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Development of Cruise Tourism in Karnataka GOVERNMENT OF KARNATAKA INITIATIVE GOVERNMENT OF KARNATAKA INITIATIVE DEVELOPMENT OF RIVER CRUISE IN KARNATAKA PROJECT REPORT TOURISM PROJECTS FOR INVESTMENT OPPORTUNITIES INVEST KARNATAKA 2016 January 2016
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Page 1: GOVERNMENT OF KARNATAKA INITIATIVE INVEST KARNATAKA ...

Development of Cruise Tourism in Karnataka

GOVERNMENT OF KARNATAKA INITIATIVE

GOVERNMENT OF KARNATAKA INITIATIVE

DEVELOPMENT OF RIVER CRUISE IN KARNATAKA

PROJECT REPORT

TOURISM PROJECTS FOR INVESTMENT

OPPORTUNITIES

INVEST KARNATAKA 2016

January 2016

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Table of Contents

1. INTRODUCTION ............................................................................................................................................. 4

PROJECT IDEA ................................................................................................................................................................ 4

OBJECTIVE .................................................................................................................................................................... 5

SCOPE .......................................................................................................................................................................... 6

APPROACH AND METHODOLOGY ....................................................................................................................................... 6

LIMITATIONS ................................................................................................................................................................. 7

2. SECTOR PROFILE ............................................................................................................................................ 8

INDUSTRY OVERVIEW ...................................................................................................................................................... 8

INDIAN CASE STUDIES ................................................................................................................................................... 13

REGIONAL PROFILE ....................................................................................................................................................... 16

NEED FOR THE PROJECT ................................................................................................................................................. 18

KEY ISSUES .................................................................................................................................................................. 18

3. PROJECT CONCEPT ....................................................................................................................................... 20

DESCRIPTION OF THE PROJECT ........................................................................................................................................ 20

COMPONENTS OF THE PROJECT ....................................................................................................................................... 21

SITE ........................................................................................................................................................................... 23

DEVELOPMENT NEEDS, PUBLIC NEEDS AND PLANNING CONSIDERATION ................................................................................. 27

4. MARKET ASSESSMENT ................................................................................................................................. 28

INDUSTRY OUTLOOK – MARKET DEMAND ......................................................................................................................... 28

SWOT ANALYSIS ......................................................................................................................................................... 29

5. STATUTORY AND LEGAL FRAMEWORK ........................................................................................................ 31

DRAFT RIVER CRUISE POLICY, 2009 ................................................................................................................................ 31

INLAND WATER POLICY ................................................................................................................................................. 32

GUIDELINES FOR PRIVATE INVESTMENT IN INLAND WATER TRANSPORT (IWT) SECTOR .............................................................. 32

INLAND VESSELS ACT 1917 (I.V. ACT) ............................................................................................................................. 33

INLAND WATER AUTHORITY OF INDIA ACT 1985 (IWAI)..................................................................................................... 33

RIVER BOARDS ACT, 1956 ............................................................................................................................................. 34

RECOMMENDATIONS FOR RIVER CRUISE DEVELOPMENT ...................................................................................................... 34

6. ENVIRONMENTAL & SOCIAL IMPACTS ......................................................................................................... 36

ENVIRONMENTAL IMPACT .............................................................................................................................................. 36

SOCIAL IMPACT ............................................................................................................................................................ 37

MITIGATION MEASURES ................................................................................................................................................ 37

7. PROJECT FINANCIALS ................................................................................................................................... 38

GENERAL ASSUMPTIONS ................................................................................................................................................ 38

COST ESTIMATION ........................................................................................................................................................ 39

REVENUE STREAMS....................................................................................................................................................... 41

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VIABILITY ASSESSMENT .................................................................................................................................................. 42

SCENARIO ANALYSIS ..................................................................................................................................................... 42

8. OPERATING FRAMEWORK ........................................................................................................................... 43

RISKS AND MITIGATION ................................................................................................................................................. 43

INDICATIVE PROJECT STRUCTURE ..................................................................................................................................... 44

INDICATIVE QUALIFICATION AND SELECTION CRITERIA ......................................................................................................... 46

9. WAY AHEAD ................................................................................................................................................ 48

GOVERNMENT OBLIGATIONS FOR DEVELOPMENT ............................................................................................................... 48

PROJECT DEVELOPMENT FRAMEWORK ............................................................................................................................. 48

10. CONCLUSION ........................................................................................................................................... 50

ANNEXURE 1 ........................................................................................................................................................ 51

ANNEXURE 2 ........................................................................................................................................................ 62

List of Tables

TABLE 1: TOURIST ARRIVALS FOR CRUISING IN INDIA .................................................................................................................. 9

TABLE 2: INDICATIVE TARIFF FOR HOUSE BOATS IN KERALA ....................................................................................................... 15

TABLE 3: COMPARATIVE ANALYSIS OF RIVER COURSES IN KARNATAKA ......................................................................................... 17

TABLE 4: CRUISE LINERS IN INDIA ......................................................................................................................................... 21

TABLE 5: POTENTIAL MARKET DEMAND FOR RIVER CRUISES IN KARNATAKA .................................................................................. 29

TABLE 6: SWOT ANALYSIS ................................................................................................................................................. 29

TABLE 7: DEMAND ASSUMPTIONS ........................................................................................................................................ 38

TABLE 8: TRIPS ASSUMPTIONS ............................................................................................................................................. 39

TABLE 9: OCCUPANCY OVER THE YEARS ................................................................................................................................. 39

TABLE 10: FINANCING ASSUMPTIONS ................................................................................................................................... 39

TABLE 11: COST ESTIMATES ................................................................................................................................................ 39

TABLE 12: OVERALL INVESTMENT REQUIREMENTS FOR RIVER CRUISE TOURISM IN THE STATE ........................................................... 40

TABLE 13: O&M EXPENSES ASSUMPTIONS ........................................................................................................................... 40

TABLE 14: O&M EXPENSES ............................................................................................................................................... 41

TABLE 15: REVENUE STREAMS ............................................................................................................................................ 41

TABLE 16: SENSITIVITY ANALYSIS ......................................................................................................................................... 42

TABLE 17: RISK MATRIX .................................................................................................................................................... 43

TABLE 18: PROJECT STRUCTURES......................................................................................................................................... 46

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1. Introduction

Department of Tourism (DoT) Government of Karnataka (GoK) is determined to boost the tourism

industry in the state. The Tourism Sector has been identified as one of the key sectors propelling the

country’s economic growth. Karnataka State has been ranked as the 3rd preferred destination among

domestic tourists in the tourism sector. Karnataka’s thriving economy has created many opportunities

across the State in the last decade.

For GoK, the tourism sector constitutes a real priority because it is an important sector for the

generation of employment, therefore various initiatives are been undertaken with the involvement of all

stakeholders, both public and private, that will foster a more favourable environment for the

development and consolidation of the tourism sector. One of the initiatives in this direction is the

formulation of Karnataka Tourism Policy for 2015-20.

GoK intends to encourage the investors to invest in the tourism sector. A host of incentives and

concessions are provided to the investors in tourism sector, in the New Tourism Policy for 2015-20. A

large emphasize has been laid on enhancing hospitality services and standards, promoting innovative

developments and rejuvenation of older tourist attractions, with the aim of offering visitors the

experience that will commensurate with higher expectations.

With this background, DoT has prepared a shelf of Project Reports of potential tourism projects which

could be undertaken for development along with collaboration with the Private sector. One of the

projects identified for development of River Cruise in Karnataka.

Project Idea

River Cruise Tourism is a distinctive tourism experience which is an amalgamation of luxury, comfort

with state-of-the art exclusive facilities. The unique features of cruise tourism can be summarized as

follows:

Highly service-oriented

Cruises provide exclusive hospitality services and other facilities including pool, Jacuzzi, sauna, gym,

on-board lectures, card rooms, ayurvedic spa, organized games and contests, lounges, nightclubs,

movies, dancing and more.

Home away from Home feel

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State-of-the-art, well furnished rooms, well equipped with telecommunications equipment,

including in cabin ship-to-shore phones (mandatory for marine cruises) make the passengers feel

comfortable and feel at home in the cruise.

Multiple Destination visits

Cruising offers multiple destinations, without the hassles of packing and unpacking. Itineraries

include visits to 8 to 10 destinations (depending on length of cruise).

As per various surveys conducted, the feature of visiting various destinations by traveling through

rivers makes cruise tourism attractive and fascinating. In the Indian scenario, since the concept of

cruises is not yet popular, people would travel for the experience of cruise and not really for

destination. Hence, for a cruise to be successful and attract the local as well as foreign tourists, the

complete package should include a floating resort feel on the ship/ boat/ vessel combined with the

array of exotic destinations.

River cruises are liners that carry tourists aboard, travel in the inland waterways and usually dock

along the river in the cities. River cruise ships are usually smaller vessels, generally accommodating

between 100 and 200 passengers. Depending on the river course (feasibility to navigate ships) and

the demand for cruise travel, river cruising vessels vary in size (those catering for smaller groups of

5-6 passengers and the capacity of catering to more than 1000 passengers).

Due to their smaller size and low draft, river vessels sometimes can go where no other

transportation can, taking passengers to the heartlands of countries where rivers are the only way

to reach many attractions. River cruises are the best way to experience the wilderness in reserve

forests, for instance, the Amazon river cruise which moves through the dense jungles of the region.

Objective

GoK intends to develop cruise tourism related infrastructure in Karnataka to:

i. Attract footfalls, encourage extended stays and provide a wholesome experience to the tourists.

ii. Encourage entrepreneurship and livelihood opportunities for the locals.

iii. Encourage and promote Private Sector Participation in the development of tourism sector.

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Scope

The scope of the assignment includes review of inland waterways in Karnataka, analysis of the present

status of river cruise tourism in India, identifying possible issues for development and implementation of

the project and estimation of broad project costs and financial feasibility assessment.

Approach and Methodology

The approach and methodology adopted for the project are given below:

Secondary Research

The objective of this study would be to assimilate the available information and assess the existing

facilities and arrive at relative advantages, constraints, issues for identification/ finalization of project

requirements. The potential for river cruises in various waterways in Karnataka would be studied on the

basis of discussions held with the stakeholders and potential locations would be identified. The

infrastructure requirements for the project development would also be assessed.

Past studies conducted, similar projects developed on a PPP model and growth directions would be

examined in order to review the findings. The legal issues in the development of river cruises would be

addressed.

Financial feasibility analysis

Based on the data collection, analysis and discussions with stakeholders concerned; a financial model

would be prepared. Suitable assumptions regarding the cost, revenue sources and expenses would be

made. A preliminary financial feasibility would be undertaken to assess the development potential of

Prioritisation of locations

• Secondary research - review of inland waterways

Financial Analysis

•Cost, Revenues, O&M Assessment

Identification of Key Issues

•Environmental

•Social

Implementation Structure

•Review of legal and statutory, project structuring

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the site. The financial feasibility analysis would consist of cost and revenue streams estimation, viability

assessment and scenario analysis.

Identification of Key Issues

The economies of the project would be reviewed to identify the key risks associated with the financial

viability of the project and indicative mitigation strategies and risk sharing arrangements would be set

out. Other issues relating to project development would also be highlighted.

