amount

Internal Rate of Return

(IRR) in %

12.51

Net Present Value (NPV)

in Rs. Million

205.09

Payback period in years 15

DSCR Phase I 1.82

DSCR Phase II 2.81


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Documents

DPR _final