Implementation Structures

Based on the market assessment and preliminary financial feasibility analysis, the type of PPP

frameworks best suited for development would be identified. For the suitable PPP option, the risk

analysis and mitigation measures would be studied. Indicative qualification and selection criteria for the

private developer would be set out.

Limitations

The limitations of this assignment are listed below:

1. Findings of the assignment would be on the basis of secondary research.

2. Financial model for a standard model of river cruise would be prepared which could be replicated

in the different river cruises.

3. Technical studies such as hydrographic studies for feasibility of river cruises would have to

undertaken apart from this study before venturing into river cruise development.

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2. Sector Profile

River cruises have been predominantly present in rivers that have excellent navigation systems. Cities

like Venice and villages in the backwaters of countries like China and India (western coastline and the

north-eastern States) thrive on river and canal cruises for livelihood. Some of the best examples of river

cruises come from river Amazon, river Nile and river Thames. This chapter discusses the overview of

river cruises industry in India and abroad.

Industry Overview

The following statistical highlights that reveal the growth trends in the global cruise tourism industry:

Over the last decade, the cruise industry has been one of the fastest growing sectors in the

international tourism industry and during the course of 1990’s, the industry tripled in size. As of

January 1, 2004 there were 339 active ocean cruise vessels operated by cruise lines around the

world, with the global fleet amounting to a total of 10.9 million gross tons.

Statistics reveal that by the year 2000, the cruise sector alone was carrying an estimated 9

million passengers on 243 vessels. By 2001, it was carrying 10.3 million passengers which

constituted 1.5% of global travelers who used cruise liners making it a $15 billion industry.

Cruise Lines International Association (CLIA) reports an unprecedented 16.8 per cent annual

growth in passenger numbers in US market alone.

Following the events of 11 September 2001, passenger numbers fell dramatically due to

resistance to air travel (to reach cruise-ship ports). However, as per WTO reports, the industry

returned to its previous buoyancy, but with a more moderate growth rate. Cruise ship

passengers currently represent 1.4% of international arrivals and are producing increasing

amounts of revenues in all locations.

Cruising in the Indian Tourism market is growing and there has been an increasing interest in cruise

tourism activities over the past decade. The absence of an affordable cruise along the Indian coastline

and inland rivers is one of the critical reasons for the lack of popularity of cruises among masses. Given

below is the table which sets out the tourists for cruise:

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Table 1: Tourist arrivals for Cruising in India

Year Cruise Tourists (in millions)

Increase in Cruise Tourists (%)

International Arrivals (in millions)

Cruise Tourists as a % of International Arrivals

2000-01 0.041 70.83 2.54 1.61

2001-02 0.019 -53.66 2.38 0.8

2002-03 0.012 -36.84 2.73 0.44

2003-04 0.025 108.33 3.36 0.74

2004-05 0.022 -12 3.73 0.59

Indian ports have been able to attract substantial number of cruise vessels and tourists in recent years.

This trend of cruise tourist arrivals, mainly since 1996, has grown each year. However, the years

immediately after year 2000-01 show a marked decline. This is similar to trends observed

internationally. A percentage of international tourists arriving into a country are generally interested in

undertaking short exploration cruises in and around the country as part of their overall travel plans.

However, due to practically non-availability of facilities for cruise activity in India, this segment has been

untapped as yet.

India has over 7,500 km of coastline with places of great interest for the cruise guest. Government of

India, as part of its Cruise Tourism development initiatives has identified 6 Indian ports to be developed

as ‘world class cruise terminals’ and to be promoted as ‘integrated Indian cruise circuit.’ These identified

Ports include Mumbai, Goa, Cochin, New Mangalore, Tuticorin and Chennai. Mangalore port lies in

Karnataka with Goa and Cochin in the vicinity. Presently Mangalore port shares a small portion of cruise

tourists compared to other ports as cruise tourism has not been promoted in Karnataka. At the same

time, Mangalore port has the technical competence, Locational advantage as well as good inland and air

connectivity to be showcased as a call port for Karnataka.

However, all the studies pertaining to cruises are limited to the international marine cruises, the market

for river cruises in India is still a small segment. It is in its nascent stages and requires development in

terms of infrastructure development.

For better understanding of river cruises and their mode of functioning/ operations; some of the notable

international case studies in river cruises are discussed herein below:

Amazon River Cruises

There are many cruises that operate along the river cruise of Amazon which is world famous for the

presence of rainforests and wilderness along its course. Details of few of the cruises that operate along

Amazon are given herein below:

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Manatee Amazon Explorer Riverboat in Ecuador

The Amazon River system is the one which flows through the

world's largest primeval forest, containing 10% of all existing trees,

70% of all pharmaceutical compounds, and native Indians that live

symbiotically with their unique bio-systems. This is the habitat of

wildlife comprising freshwater dolphins, 500 species of birds, half a

dozen species of monkeys, caimans, tapirs, 2500 species of

butterflies. The new Manatee Amazon Explorer riverboat has been

specially built for cruises in the Ecuadorian rainforest on the Rio Napo.

It visits the Monkey Island, Yasuni National Park and Biosphere Reserve, walk jungle trails and explore virgin

rain forest. The Manatee Amazon Explorer is 90 feet long (27 m) 24 feet wide (7 m) and accommodates 30

passengers in comfortable cabins with private bathrooms and running hot water, individual air conditioning,

on board laundry service, large dining room, inviting bar and lounge area, panoramic terrace, delicious

cuisine and multilingual naturalist guides. It is also equipped with the highest safety standards, personable

service and efficiency.

Manaus cruise in Brazil

The cruise offers an exciting cruise along the Negro and

Amazon rivers with all the comfort and excellent service. The

adventure begins in the city of Manaus, capital of Amazonas,

famous for its spectacular Opera House, designated as

Brazilian historical heritage. Departing from Manaus, the

expedition vessel stops at several points along the amazing

Amazon jungle, and offers excursions on small boats or zodiacs

to explore the dense, virgin vegetation. Adventure seekers

during the cruise come into contact with the most exuberant species of trees, plants, exotic animals and

the local river communities, friendly and hospitable people. Activities proposed during the cruise are

bird-watching, National park visits, wildlife reserve visits, Piranha fishing, trekking, nature hikes, canoe

rides, night excursions and lectures.

Mamore river expedition on board the Flotel Reina de Enin in Bolivia

It is a four day Amazon Riverboat expedition which is a hands-on

discovery of remote Amazon rainforest and rivers near the

Bolivia/Brazil border. The newly renovated, air-conditioned Reina de

Enin Riverboat, explores Bolivia's remote wilds on horseback, hikes,

nature-walks, motorized launch excursions, and from the comfort of

the Reina's viewing decks. Equal in size to California and Texas

combined, Bolivia holds thousands of unexplored Inca and pre-Inca

ruins, thousands of square miles of Amazon rainforest, unsurpassed wildlife viewing, and very few

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tourists. It is the least populated, least explored of the nine South American countries that comprise the

Amazon Basin. Annual flooding in the Bolivian Amazon ensures minimal human presence and allows

over 1,300 bird, 220 reptile, 100 amphibian, 20 primate, 316 mammal, and thousands of plant species to

dominate. That is the case in the Beni area of Bolivia, where the 2000-mile long Mamore River, the

longest tributary on Earth, floods annually and keeps the region wild.

Iquitos Amazon cruises: Pacaya Samiria reserve, Tres Fronteras & Yurimaguas in Peru

The cruise offers an itinerary of seven days which primarily

would be in the wilderness. The reserves in the region provides

critical habitat for the grey and pink river dolphins, Amazonian

manatees, the black and spectacled caiman, giant South

American river turtle, saddleback tamarin and many monkeys

including the spider, capuchin, and squirrel species. A

preliminary survey of birds has listed over 350 species, of the

eight species of macaw recorded in Peru, five are found in the reserve. This protected area contains 85

lakes which are home to 250 species of fish and the largest variety of flora in Peru, including 847

different species of plants and trees (22 recorded species of orchids). The cruise would take the

passengers amidst the reserves and make them experience nature.

Nile River Cruise

There are many cruises that operate in river Nile and its tributaries, a few of which are discussed herein

below:

River Tosca Cruise

The River Tosca cruise sails the Nile River in luxury and style.

The ship features 42 suites with French balconies, hotel-

style beds and a private bathroom. Each suite is furnished

with a direct dial telephone, a flat-screen TV and an iPod

docking station. Gourmet cuisine is prepared fresh daily

using only the fresh and finest ingredients, often brought onboard from the local markets. Bottled water

and 24-hour specialty coffees and teas are provided in the suite. The cruise offers sunbathing in the

Egyptian sun at the cabana-lined pool or observing the banks of the Nile on the sun deck. At night, there

is onboard local entertainment in the stylish lounge with full-service bar.

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M S Miriam Cruise

The cruise has a spacious, tastefully furnished lobby

provides a warm welcome into the hospitable vessel. Cabins

are roomy and comfortable, and a 24-hour reception desk

ensures security. The main lounge bar features a dance floor

for evening entertainment which includes an Egyptian

folklore show and discotheque at night. A separate bar area with comfortable Chesterfield sofas offers

panoramic views and a restful place to relax with a book. It has 56 cabins with a passenger capacity of

110.

M S Medea

It is cruise with a passenger capacity of 118 and 60 cabins.

A spacious, elegantly furnished lobby area with 24-hour

reception desk and safe deposit box is both welcoming

and reassuring in the cruise. Currency exchange is

available on board and the lounge is an ideal spot for

relaxing. In the late evening, the Lounge bar serves as discothéque emerges as a venue for live evening

entertainment. All cabins feature en-suite bathrooms and views of the Nile.

Thames River Cruise

River Thames of England is also known for its river cruises, a few of which are mentioned herein below:

Princess Thames Cruise

The cruise navigates along the river Thames and is best suited to

organize events such as disco parties and also to enjoy the life along

the banks of river Thames. It has a passenger capacity of buffet dance

for 200 guests in closed saloon or 250 when the open top deck is

utilized. Dinner dance could be arranged for 130 guests and sight-

seeing for 250 passengers. It has dimensions of length, 115 feet and

breadth of 18 feet.

Old London Cruise

This cruise is having dimensions of length 66 feet and breadth of 16 feet. It is smaller than the Princess

Thames Cruise vessel but is also put to similar use. The life on the banks of the river Thames can be

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experienced in the cruise. The passenger capacity of the cruise is

130 guests for buffet dance, 106 guests on two decks for dinner

dance or sight-seeing for 140 passengers.

City Cruises also operate on river Thames that offer day cruising

packages such as lunch cruise, dinner cruise, sight-seeing cruise

along the river.

Indian Case Studies

There are many river cruises operating in India, primarily in the northern plains which are home to large

perennial rivers of like the Ganga and the Brahmaputra. In addition to the cruises in the northern plains,

backwater cruises in Kerala and the Mandovi river cruise in Goa are equally popular among the tourists.

An account of the major river cruises that are in operation or under development, in India is given

below:

Brahmaputra River Cruise

Brahmaputra River Cruise is maintained by a private company in the

name of Brahmaputra Cruise Private Limited (BCPL). The

Brahmaputra cruises provide tourists with unprecedented chance of

getting up close and personal with the only ‘male river’ in the Indian

subcontinent. The cruises features visits and attractions such as the

elephant and jeep safaris at Kaziranga National Park, tea gardens,

visits to Majuli (largest river island), visits to temples (Maa Kamakhya,

Shiv Temple - Sivasagar) and forts which once belonged to the Ahom

Kingdom and many more.

Passenger Capacity

The cruise vessels of Brahmaputra Cruises vary in size. The smallest vessel caters to 24 passengers

whereas the largest vessel caters to 308 passengers.

Itinerary and Duration

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Cruises go north from Calcutta on river Hoogli, and can be linked with other cruises on the Ganges

proper from the Bangladesh border up to the historic city of Patna. The duration of this package is of 3

nights and 4 days.

Another package is the Cruise in Assam on the Brahmaputra – the course of this cruise is beautiful with

marvellous bird life and occasional spotting of Gangetic Dolphin. The cruises here also give access to a

number of India’s National Parks, including Kaziranga and Manas, a Project Tiger reserve on the Bhutan

border. The duration of this package is of 7 nights and 8 days.

Tariff

On twin sharing basis 350 USD per passenger per night and for single supplement is 210 USD.

Ganga River Cruise

Ganga River Heritage Cruise (GRHC) Circuit is being proposed to experience the Ganges. This would

bring a unique experience to tourists and avoid the usual hassles/bustles of rail or road transport with

multi-point transfers and transits. To provide the tourists/pilgrims with the right and tranquil

environment, even the land based stay will not be in Hotels or Guest Houses but at “Pilgrimage Park”

being exclusively provided to the tourists to enjoy the facilities like yoga, meditation, dharma sabha,

vegetarian meals, library and auditorium under one roof compatible with pilgrimage activities and

ambience.

Project Cost

Is an on-going project with an Estimated Project Cost of Rs. 130 Crores.

Itinerary and Duration

The GRHC Circuit is made out of selective tourism destinations covering the pre-colonial, colonial and

post colonial era on the river Ganga with Kolkata as the gateway. The modes in the proposed circuits are

Kolkata, Belur, Dakshineswar, Chandannagar, Chinsurah, Bandel, Kalna, Krishnanagar, Nabadwip,

Mayapur, Palashi, Baharampur, Murshidabad-Lalbag and Azimganj.

Houseboats in backwaters of Kerala

Kerala’s luxury packed house boats offers to tourists, a cherished and unforgettable backwaters

experience. It would be a blend of tradition with modern amenities. It would cruise over the

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breathtakingly beautiful backwaters where the tourists enjoy amazing

sightseeing with nature abundant beauty. Often the local cuisines of

Kerala are served on these house boats.

Passenger Capacity

There are single bedroom houseboats for two people and two

bedroom houseboats for four people and three bedroom houseboats

for six, and five bedroom houseboats for ten people.

Itinerary and Duration

The cruise covers the beautiful rivers and canals with palm trees and small houses near to it, villages,

paddy fields, churches, etc, the duration will depends on the packages tourist used to select.

Tariff

Table 2: Indicative Tariff for House boats in Kerala

Type of Houseboat (in Rs.) / Night in (USD) / Night in (EURO) / Night

A/c (9PM-6AM) Houseboat 15, 000/ 395 315

A/c( full time) 19,000/ 440 355

Non A/c Houseboat 14500/- 355 285

Cost for an additional person (above 4 yrs) in the same room: Rs 1000

River Cruises in Goa

Goa is not only about golden beaches spread for miles but also about scenic rivers that make it the best

possible destination for long river cruises. Goa is well known for cruise tourism in India and people who

visit Goa generally make it a point to experience the river cruises there. River cruises contribute

immensely to the State's tourism industry and the river cruise industry in Goa is expanding day-by-

day. The different types of packages offered by river cruises in Goa on the Mandovi River are as follows:

Sunset Cruise: to enjoy cultural programs including the various types of dances. Sightseeing is also the

part of the sunset cruise.

Time: 6:00 pm to 7:00 pm

Sundown Cruise: Similar to Sunset cruise.

Time: 7:15 pm to 8:15 pm

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Full Moon Cruise: trip offers a good chance to get a magnificent view of the moon.

Time: 8:30 pm to 10:30 pm

Pleasure Cruise: is a long trip which starts off by 10.00 am and ends at 3.00 pm. The trip includes

sightseeing. On the way you can enjoy the music along with sun bathing.

Passenger Capacity

About 25 – 50 people

Itinerary and Duration

The itinerary and duration will depend on the packages.

Tariff

This varies according to the package offered.

Regional Profile

Apart from the backwater cruises, Karnataka also has tremendous potential for development of river

cruises along the river courses of some major rivers such as Cauvery and Tungabhadra. The same has

been discussed in this chapter.

Karnataka had introduced a house boat which cruised the backwaters in the coastline. It was

commissioned by the Jungle Lodges and Resorts Limited, Department of Tourism, Government of

Karnataka located at Kemmannu-Hoode backwaters of Udupi taluk. However the project as shelved due

to lack of proper marketing efforts.

Major Rivers of Karnataka

Karnataka is blessed some of the large rivers in India such as Cauvery, Krishna and Tungabhadra. These

major rivers would have potential for cruise tourism which would depend on the river itself as well as

other externalities. An account of the major rivers of Karnataka is set out as Annexure 1 to this report.

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A comparison of the river courses of the major rivers in Karnataka is given herein below:

Table 3: Comparative analysis of river courses in Karnataka

River Length approx (in km)

River Course Tourism Potential Theme Prospects for river cruise

Cauvery 765 Waterfalls, reservoirs, flows through reserve forests and valleys, perrineal river

Coorg, Mysore, Srirangapatnam, Bangalore

Wildlife, Nature, Religious

Conducive in few of its tributaries

Krishna 1300 Waterfalls, fast flowing river, perrineal river

Leisure Not very conducive

Tungabhadra 531 Formed by Tunga and Bhadra, perrineal river

Shimoga, Hampi, Koppal, Haveri Religious, Heritage, Leisure

Conducive

Sharavathi 128 Waterfalls (Jog), reservoirs, dense underwater vegetation, flows along the reserve forests, perrineal river

Shimoga, Jog, SAgar Nature, Wildlife Conducive

Kali - Waterfalls, fast flowing river with rapids, dense underwater vegetation, perrineal river

Dandeli Wildlife, Nature Not Conducive

Kabini - Tributary of river Cauvery, relatively slow moving river, perrineal river

Mysore, Nagarhole, Coorg Wildlife, Nature, Leisure Conducive

Sita - Waterfalls, dense underwater vegetation, non-perrineal river

Agumbe, Udupi Wildlife, Nature, Leisure Not very conducive

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The factors that determine the conduciveness of the rivers depend on the type of river course, the

depth of the river, its length, river bed, quantum of water flow round the year and also the width of the

river. The suitability of the river for cruising is also dependant on the urban life along the rivers like

presence of industries, factories, reserve forests, temples, etc. The above table is based on discussions

with the PWD IWT Department and Department of Tourism.

Need for the Project The need for the project is felt owing to the following reasons:

Availability of more that 3000 kms of rivers in the State

Need to boost up the Tourism Industry in Karnataka

Rising middle class & Increased Affordability

Providing an unique experience to the visitors

Expected Increase in Tourist Footfalls

Encourage livelihood opportunities for the local population.

Key Issues

The key issues in the project are set out in the following figure:

River Cruise

Connectivity of Rivers

Conducive River

Course

Rationalisation of laws

Tourism potential

Low Return on

Investment

Basic Infrastructu

re

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There are certain factors that determine the feasibility of river cruise which are given herein below;

1. Availability of related infrastructure for river cruises,

2. Connectivity of major rivers for longer navigation,

3. Tourism potential along the river course,

4. Topography along the river course,

5. Long gestation period and high operational costs with low return on investment in the business

and

6. Rationalization of laws relating to river cruises.

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3. Project Concept

The chapter discusses the infrastructure development proposed for development of river cruise in the

four backwaters referred to in the earlier chapter. Two models of development are proposed as part of

this assignment which can be thought through and implemented in any of the backwaters in the State

after undertaking a technical feasibility study.

Description of the Project

Based on the analysis of the existing river cruises in the country and abroad, the following two models of

river cruises are proposed as part of this project:

1. Day Cruise

2. Day and Night Cruise

The rivers in Karnataka cannot support cruises of longer duration owing to the unsuitable terrain and

topography. Hence, a day cruise and utmost a day and night cruise is proposed in certain rivers to begin

with for river cruises in Karnataka.

Day Cruise

The day cruise is proposed to be a cruise along the river which would have more of onboard

entertainment facilities which may include discotheque, billiards and pool table, indoor gaming room,

ayurvedic spa, yoga and recreation centre, a fine dining restaurant, a wildlife lecture, library, etc. The

day cruise would generally be cruising the rivers day time for a maximum of 7-8 hours a day. The idea of

entertainment in day cruise is the facility within the cruise liner rather than journey. The start and end

point of a day cruise would be one point where the tourists/ passengers assemble to embark and

disembark. The cruise would generally be devoid of luxury cabins as the objective of the day cruise is to

experience the facilities on the cruise rather than stay overnight in the cruise. The river cruises in Goa

are generally day cruises.

Day and Night Cruise

The day and night cruise is proposed to be a cruise which would cruise along the river for a day and

night (minimum of 24 hours). The purpose of this cruise would be transportation along with

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experiencing the facilities on the cruise. The cruise would have cabins for people on board to be

accommodated overnight. The vessel for a day and night cruise would be more expensive owing to extra

facilities that are required. Apart from the cabins, it would also require facilities such as restaurant,

ayurvedic spa, salon, meeting hall, etc. Ideally the cruise would commence at one point and end at

another point (destination). The Brahmaputra river cruise is a day and night cruise which has different

packages with duration as long as 15 days.

Components of the Project

The project components for both the models of river cruises are as follows;

1. Cruise liner

2. On board facilities

3. Off-board infrastructure

Cruise liners

The cruise ship specifications depends on the potential for cruise traveling, cruise travel circuit, number

of trips and the facilities to be provided for amusement of passengers on board. For the purpose of this

project, to estimate the demand references have been made to other similar river cruises operating in

the country. As discussed in the earlier chapters, the other river cruises operating in India, with their

passenger capacity is given herein below:

Table 4: Cruise liners in India

No. River Cruise Duration of Itinerary Passenger capacity

1. Goa on Mandovi River Day cruise Many vessels with passenger

capacity ranging from 25-50

2. Brahmaputra River Cruise Upto 15 days

Shorter itineraries available

Smallest vessel carries 24

passengers to the largest

carrying 308 passengers

3. Ganga Cruise (proposed) 7 days NA

4. Kerala backwater cruise

(houseboats)

Day and Night Cruise Upto 16 passengers per

houseboat depending on size

A point to be noted is that of all the river cruises in India, two belong to northern India which ply on the

rivers in the northern plains. The same is conducive for cruising as well. The river cruises on Mandovi

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river in Goa are day cruises for leisure. The backwater cruises in Kerala are cruises with shorter itinerary

of a day and a night that offer recreation and relaxation. However, the rivers in Karnataka offer a distinct

scenario, the rivers in Karnataka flow through the Western Ghats and the Deccan Plateau; both of these

regions have rugged and tough topography. Hence, the following observations:

1. The itinerary for the river cruise (wherever feasible) cannot be very long. It is ideal to have an

itinerary of a day and night.

2. The capacity of the vessel could be approximately in the range 50-75 passengers.

3. The same vessel could also undertake day cruising as well on certain days of the month.

Apart from the points set out above, the river cruise could also be designed as per the theme of the

cruise (such as heritage, religious, leisure, nature, wildlife, etc.)

On-board Facilities

The on-board facilities, to be provided for the amusement of passengers, are classified as mandatory

and optional facilities as listed below:

Mandatory Facilities

Cabins – are required in the event of a day and night cruise to accommodate the passengers

overnight.

Children play area – would consist of small area on the deck which would have slides, see-saws,

swings and other facilities for the children to pass time and play

Indoor games parlour –provision for playing indoor games like carom, chess, other board games,

etc.

Restaurant/ Fine dining restaurant – overlooking the river side is required to be developed. The

restaurant could serve local cuisine as well international cuisine. The ambience of the restaurant

could suit the theme of the cruise.

Optional Facilities

Social dancing – evening dancing in the moonlight or a discotheque may be provided on the

deck overlooking the river.

Ayurvedic Spa, Yoga and Meditation Wing – which would provide panchakarma and relaxation

techniques for passengers on board.

Magic shows/ entertainment – magic, cultural shows, etc. can be organized on board the cruise

for the recreation of passengers.

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Parties - parties and events can be organized on the liner

Video game parlors – would include the video and computer gaming facilities for the youngsters

to enjoy their time on cruise.

Games – ad hoc games may also be organized on board.

The extent and the number of on-board facilities required for the project would depend on the river

cruise (scenery), the theme of the cruise and the type/ profile of passengers who travel in the said

cruise. Accordingly suitable modifications may be made to the on-board facilities.

Off-board Infrastructure

The off-board infrastructure that are required for the project include the following:

1. Jetty facilities in the start and end points (base stations) of the river cruise.

2. A lounge area and a counter facility close to the jetty.

3. Dredging (if required) along the river bed.

4. Connectivity to the base stations of the river cruise.

5. In Case of Emergency (ICE) units along the river cruise.

Wherever the river cruise terminates or starts at a marine port, then the port infrastructure for

embarking and disembarking can be utilized. In other cases, where the base station happens to be a

river bank then, a jetty facility at the river bank would be required. Dredging would again be required on

a case to case basis. End mile connectivity to the base station would also have to be taken care of by the

concerned government departments. ICE units are advised to be in place at all times during the

operation of the cruise along the river cruise at specified intervals.

Site

On the basis of the analysis of the major rivers in the State, the following sites have been identified to be

the ones that have potential for river cruise:

1. Kabini Reservoir

2. Back-waters of Tungabhadra dam

3. Backwater of Linganamakki dam on River Sharavathi

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Kabini Reservoir

River Kabini the tributary of river Cauvery which flows through the reserve forests of the wildlife

sanctuary in the south eastern parts of the Nagarhole Wilddlife Sanctuary would be a very promising site

for river cruising to experience the exotic wildlife in the region. The surroundings of River Kabini and the

reservoir is set out in the picture given below. The said site would be conducive for a day cruise or a

night cruise or a day and night cruise as well. The Jungle Lodges and Resorts on the banks of river Kabini

could also provide the required thrust to the development of the river cruise.

The features of the river cruise in Kabini reservoir are as follows:

Annual tourist visits to Kabini River Lodge of Jungle Lodges and Resorts is about 1500 and the

resort enjoys 100% occupancy and has advanced bookings for the resorts

A day or a night cruise (full moon) would be suitable for the Kabini river with a deck passenger

capacity of 50-75.

The cruise would have facilities like the ayurved spa and massage centre, restaurant serving

local cuisine and a canopy overlooking the banks.

The map showcasing the Kabini reservoir and

the existing Jungle Lodges and Resorts is given

herein below;

JUNGLE LODGES

& RESORTS

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Backwaters of River Tungabhadra

River Tungabhadra formed by the joining of two rivers, the Tunga and the Bhadra is another potential

spot for river cruising. Tungabhadra flows close the world famous ruins of the Vijayanagar Empire at

Hampi, Bellary. Being in proximity to the World Heritage Site, the potential for river cruising in the area

would attractive. A day cruise would be ideal in the backwaters of the Tungabhadra dam and also at the

river course in proximity to the Hampi ruins. Though, the cruise proposed in proximity to Hampi ruins is

to be of smaller passenger capacity and size owing to the low draft and terrain. A houseboat would be

an ideal cruise in the area. River Tungabhadra is a chief tributary of River Krishna and though the general

opinion is that River Krishna is a destructive river due to its silting capabilities, River Tungabhadra still

possesses certain potential for river cruising.

The features of the river cruise in river Tungabhadra is as follows;

River Tungabhadra flows along the ruins of the World Heritage Site at Hampi. The annual

tourists visits to Hampi is about 15 lakhs hence, there is ample demand

The river cruise could ideally be a day/ a night cruise overlooking the Hampi ruins with a

commentary on the history and heritage of the erstwhile Viajyanagar empire and Anegundi. The

passenger capacity of the cruise on the deck could be about 50-75

The cruise vessel is to be ideally such that it can sail for a smaller draft and sustain the rocky bed

of the river. The facilities on the deck would be an ayurved spa, indoor games parlour that

facilitate local games like Channamane, Choukabara, etc, commentary/ video on the Hampi

heritage and culture.

The map given below shows the river course and the site for cruising in River Tungabhadra.

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Backwater of Linganamakki dam

River Sharavathi is well known in India for the high plunge it takes of the gorge at Jog, Shimoga forming

the highest waterfalls in India. In Shimoga there are two dams constructed across this river both which

give way to reservoirs. The Linganamakki reservoir is formed in an area which is rich in wildlife hence,

this area has tremendous potential for river cruising. The backwaters of the reservoir and the tract

which leads to Honnemaradu would be a hotpot for cruising.

The features of Sharavathi river cruise is as follows;

The annual tourist flow to Jog falls is 4.5 lakhs of which 99% are day tourists. The river cruise

proposed in the region would enhance the duration of tourist stays in the region. The idea is to

propose for a cruise of one day and one night duration in the backwaters of Sharavathi.

The passenger capacity of the vessel on deck would be about 75 and a cabin capacity of around

25-30 tourists.

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The facilities on board the vessel would include cabins, canopy area, ayurved spa and massage

centre, wildlife movie shows, commentary on the culture of Malnad region and a fine dining

restaurant serving local cuisines.

The map given below sets out the site for river cruising in along Sharavathi.

Development Needs, Public Needs and Planning Consideration

The developmental requirements for the project shall be in conformity to the existing by-laws and

regulations from time to time. The cruise vessel to be deployed shall be safe and secure, approved by

the appropriate authority for commutation of public.

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4. Market Assessment

This section would discuss the market for river cruises, the pros and cons of development, opportunities

and threats for river cruises in the State. A SWOT analysis for the same is also set out in this section.

Industry Outlook – Market Demand

The market for river cruises in India is latent and river cruising itself in India is in its nascent stages. The

Inland Waterways Authority of India has identified six National Waterways in the country but none of

these waterways are in Karnataka. All except one of the National Waterways lie in the northern India

and the one in southern India lies in Andhra Pradesh along river Krishna.

The River Cruises industry comprises the following stakeholders:

1. Department of Inland Water Transport

2. Department of Tourism

3. River Cruise Operators/ Cruise Liners

4. Ship Agents

5. Tour Operators

6. Provision suppliers

Development of infrastructure along the river cruise and provision for safe navigation would have to

ensured for the progress of river cruise in the country. In Karnataka, owing to the rugged terrain and

topography along the river cruise, safety of the vessels and the passengers is a matter of great concern.

The demand for cruise tourism in Karnataka is nascent and undeveloped. Hence, the market for cruise

tourism in rivers is determined by the segment in which the river cruises are proposed. The river cruises

are proposed in the lines of Jungle Lodges and Resorts. It would target international tourists and urban

middle and higher income domestic tourists who have a flair for eco-resorts, wildlife, heritage or leisure

activities.

The total number of international tourist arrivals in the State is approx 5.97 lakhs per annum and the

total number of domestic tourist arrivals in the State is approx 4.3 Crores per annum. On the basis of the

profile of tourist visits and the reason for their visits, the market demand for cruise tourism in Karnataka

is estimated at 55,000 per year. This is the indicative number of people who would be interested in the

cruise and also have the potential to undertake the activity.

The table given below sets out the demand estimation for river cruise tourism in the State.

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Table 5: Potential Market demand for river cruises in Karnataka

Particulars Arrivals

International Tourists visits in Karnataka in 2007 5,34,563

% increase in Foreign Tourist Arrivals 5.6%

Estimated number of International arrivals in Karnataka in 2009 5,97,240

Average Cruise Tourists as % of all international arrivals 1.4%

Expected International Tourists 8361

Karnataka Domestic Tourists in year 2007 3,78,25,953

% increase in Domestic Tourists 6.9%

Estimated number of Domestic Tourists in Karnataka in 2009 4,32,26,024

Higher and Middle Income Group 21.0%

Travel for Leisure 38%

Cruise Tourists as % of Leisure and Travelers 1.4%

Expected Domestic Tourists 48292 Source: Cruise Tourism Potential and Strategy Report and India Tourism Statistics, Ministry of Tourism, Government

of India, 2005-06

The numbers given in the table above comprise the potential tourists that visit Karnataka who would

also be interested in experiencing river cruises in the State.

SWOT Analysis

On discussions with the stakeholders and undertaking preliminary research on the project, a SWOT

matrix is developed for the project which is set out herein below:

Table 6: SWOT Analysis

Strengths Weaknesses

Karnataka accounts for 3.6% Domestic tourist visits & 3.7% of foreign tourist visits of national total for cruise tourism

Karnataka has well developed infrastructure

Major rivers in southern India like the Cauvery and the Krishna flow in Karnataka

Stable weather during the post monsoon season

Involves considerable set up cost.

Competition from the other tourism activities in Karnataka.

Non co-operation from locals due to cultural threats posed by Cruise Tourism.

Limited access to international tourists due to under developed air networks.

Poor promotional activities could lead to loss in business opportunities.

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Increasing inflow of people into the state on account of work & education

Large perrineal rivers found in the State suitable with potential for cruising

Non availability of basic amenities and necessary infrastructure at the base stations

Opportunities Threats

Since it a government initiative, necessary regulatory framework and policies can be suitably amended.

Demographics of the local market is under going a change & people are more open to the idea of weekly and monthly vacations

Through appropriate promotional activities, tourists who frequent Mumbai, Goa and Kerala can be lured to Karnataka.

It will result in overall economic development of the region

Inadequate waste disposal measures resulting in protests from environmental activists.

Low return on investment from the Cruise Business.

Competition from Mumbai, Goa and Kerala cruise networks could pose a threat.

Competition from macro players in other tourism segments, national as well as international

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5. Statutory and Legal Framework

Inland Water Transport (IWT) is an economic, fuel-efficient and environment friendly mode of transport.

India has an extensive network of rivers, lakes and canals which, if developed for shipping and

navigation, can provide an efficient network of inland transportation. An optimal mix of road, rail and

River Cruise or IWT will provide an efficient transport infrastructure with mobility, flexibility and cost

effectiveness.

Inland Waterways Authority of India (Ministry of Shipping, Government of India) is formulating “River

Cruise Policy” to promote River Cruise activities on Inland Waterways in the country by providing policy

support and fiscal incentives for creation of state of art infrastructure, and fleet augmentation of inland

tourism vessels in a sustainable manner.

The following are the policy and acts applicable to River Cruise are:

1. Draft River Cruise Policy, 2009

2. Inland Water Policy

3. Guidelines for Private Investment in Inland Water Transport Sector

4. Inland Vessels Act, 1917

5. Inland Water Authority of India Act, 1985

Draft River Cruise Policy, 2009 Inland Water Transport is operationally cheaper, high in fuel efficiency and environment friendly. It has

a vast potential to act as an alternate and supplementary mode of transportation in certain conditions.

In spite of a strong case for development of inland water transport, this sector has remained neglected.

Most of the inland waterways of the country suffer from lack of Inland Water Transport (IWT)

infrastructure namely navigational channel, terminals, and navigational aids. The difficulty in providing

navigable channel with targeted depth and width, many of the smaller waterways could not be

developed.

The development of navigational channel with adequate depth for navigation is more challenging since

it mainly depends on the availability of water in the waterway, particularly during the lean water

months.

Major bottlenecks identified include:

1. Insufficient fairway with depth less than 1.2 m in many waterways

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2. Lack of safe landing facilities

3. Inadequate shore facilities like ticket booking centers, information bureaus, rest rooms,

restaurants etc,

4. Non availability of amenities like toilet facilities, drinking water facility etc,

5. Absence of Night navigation aids

6. Bridges/Structure with insufficient clearances

7. Non availability of sufficient Inland River Cruise vessels with State of Art facilities

Inland Water Policy In order to provide an impetus to the development of inland water transport mode, an “Inland Water

Transport Policy” has been announced. It includes several fiscal concessions and guidelines for

encouraging private sector participation in development of infrastructure and ownership and operation

of inland vessels;

1. To actively promote the Inland Water Transport sector for it to take a reasonable share in the

inter-modal mix of inland transport.

2. Provision of necessary infrastructure for shipping and navigation and in augmenting the Inland

Water Transport fleet.

3. Large-scale private sector participation both for creation of infrastructure and for fleet

operations to supplement the government efforts.

4. For development of waterways for navigation with the necessary infrastructure such as

terminals, navigational aids and fleet so that the Inland Water Transport mode becomes

competitive.

5. Government to act as a provider, facilitator and regulator and, at the same time, offer various

concessions to the private sector for their effective participation by way of investment for

creation of enhanced Inland Water Transport infrastructure.

6. Interlinking waterways and ports holds good prospects in respect of several river systems in

India.

Guidelines for Private Investment in Inland Water Transport (IWT) Sector The development of infrastructure and services in the IWT sector needs mobilization of substantial

resources to improve the efficiency and quality of services. The IWT sector has been thrown open to

private sector participation. It is expected that private sector participation in the development of

infrastructure and services in the IWT sector would result in reducing gestation period for setting up of

the new facilities and services and bring the latest technology and improved management techniques.

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Areas of Private Participation The areas of private sector participation identified by Government are listed below:-

1. Ownership and operation of vessels for cargo and passengers

2. Fairway development and maintenance

3. Construction and operation of river terminals or river ports

4. Provision and operation of mechanized cargo-handling systems

5. Putting up and maintenance of navigational aids

6. Provision of pilotage services

7. Setting up and running of IWT training institutions

Inland Vessels Act 1917 (I.V. Act) The Inland Vessels Act, 1917 has been enacted to consolidate the enactments relating to Inland Vessels.

The Act empowers the State Governments to appointment surveyors and places of survey. For the

purposes of a survey, the surveyor has been authorized to go on board and inspect the vessel and every

part thereof.

This act provides for the State Governments to frame Rules regarding the survey and registration of

Inland Water Transport vessels. Any Indian National can own and operate the vessel anywhere in the

country if registered under the I.V. Act.

Inland Water Authority of India Act 1985 (IWAI) The Inland Waterways Authority of India Act, 1985 empowers the Government to declare waterways

with potential for development of shipping and navigation as National Waterways and develop such

waterways for efficient shipping and navigation. The development of the IWT sector, equally important

would be large-scale private sector participation both for creation of infrastructure and for fleet

operations.

Section 12 empowers the Inland Waterways Authority to enter into and perform any contract necessary

for the discharge of its functions under the Act.

Section 14 empowers the Authority to provide or permit setting up of infrastructure facilities for

National Waterways.

Section 17 provides for the Authority, with the previous approval of the Central Government to levy fees

and charges at such rates as may be laid down by regulations made in this behalf for services or benefits

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rendered in relation to the use of the National Waterways or Inland Waterways for the purposes of

shipping, navigation infrastructural facilities including facilities relating to the berthing of vessels. The

fees and charges levied shall be collected in such manner as may be determined by regulation.

("Regulations" means regulations made by the Authority under this Act).

Section 19 (1) (c) provides for crediting to the "Inland Waterways Authority of India Fund" all sums

received by the Authority from such other sources as may be decided upon by the Central Government

or State Government.

The Central Government, with a view to promote IWT, has launched several schemes. The schemes are

listed hereunder:

1. Vessel Building Subsidy of 30%

2. Equity participation by Govt. in BOT Projects up to 40%

3. Viability Gap Funding

4. Tax exemption similar to National Highways

5. Enhancement in depreciation rate for inland vessels

6. Joint Venture by IWAI

7. Customs Duty concessions

River Boards Act, 1956

This is a Central Act to provide for the establishment of River Boards for the regulation and development

of inter-State rivers and river valleys.

Section 13A empowers the river board to promote and regulate navigation. It also empowers the

Authority to prepare schemes, including multi-purpose schemes, for the purpose of regulating or

developing the inter-State river or river valley and advising the Governments interested to undertake

measures for executing the scheme prepared by the Board.

Recommendations for River Cruise Development

1. Study should be carried out to estimate the river cruise potential and study inter-alia will

suggest the types of IWT infrastructure required to be developed on specific stretches along

with mode of implementation (i.e. public funding or PPP) and incentives to be provided by the

Central Government/ State Government to the private sector.

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2. Department shall consider tourism component in land acquisition while acquiring the land for

setting up terminals. For land requirement at other specified locations for tourist activities, the

State Government shall formulate proposals and submit to Ministry of Tourism.

3. The State Government should develop river cruise related infrastructure on Inland Waterways

and embarking/disembarking facilities and other shore structure e.g. waiting halls with

tourists/passenger amenities, shops etc should be provided by the private sector for which

some fiscal incentives would be provided by State Government.

4. A Centrally Sponsored Scheme for providing financial assistance by the Central Government to

the State Government in developing river cruise specific inland water transport infrastructure

may be formulated.

5. Ownership and operation of cruise vessels will primarily vest with the private sector. Inland

Vessel Building Subsidy Scheme will be propagated to provide capital subsidy of 30% for

construction of vessels by domestic companies for river cruise purposes.

6. Safety will be given high priority, the design of every cruise vessels shall be approved by Indian

Register of Shipping (IRS). Cruise vessels shall also be equipped with life saving and fire fighting

appliances and the vessel shall also be fitted with adequate communication facilities.

7. State Government shall have facilities of salvage and rescue of vessel, men and material before

permitting the operation of cruise vessels. Every tourist traveling on these vessels should be

insured by the operator.

8. The Ports having Inland Waterways link would develop a jetty exclusively for berthing of river

cruise vessels so that tourists can visit the scenic places and variety of flora and fauna in the

vicinity connected with the port through inland waterways.

9. To avoid pollution of the waterways due to tourism activities, the tourism vessels will be

mandatorily asked to be equipped with pollution control requirement.

10. The terminals to be developed/ upgraded for tourism facilities will be allowed to avail the

financial assistance, wherein assistance up to 25% of the project cost subject to a ceiling of Rs.50

crores is provided by State Government or Department of Tourism (DoT). Necessary

infrastructure like Rail and Road Connectivity will be developed.

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6. Environmental & Social Impacts

This section discusses the environmental and social impacts of development of river cruise and suggests

measures to mitigate such damage/ impact.

Environmental Impact

River Cruises as the name suggests would operate on rivers. A river is a natural watercourse, usually

freshwater, flowing toward an ocean, a lake, a sea, or another river. A river is part of the hydrological

cycle. Water within a river is generally collected from precipitation through surface runoff, groundwater

recharge, springs, and the release of stored water in natural ice and snowpacks. Rivers are also the chief

source of drinking water and a mode of navigation.

The flora and fauna of rivers use the aquatic habitats available, from torrential waterfalls through to

lowland mires. There are many organisms which are restricted to the fresh water in rivers such as

salmon and hilsa thus forming a fresh water aquatic life. However, in rapidly migrating streams,

ecological successions develop in accordance with the prevailing patterns of erosion and deposition.

Development of river cruise would have an impact on the ecological balance in the aquatic life in the

rivers. A few of such impacts are listed below:

1. Operations of cruises would give way to generation of wastes on board and the tendency is to

dispose the waste in water

2. Leakage of fuel in the river body

3. Affects the aquatic life in the rivers

4. Cruises operating amidst the reserve forests and sanctuaries cause disruption of wildlife

The primary threat to environment in terms of river cruises would be in terms of its operations affecting

or disturbing the flora and fauna in the region due to human intervention.

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Social Impact

The operations of river cruises would have both positive and negative impacts on the social life in the

region in the following ways;

1. Inflow of tourists/ passengers in the region for availing of river cruises could disturb the social

life in the region

2. Introducing river cruise would provide opportunities for local employment in the region

3. River cruise would also popularize the destination and thereby lead to economic development

of the region

4. Development of infrastructure along the river course would facilitate navigation along the river

for the benefit of local population

Mitigation Measures

Though development of river cruises in the region would have adverse environmental and social

impacts, the same can be curbed by the following means;

1. Undertake Environment Impact Assessment study and act accordingly before actually

implementing the project

2. Carrying capacity for the region for development of river cruises needs to be undertaken to

ensure that there is no burden on the existing environment

3. The business plan prepared for the project shall take into account the socio-environmental

factors that affect the surroundings

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7. Project Financials

This section discusses the financial viability of the project taking into account certain general

assumptions pertaining to costs, revenues and other contingencies. Based on the project financials,

scenarios would be drawn to showcase the diverse structures for project development.

On a macro level, three sites have been identified for river cruises in the State which are backwaters of

Kabini reservoir, backwaters of Tungabhadra and backwaters of the Linganmakki dam. The financial

model / feasibility set out in this chapter can be replicated with some modifications in each of the

destinations. The overall investment requirement in cruise tourism for the State across rivers is also set

out in the section.

General Assumptions

Based on the discussions with cruise operators and research on the existing cruise liners the following

assumptions have been made on the type of cruise to be deployed for the said project;

1. Cruise liner preferably a yatch, with a passenger capacity ranging from 50-75

2. Itinerary of the river cruise would be for maximum duration of one day and one night (24 hours)

3. On-board facilities would include the following

a. Restaurant

b. Discotheque

c. Ayurveda/ Yoga/ Meditation Wing

d. Indoor Games Parlour

4. Cruise liner could have cabin space for 24 passengers and on-board facilities for 36 passengers.

The demand assumptions for the project are given below:

Table 7: Demand assumptions

Maximum Trips Assumed Considering Seasons of Travel (5 days in a week

possible in 4 months, 4 days in a week in 2 months, 3 days in a week in 4

months and no trips in two months)

160

Maximum Trips Possible (Apart from around 3 days of travel, it requires 2

days of cleaning, considering 1 trip in 7 days)

260

The number of trips proposed in the first year and the escalation over the subsequent years is set out in

the table below;

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Table 8: Trips assumptions

No of Trips in the First Year 35

Increase in the number of trips 5%

The occupancy over the years for the river cruise is set out in the table below;

Table 9: Occupancy over the years

Years 1 2 3 4 and after

Occupancy 67% 75% 80% 80%

The financing assumptions for the project are set out in the table below;

Table 10: Financing Assumptions

Particulars Values

Interest Rate (Term Loan) 17%

IDC per Quarter 4%

Working Capital Loan 17%

Debt-Equity Ratio 1.5

Debt 60%

Equity 40%

Loan Tenure 11 years

Moratorium period 1 year

Loan repayment tenure 10 years

DSRA period 0.5 year

Cost Estimation

The capital cost for the project would include the cruise liner which with a passenger capacity of 75

passengers would cost Rs. 12 Crores.

The costs incurred by the private developer would include the following;

Table 11: Cost estimates

No. Cost Heads Cost (in Rs. Crores)

1. Cruise ship cost 12

2. Cruise ship (second hand cost) -

3. Marketing costs 0.25

4. Other expenses 0.10

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No. Cost Heads Cost (in Rs. Crores)

Total 12.35

5. Contingency Costs (2%) .185

Total 12.53

Apart from the cost of the liner, for project development there is a requirement for construction of

jetties along the river banks, deployment of life saving boats along the river course, lounge areas close

to jetties for the benefit of the passengers. Houseboats can also be developed

The overall investment requirement for river cruise tourism in the State is given in the table below;

Table 12: Overall investment requirements for river cruise tourism in the State

Investment head Numbers Costs (in Rs. Crores)

Cruise liners 2 liners per site (3 sites) = 6 72

Jetties Atleast 2 per site = 6 3

Lounges Atleast 2 per site = 6 0.6

Life saving boats Atleast 2 per Cruise = 24 45

Houseboats along

coastline

4 (backwaters of Mangalore,

Udupi and Kundapura)

8

Total 128

Approximately, development of river cruises would require an amount of Rs. 130 Crores in Karnataka.

This investment requirement is excluding costs associated with land, dredging and other activities which

may be required on a case to case basis in different sites. However, this study would in detail discuss the

feasibility of one standard model of river cruise for any of the sites in the State.

The year on year O&M expenses for the project, is set out in the table below;

Table 13: O&M Expenses assumptions

Particulars Values

Passenger Handling Charges

Charges per passenger 15% of the ticket price

Fuel Charges 7% of revenues

Entertainment Charges per trip Rs.10,000/-

Crew Charges

No. of crew members 12

Total Expense per Crew Member Rs.1000

Maintenance and Insurance

% of Ship cost 1

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The O&M expense for the first year of operations is as follows:

Table 14: O&M Expenses

O&M Expense Head Values (Rs. Lakhs)

Passenger Handling Charges 8.7

Fuel Charges 4.0

Entertainment Charges 3.5

Crew Charges 4.2

Maintenance and Insurance 12.0

Total 32.4

Revenue Streams

The revenue streams for the project include the following:

1. Tariff collected from passengers for river cruise travel

2. License fee collected from the restaurants/ discotheques/ etc.

The revenues streams projected in the first year of operations are set out in the table below;

Table 15: Revenue Streams

Particulars Values

Number of Passengers 60

Occupancy 67%

Tariff for Cabins 5000

Cabin capacity 24

Tariff for being on-board 3500

On-board capacity 36

Total no of Trips 35

Escalation in Price 2%

Total tariff collection (in Rs. Lakhs) 57.7

Other Revenues (in Rs. Lakhs)

Restaurant licenses 5.0

Bar Licenses 5.0

Casino Licenses 2.0

Ayurveda Spa 5.0

Total Revenues 74.7

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Viability Assessment

Modern and reliable methods of capital budgeting like Net Present Value (NPV), Internal Rate of Return

(IRR) or discounted cash flow have been used to assess the viability of the project. Weighted Average

Cost of Capital (WACC) has been assumed to be the discounting rate for the purposes of calculation of

NPV.

The project seems viable for a project period of 20 years with a project IRR of 14.7% and an equity IRR of

14.2% where the project NPV is Rs.24 lakhs.

Scenario Analysis

The sensitivities have been calculated for the project the NPV and IRR calculation for the different

project period and the same is set out in the table below:

Table 16: Sensitivity analysis

Project period

Project Equity

NPV IRR NPV IRR

10 (211.1) 8.9% (222.7) 1.4%

15 (65.5) 13.1% (95.8) 11.1%

20 24.0 14.7% (6.3) 14.2%

25 74.9 15.5% 44.6 15.3%

30 103.9 15.8% 73.6 15.8%

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8. Operating Framework

This section would discuss in detail the possible risks in the project development, mitigation measures,

indicative project structure, qualification and selection criteria for the project to be developed on PPP

framework.

Risks and Mitigation

The possible risks and the mitigation measures for the project is set out in the table below;

Table 17: Risk Matrix

Sl. No. Risk Indicative Mitigants

1. Completion Risk Delays in procuring or construction

of ship Delays in supporting infrastructure Delays in approvals Design and engineering risk Construction technology Availability of eco-friendly materials Contractor’s delays

Fixed price - Fixed time EPC Contract Technical & Engineering Studies Equity stake from contractor Sponsor support

2. Operating Risk Maintenance Demand Management/ Quantity

Management Shortfall in Output/efficiency Safety Management Quality of Management

Known and proven technology to be

preferred Quality assurances through

warranties Annual Maintenance Contracts from

equipment suppliers Lenders’ Engineer Report Professional and experienced

management Sponsor strength and track record O&M Contracts Sensitivity analysis

3. Revenue Risk Demand forecasts Historical data User charges/ willingness-to-pay

Market studies Cost-benefit analysis Contractual protection Sensitivity analysis

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Sl. No. Risk Indicative Mitigants

5. Force Majeure Risk Non-political events Acts of God Strikes or boycotts affecting

supplies and services Indirect Political events Strikes: Industry wide,

state/country wide public agitation

Contractual provisions Delays being condoned Termination payments Insurance

6. Environmental & Social Risk Initial Environmental Consent Access issues Public Consultation, Compensation Environmental & Social Compliance Environment Management Plan

Public Consultation, Compensation Environment Management Plan Contractual mitigation EIA Studies Hydrographic studies

7. Political Risk Granting of approvals Change in law HR issues, past history

Contractual provisions Political Risk Insurance, if applicable

Indicative Project Structure

The various options under which the development of cruise tourism can be undertaken under a PPP

framework are listed below:

Each model varies depending upon the extent of sharing of risk and returns along with ownership rights

as defined in the ‘concession agreement’ entered into between the Government and the private

developer.

Generally in most of these structures, financing and construction is the sole responsibility of the private

developer. Equally all these structures pre-supposes the charging of ‘user fee’ by the developer as return

for his investment.

1. Build Own Operate (BOO): In the ‘BOO’ concession structure, privatisation is total with the onus

for investment & operation along with asset rights being handed over to the private operator.

Government would have no financial or commercial obligations. Essentially the transfer back of

the land to the government does not take place, and the project company continues to operate

the facility as though owned by it. The underlying land is either sold or leased to the project

company (with a continuous roll-over option for extension of lease).

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2. Build Own Operate and Transfer (BOOT): The ‘BOOT’ structure varies from ‘BOO’ only to the

extent that the concession would be for a specified period at the end of which the land and the

assets thereon would ‘transferred’ back to the Government at the end of the concession period

as per the terms of the concession contract. As such Government’s interest in the land would be

protected. The onus for investment & operation would be with the private operator with

Government having no financial or commercial obligations. However, ownership rights during

the concession would rest with the operator and he would be in a position to securitize these

for raising finances – with the attendant risk that in case of default the financiers would have

the right take over the facility including the land.

3. Build and Transfer: In the ‘BT’ structure the construction of the facility would be financed and

carried out by the private sector after which the entire facility would be handed over to the

Government. Hence, it would be very limited privatization, and the entire ownership with

responsibility for operations, management and marketing would rest with the Government. This

would imply that the consequent commercial and marketing risk would lie with the

Government.

4. Build Operate and Transfer (BOT): The ‘BOT’ is the typical and most widely used concession

contract and offers the flexibility to be structured either on the basis of a lease or a license. The

facility is financed, designed and built by the private operator in return for which he is given the

‘concession’ to operate the project, either on the basis of a lease of land or a license to operate,

for a specified number of years. The private developer operates the project for a specified

period bearing all the commercial and marketing risks and at the end of concession he is

required to hand over the facility to the government as per the terms of the contract.

Ownership remains with the Government during and after the concession period.

5. Build Lease and Transfer (BLT): In the ‘BLT’ structure the construction of the facility would be

financed and carried out by the private sector after which the entire facility would be given on

lease to the Government for the purpose of operations. This structure is used in sectors where

the operations of a certain service have not been fully privatized, such as in the Railways.

6. Joint Venture (JV): In a ‘JV’ structure, the project would be implemented by a Joint Venture

Company, (JVC), in which both the private developer and the Government would have

shareholding. The Government would invest in the project and, as shareholder, would be part

owner and consequently bear all the related commercial and marketing risk arising out of the

project. The financial returns to the Government would accrue in the form of ‘dividends’ and

exit option would be available only through the divesting of Government shareholding in the

JVC.

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While creating a robust PSP framework, Government should ensure that the privatization structure is

bankable (i.e. acceptable to financiers and bankers) wherein the concerns and risks of all the parties –

The Government, the private sector & the lenders – are suitably addressed. The private partner should

be able to deliver the expected requirements of the concession agreement. One alternative is that the

Government adequately addresses the concerns of the prospective bidders through an acceptable bid

Structure which addresses the following aspects:

Table 18: Project Structures

Concession structure Revenue sharing model

Bidder paying the highest

concession payment is

the preferred Bidder

Government to specify sharing of revenue based on a certain minimum

number of passenger/ ship movements. In this scenario the bidder will

define a base amount payable to the Authority for a specified number of

tourist movements through the terminal. If there is an increase in the

number of tourist movements, the Authority receives a higher share of the

revenue and if there is a lower movement the port receives a specified

‘floor’ payment or alternatively shares in the loss.

Indicative Qualification and Selection Criteria

The possible private players who could be interested in the development of cruise tourism in Karnataka

are:

Cruise Lines/Cruise Operators: The most potential private sector player who would be interested

in developing and operating cruise terminals would be the cruise lines themselves. Some of

these players are Star Cruises, Royal Carribbean International (RCI), Princess Group and Louis

Group.

Port Operators: Operators of private sector ports in India could also be keen to explore the

synergy of having a cruise terminal.

Hoteliers/hospitality players: Big groups engaged in hotels/ hospitality business, like the Taj

Group, the Oberoi Group, Leela Palaces and Resorts etc. would explore the synergies of building

cruise terminals in Karnataka in which there presence is the strongest.

Large entrepreneurs in Tourism/other businesses: Large entrepreneurs also interested in the

tourism business would also like to consider investment in a cruise terminal especially close to

their tourism projects.

Private Airlines: There are a large number of private airlines in India operating in many regions.

Each of these may be interested in exploring the potential of cruise tourism and using their

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position in the cruise ports as terminal operators to create backward integration & captive

passenger base for their suitably positioned airlines operations.

Other private stakeholders: Smaller stakeholders like tour operators, travels agents, shipping

services agent etc would also be interested in participating in cruise terminal development,

however, they may not have the finance to take it up independently. Accordingly, their

participation must be explored in a consortium model where they tie up with the larger player in

the investment while gaining special privileges in the development.

The selection criteria in terms of the financial bid could be the highest percentage share of revenue to

the Government, highest annual payment or an upfront payment.

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9. Way Ahead

This section discusses the obligations of the government with respect to this project and the

development framework.

Government Obligations for Development

On finalization of the site, the government is required to undertake the technical feasibility studies in

the region to determine the possibility of the river cruise in the area, also to finalise the capacity and

tonnage of the cruise vessel that can be deployed in the region.

Government is also required to obtain the necessary approvals from the PWD IWT Department with

regard to operation of the river cruises in the inland waterways. Approvals are to be sought from the

Forest Department as some of the regions where the river cruises are proposed lie in the reserve/

protected forests.

Government would be solely responsible for development of infrastructure at the river banks for the

development of river cruise tourism, provide end mile connectivity to the base stations and ensure the

safety of the passengers who avail river cruise facility.

Project Development Framework

The project would be developed on a PPP framework such that it results in a win-win situation to both

the private developer as well as the Government. The obligations of both the parties during the project

development are set out in the figure below;

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As shown in the figure above, it is clear that there is a perfect demarcation in the activities to be

undertaken by both the private developer and the Government. Hence, the project can ideally be

developed under a PPP framework.

Private

Operator

(PO)

Cruise – Deployment and O&M

Jetty facilities – Development and O&M

Other basic infrastructure

On-board/ Off board services

Commercial Risk

Marketing and Promotion

Government

of

Karnataka

Private

Operator

(PO)

Government

of

Karnataka

Private

Operator

(PO)

GoK and

Private

Operator

Private

Operator

(PO)

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10. Conclusion

The pre-feasibility report was presented to a panel chaired by the Principal Secretary, Infrastructure

Development Department (IDD), Government of Karnataka on October 29, 2010 for discussion and

approval. The presentation was attended by the probable stakeholders to the project, representatives

from Department of Tourism, Government of Karnataka; Public Works Department and Department of

Youth Services and Sports.

The members opined the following after the presentation of the pre-feasibility report;

1. There is a demand for river cruising in the State. However, due to the absence of options except

of houseboats in Udupi and smaller ferry services in the coastline; the demand is not fulfilled.

2. Clearance from environment and forests would be a key factor for development of river cruises

in certain areas and the same would need to be factored while developing the project.

3. The scope of this assignment did not include assessing the viability of the river course to

implement the project. As the process of undertaking technical studies (hydrographic) to assess

the viability of the river cruise is an elaborate and expensive affair and hence, no government

agency is inclined towards commissioning such a study.

The Chairman opined that the development of river cruise in the State could be undertaken under a PPP

framework but on a Swiss Challenge mode. iDeCK was requested to prepare a write up on the probable

locations for river cruises in the State, so that the same could be uploaded on the website of IDD, along

with an invitation to the private operators to propose river cruising activities under Swiss Challenge. The

write up on the promising sites for operating river cruises is set out as Annexure 2 of this report.

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Annexure 1

1. Cauvery

Cauvery, also called Dakshina Ganga (the Ganges of the south), is one of

the sacred rivers of India. The river is considered to rise at Talacauvery in

the Brahmagiri hills in Kodagu. Cauvery is considered as one of the seven

sacred rivers (Sapta Sindhu) of India and is one of the most important

rivers in south India. The source occurs at a point where the Western

Ghats join the Bengunad range. The Kannike, another stream which rises

nearby joins Cauvery at the foot of the hill in a village named

Bhagamandala. A third river, the Sujyothi, is also said to join Cauvery here,

unseen. Cauvery forms the principal drainage of Kodagu, and is already a

major river when it leaves the Western Ghats near Kushalanagara.

After the river leaves the Kodagu hills and flows onto the

Deccan plateau, it forms two islands, Srirangapatna and

Shivanasamudra. At Sivasamudra island the river drops 320 ft

(98 m), forming the famous Shivanasamudra Falls known

separately as Gagana Chukki and Bhara Chukki. Asia's first

hydroelectric plant, built in 1902 was on this falls wherein it

supplied power to the city of Bangalore.

In its course through Karnataka, the channel is interrupted by

twelve dams (anicuts) for the purpose of irrigation. Near Srirangapatna, there is an aqueduct, the

Bangara Doddi Nala, which was constructed in the 17th century by the Wodeyar maharaja of Mysore,

Ranadhira Kantirava, in memory of his favorite consort. It is said to be the only aqueduct where the

water from a river, dammed upstream, is carried by the aqueduct over the very same river few miles

downstream. This aqueduct also served as a motorable bridge until 1964. In addition to providing many

ancient and modern canals with water from the river for irrigation purposes, Cauvery also serves as the

main drinking water source for many towns and villages. The cities of Bangalore, Mandya and Mysore

depend almost entirely on Cauvery for their drinking water supply. In fact, the river is called Jeevanadhi

which, in Kannada, means a river supporting life.

The map shown below shows the different tributaries of Cauvery. All the tributaries along the river

course of Cauvery significantly contribute towards the livelihood of local people. Kabini is one of the

many tributaries of river Cauvery; it originates in the Wayanad district of Kerala and flows eastward to

join the Cauvery at T Narasipur in Karnataka. The total length of the river is about 230 km most of which

is amidst reserve forests and wilderness. Cauvery is joined by several rivers, the most important ones

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being Kakkabe, Kadanur, Kummahole, Hemavathi, Lakshmanatirtha, Shimsha etc, until it flows into the

Bay of Bengal in Thanjavur district in Tamil Nadu.

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2. Krishna

River Krishna is one of the longest rivers in central-southern India

(about 1400 km in length). It is also referred to as Krishnaveni in its

original nomenclature. It rises at Mahabaleswar in Maharashtra in the

west and meets the Bay of Bengal at Hamasaladeevi in Andhra

Pradesh, on the east coast. In its course it flows through Karnataka.

The delta of River Krishna is one of the most fertile regions in the

country and was known to be the home to ancient Satavahana and

Ikshvaku dynasties. Sangli is the largest city on the river Krishna in

Maharashtra state while Vijayawada is the largest city on the River

Krishna.

Ecologically, this is one of the disastrous rivers in the world, for the

reason that it causes heavy soil erosion during the monsoon season.

The river flows fast and furious, often reaching depths of over 75 feet (23 m). Krishna causes a high

degree of erosion between June and August. During this time, Krishna takes fertile soil from

Maharashtra, Karnataka and western Andhra Pradesh towards the delta region.

Its most important tributary is the Tungabhadra River, which is formed by the River Tunga and River

Bhadra that originate in the Western Ghats. Other tributaries include the River Koyna, River Bhima (

River Kundali feeding into the Upper River Bhima Basin), River Malaprabha, River Ghataprabha, River

Yerla, Rvier Warna, River Dindi, River Musi and River Dudhganga.

The rivers Koyna, Vasna, Panchganga, Dudhganga, Ghataprabha, Malaprabha and Tungabhadra join

Krishna from the right bank; while the rivers like Yerla, Musi, Maneru and Bhima join the Krishna from

the left bank.

Krishna Basin extends over an area of 2,58,948 km²

which is nearly 8% of total geographical area of the

country. The basin lies in the states of Andhra Pradesh

(1,13,271 km²), Karnataka (76,252 km²) and

Maharashtra (69,425 km²). River Krishna rises in the

Western Ghats at an elevation of about 1,337 m just

north of Mahabaleshwar, about 64 km from the Arabian

Sea and flows for about 1,400 km and outfalls into the

Bay of Bengal.

The map of River Krishna set out below shows the river course of the river along from its origin to the

Bay of Bengal.

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3. Tunga Bhadra

River Tungabhadra is a sacred river in southern India

that flows through Karnataka to Andhra Pradesh, where

it serves as the chief tributary of the Krishna River. In

the epic Ramayana, the Tungabhadra was known by the

name of Pampa.

The River Tungabhadra is formed by the confluence of

two rivers, the River Tunga and the River Bhadra, which

flow down the eastern slope of the Western Ghats in

Karnataka. Along with Nethravathi (west flowing river,

joining the Arabian Sea near Mangalore), the Tunga and

the Bhadra rise at Gangamoola, in Varaha Parvatha in

the Western Ghats forming parts of the world famous

Kudremukh Iron Ores, at an elevation of 1198m. More

than a hundred tributaries, streams, creeks, rivulets and

the like contribute to each of these two rivers. The

journey of Tunga and the Bhadra is 147 km and 171 km

respectively, till they join at Kudali, at an elevation of

about 610 m near Holehonnur, about 15 km from

Shimoga. It is a confluence of both the Dwaitha and the

Adwaitha philosophies. From there, Thungabhadra

meanders through the plains to a distance of 531 km and mingles with the Krishna at Gondimalla, near

Alampur in Mahaboobnagar district of Andhra Pradesh. River Varada flowing through Shimoga, Uttara

Kannada and Haveri districts; River Hagari in Chitradurga and Bellary districts and River Handri in

Kurnool district of Andhra Pradesh are the main tributaries of the Tungabhadra.

There are many holy places all along the rivers; primarily temples of Saiva cult on the banks of the

Bhadra and all the cults on the banks of the Tunga. Sringeri, Sarada Petham established by the Adi

Shankarcaharya is the most famous one on the left bank of the Tunga, about 50 km downstream of its

origin. Manthralayam Sree Raghavendra Swamy Muth in Kurnool district and Alampur in

Mahaboobnagar district, known as Dakshina Kashi are the other important pilgrimage centres.

About 15km downstream from Shimoga at Gajanur across the River Tunga a dam is constructed. At

Lakkavalli about 15 km upstream of Bhadravati across the Bhadra a dam is constructed. Both are

multipurpose dams and irrigate lands in Shimoga, Chikkamagalur, Davanagere and Haveri. The

Tungabhadra dam is constructed across river Tungabhadra, a tributary of River Krishna. The dam is built

near the town of Hospete in Karnataka. It is considered as a multipurpose dam with storage capacity of

135 tmcft. Owing to siltation the capacity has been reduced by about 30 tmcft.

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4. Sharavathi

Sharavathi originates at Ambuthirtha in Thirthahalli taluk, flows

north-west through the Western Ghats forming the Jog Falls before

joining the Arabian Sea at Honnavara. River Sharavathi originates

and flows entirely within the Karnataka and is one of the few

westward flowing rivers of India. A major part of the river basin lies

in the Western Ghats. The famous Jog Falls, India’s highest

waterfalls are formed by this river. The Sharavathi River plunges

253 metres into a deep gorge at Jog in four different segments

called as Raja, Roarer, Rocket and Rani. The volume of water that

reaches Jog Falls is controlled upstream by the Linganamakki dam and the falls are at their mightiest

when water is released from the dam. The total length of the river is 128km and the major tributaries of

the river are Nandihole, Haridravathi, Mavinahole, Hilkunji, Yennehole, Hurlihole, and Nagodihole.

The river itself and the region around it are rich in biodiversity and are home to many rare species of

flora and fauna. With a major part of the river lying in the Western Ghats, the Sharavathi basin receives

a large amount of rainfall. Mean annual rainfall ranges from 6000 mm in the western side to 1700 mm in

the eastern side of the basin. About 95% of the rainfall is

received during the month of June to September (July being the

rainiest) when the southwest monsoon is at its peak. There is

some rainfall in the post monsoon season in the form of

thundershowers mostly during October and some rainfall also

occurs during the summer months of April and May.

The Linganamakki dam located in the Sagara taluk (length of

2.4 km) and was constructed across the Sharavathi river in the year 1964. It was designed to impound

4368 million cubic meter of water in an area of around 300 km², submerging 50.62 km² of wetland and

7 km² of dry land, the remaining being forest land and wasteland. The dam's height is 1819 feet above

sea level. The total capacity of the reservoir is 152 TMC (Thousand Million Cubicfeet). It has a catchment

area of nearly 1991.71 km². It receives water mainly from rainfall and also from the Chakra and

Savahaklu reservoirs, which are linked to Linganamakki through a canal. The water from Linganamakki

dam flows to Talakalale Balancing Reservoir through a trapezoidal canal with a discharge capacity of

175.56 cumecs. The length of this channel is about 4318.40 m with a submersion of 7.77 km². It has a

catchment area of about 46.60 km². The gross capacity of the reservoir is 129.60 cu meters.

Another dam which is built across River Sharavathi is the Gerusoppa dam in Uttar Kannada. It has a

height of 56 metres and a length of 545 metres. The dam was built in the year 2002 for the purpose of

generating electricity.

The Sharavathi river basin is rich in biodiversity. In a survey conducted in the basin, 23 amphibians

belonging to the families of Bufonidae, Ichthyophiidae, Microhylidae, Ranidae and Rhacophoridae were

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recorded. Out of these 23 amphibians, 15 species are endemic to the Western Ghats. The river lends its

name to the following species of fish that have been discovered in its waters:

Batasio sharavatiensis: A bagrid catfish discovered near Jog Falls, Uttara Kannada district. [6]

Schistura sharavathiensis: A fish species discovered in Sharavathi river near Algod, Shimoga

district

A part of the Sharavathi river basin was declared as a wildlife sanctuary on 20 April 1972. Spread over an

area of 431.23 km², it has dense evergreen and semi-evergreen forests. Linganamakki reservoir spread

over an area of 128.7 km² is a part of this sanctuary. The remaining area has been divided into core zone

(74.33 km²), buffer zone (170.67 km²) and tourism zone (57.53 km²). The altitude in the sanctuary varies

from 94m to 1102m, the highest point being Devarakonda on the southern edge of the sanctuary.

Temperature in the area ranges from 15°C to 38°C and the mean annual rainfall is 4500 mm.

There are many places of interest along the river course, a brief on a couple of them are given herein

below:

Ramachandrapura Math is a Hindu religious institution located on the banks of the river

Sharavathi in the town of Hosanagara in Shimoga district. One of the goals of this institution is

the protection of Indian breed cattle (Bos indicus). A World Cattle Conference was organised by

this institution in the year 2007 to promote propagation and improvement of Indian breeds of

cattle.

Honnemaradu is an island on the reservoir formed by the Linganamakki dam. It is located in the

Sagara taluk of Shimoga district. This place is good for watersports and hence it attracts

enthusiasts. Some of the water sports possible here are canoeing, kayaking and wind surfing.

Bird-watching enthusiasts also visit this place.

5. Kabini

Kabini is also called Kabani and Kapila, is a river of

southern India which originates in Wayanad, Kerala

from the confluence of the Panamaram River and

Mananthavady River, and flows eastward to join

the Cauvery at Tirumakudal Narasipur in Karnataka,

which empties into the Bay of Bengal.

Close to the town of H D Kote in Mysore, it forms

the huge Kabini Reservoir. The backwaters of the

Kabini reservoir are very rich in wildlife especially in

summer when the water level recedes to form rich

grassy meadows. The Kabini dam is 2,284 feet (696 m) in height with a gross storage of 19.52 tmcft but

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has reduced considerably due to silt accumulation. Kabini Dam is situated between villages

Beechanahalli and Bidarahalli having distance of 14 km from H.D.Kote.

Kabini is one of the most popular wildlife destinations of Karnataka, probably because of its easy

accessibility, lush green landscape surrounding a large picturesque lake, and fantastic sightings of large

herds of elephants. It is 80 km away from Mysore and 205 km from Bangalore, and comprises the south-

eastern part of Nagarole National Park. Situated on the banks of River Kabini, this forest reserve is

spread over 55 acres of forestland, steep valleys, and water bodies. The region was once the private

hunting lodge of the Maharaja of Mysore and a popular poaching hotspot for British Viceroys and Indian

royalty. Now it is considered to be one of the best wildlife sanctuaries in Karnataka, famous for its exotic

and endemic wildlife.

This wildlife sanctuary, situated on the banks of River Kabini, features a large quaint lake surrounded by

verdant landscape. This forest reserve is spread over 55 acres of forestland and water bodies. Tourist

can spot herd of elephants roaming in the area. Kabini is an ideal place for tourists to pitch their camps

and plan out a trek to Kumara Parvatha or Tadiyadamol nearby. Kabini back waters are an ideal camping

site for nature loving tourists.

The river course of Kabini is exciting and beautiful. Kabini originates from Pakramthalam hills at

Kuttyadi-Mananthavady road. River Makkiyad and River Periya join it near Korome and Valad

respectively. After flowing through Mananthavady town, River Panamaram joins Kabini near

Payyampally. One branch of Panamaram starts from Banasura Sagar reservoir near Padinjarethara and

its other branch starts from the Lakkidi hills. After traversing 2 km from the confluence of River

Panamaram, Kabini forms an island called Kuruva Island, spreading over 520 acres (2.1 km2) with diverse

flora and fauna. Within 20 km, it reaches the Kabini reservoir bordering Kerala and Karnataka. Between

Kabini reservoir and Kuruva island, River Kalindi joins Kabini. River Kalindi originates from Brahmagiri

hills which on reaching near Tirunelly temple the rivulet Papanasini joins it. Taraka and Nugu are the two

small rivers in H.D.Kote taluk that join Kabini.

6. Sita

River Sita rises in the western ghats at a place called the Kudlu teertha and flows through the thick

greens of the western ghats forming rapids in its course. The river finally empties into the Arabian Sea.

River Sita is known for its rapid flow which paves way for the adventure sports activities such as rafting

and kayaking in the river.

Other Rivers

Ghataprabha River- rises in the Western Ghats and flows eastwards for a length of 283 km

before joining river Krishna. The river debouches by 53 metres at Gokak falls in Belgaum district.

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Malaprabha River- also rises in Western Ghats at an altitude of 792 metres in Belgaum district.

The river flows first in easterly and then in north-easterly directions and joins the Krishna at

Kudalasangama, about 304 km from its source.

Bhima River- originates in the forest of Bhimashankar in Pune, and flows through the States of

Maharashtra and Karnataka. It flows for 861 km before joining the Krishna near Kudlu in Raichur

taluk.

Hemavathi River- rises in the Western Ghats at an elevation of about 1,219 metres and joins the

river Cauvery near Krishna Raja Sagar dam.

The map of Karnataka with all its major rivers and four water bodies are set out below:

ALMATTI RESERVOIR

LINGANAMAKKI DAM

TUNGA BHADRA DAM

KRISHNA RAJA SAGAR DAM

ALMATTI RESERVOIR

LINGANAMAKKI DAM

TUNGA BHADRA DAM

KRISHNA RAJA SAGAR DAM

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The backwaters of the major dams such as Linganamakki across river Sharavathi, Krishna Raja Sagar

across river Cauvery, Tunga Bhadra across river Tunga Bhadra river and Almatti across river Krishna

would be targeted for river cruise tourism.

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Annexure 2

PROMISING DESTINATIONS TO DEVELOP RIVER CRIUSES IN KARNATAKA

Backwaters of River Sharavathi at Honnemaradu

The backwaters of River Sharavathi is located at

Honnemaradu. River Sharavathi is famous for the water fall

at Jog, which is the highest waterfall in the Indian sub-

continent. It is a promising destination for river cruising for

the following reasons;

The annual tourist flow to Jog falls is 4.5 lakhs of

which 99% are day tourists. The river cruise

proposed in the region would enhance the duration

of tourist stays in the region. The idea is to propose

cruise for a duration of one day and one night

duration in the backwaters of the Sharavathi at Honnemaradu.

Honnemaradu is surrounded by reserve forests that are a habitat to the some of the

endangered and endemic species of the western ghats. The major attraction of the cruise would

be witnessing the flora and fauna of the region.

The facilities on board the vessel could include cabins, canopy area, Ayurved spa, restaurant

serving the local Malnad cuisine.

Kabini Reservoir

River Kabini the tributary of the river Cauvery which flows

through the reserve forests of the wildlife sanctuary in the south

eastern parts of the Nagarhole Wilddlife Sanctuary would be a

very promising site for river cruising to experience the exotic

wildlife of the region. The Jungle Lodges and Resorts, a GoK

owned enterprise is located on the banks of river Kabini and

could also provide the required thrust for development of the

river cruise. Other factors that would make river cruises in the

said destination attractive are as follows;

Annual tourist visits to Kabini River Lodge of Jungle

Lodges and Resorts is about 1500. The resort enjoys nearly 100% occupancy. This also promises

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adequate demand for any river cruise in the area wherein the river cruise could cater to the

excess demand for the wildlife tourism in the region.

The major attraction of the cruise would include watching the flora and fauna in the region

belonging to the wildlife sanctuary.

The cruise would have facilities like the Ayurved spa and massage centre, restaurant serving

local cuisine and a canopy overlooking the banks.

House Boats in Backwater in Udupi/ Mangalore

Department of Tourism through its Jungle Lodges and

Resorts has already identified prospects for houseboats

in the backwaters of the Kemmana-Hoode located in

Udupi district. Karnataka has a coastline of about 320 km

and has many estuaries, backwaters and lagoons that are

formed along the same. Many small rivers like River

Gangoli and River Sita that join the sea have their

backwaters in the districts of Udupi. The locations

around Gangolli and Kodi in Kundapura taluk are

promising destinations to undertake river cruises. The following components make river cruising

promising in the region;

Annual tourist visits to the districts of Udupi and Dakshina Kannada is about 8-9 lakhs.

Houseboats popular in the neighbouring State of Kerala would also draw tourists in Karnataka.

Also, the houseboats already under operation in the backwaters of Udupi are operating with

100% occupancy.

Each Houseboat, could house about 4 cabins for over-night stays and it could take the tourists

through the rich paddy fields and coconut plantations along the river. The houseboats could

also visit the various inhabited islands formed by these rivers thus offering the tourist a

snapshot of the village lifestyle.

Local cuisine may be served on these houseboats thus promoting the local culture.