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(Private & Confidential) Detailed Project Report for the Development of Thankassery (Kollam) Port Final Report Submitted to The Directorate of Ports, Government of Kerala Submitted by Deloitte Touche Tohmatsu India Pvt. Ltd. October 2010
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Page 1: (Kollam) Port

(Private & Confidential)

Detailed Project Report for the Development of Thankassery (Kollam) Port

Final Report

Submitted to

The Directorate of Ports, Government of Kerala

Submitted by

Deloitte Touche Tohmatsu India Pvt. Ltd.

October 2010

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List of Abbreviations

ACC The Associated Cement Companies Limited

APEDA The Agricultural and Processed Food Products Export Development Authority

APPROX Approximately

AVT A V Thomas

BPCL Bharat Petroleum Corporation Limited

C Celsius

CAGR Compounded Annual Growth Rate

CCHAA Cochin Custom House Agents Association

CCoCI The Cochin Chamber of Commerce & Industry

CED Centre for Environment and Development

CEPC Cashew Export Promotion Council

CEPZ Cochin Export Processing Zone

CFS Container Freight Station

CHA Custom House Agents

CIAL Cochin International Airport Ltd

CII Confederation of Indian Industry

CNSL Cashew nut shell liquid

CRZ Coastal Regulation Zone

DoP Directorate of Ports

DPR Detailed Project Report

DSCR Debt Service Coverage Ratio

DTTIPL Deloitte Touche Tohmatsu India Pvt. Ltd.

DWT Deadweight tonnage

EDI Electronic Data Interchange

EIA Environmental Impact Assessment

EICL English Indian Clays Ltd

EMP Environment Management Plan

EXIM Export / Import

FACT The Fertilisers and Chemicals Travancore Limited

FEU Forty-foot equivalent unit

FT Feet

GDP Gross Domestic Product

GoK Government of Kerala

GPS Global Positioning System

GRT Gross Registered Tonnage

H0 Null Hypothesis

HDI Human Development Index

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HUF Hindu Undivided Family

ICD Inland Container Depot

ICT International Container Terminal

INR Indian Rupees

IPA Indian Ports Association

ISPS International Ship and Port Facility Security Code

KG Kilogram

KM Kilometer

KMML Kerala Minerals & Metals Ltd

KSIDC Kerala State Industrial Development Corporation

KV Kilovolt

KWA Kerala Water Authority

LCL Less than container load

LPCD Litres per capita per day

LTD Limited

M Meters

MAX Maximum

MLHW Mean Low High Water

MLLW Mean Low Low water

MHHW Mean High High Water

MHLW Mean High Low Water

MSL Mean Sea Level

MM Millimeters

MMTG Act Multimodal Transportation of Goods Act

MoP Muriate of Potash

MPEDA The Marine Products Export Development Authority

MSL Mean Sea Level

MT Metric Tons

MV Mother Vessel

MW Megawatt

NA Not Applicable

NCR National Capital Region

NH National Highway

NOS. Numbers

NOx Oxides of Nitrogen

NPV Net Present Value

NW National Waterway

NW-SE North West – South East

O-D Origin-Destination

OECD Organization for Economic Co-operation and Development

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P Probability

P.A. Per Annum

PABX Private Automatic Branch Exchange

PESTLE Political, Economic, Social, Technological, Legal, Ecological

PPP Public Private Partnership

QTY Quantity

R.M Raw Materials

RFID Radio frequency identification

RfP Request for Proposal

SEZ Special Economic Zone

SO2 Sulphur dioxide

SPC Special Purpose Company

SPM Suspended Particulate Matter

SQ. MTS Square meters

SWOT Strengths, Weaknesses, Opportunities, Threats

T&C Textile and Clothing

TEU Twenty-foot equivalent unit

THC Terminal Handling Charges

TTPL Travancore Titanium Products Ltd

UOM Unit of Measurement

US$ US Dollar

VKUY Vishesh Krishi Upaj Yojana

WLL Wireless local loop

WMS Warehouse Management System

Y-O-Y Year on year

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Contents Executive Summary ................................................................................................................. 9

1. Introduction ......................................................................................................................14

1.1 Project background & rationale .......................................................................................14

1.2 Structure of the Report ...................................................................................................15

2. Overview of business landscape ....................................................................................17

2.1 PESTLE analysis ...........................................................................................................17

2.2 SWOT Analysis ............................................................................................................20

3. Traffic assessment ..........................................................................................................22

3.1 Approach to the traffic study ...........................................................................................22

3.2 Hinterland mapping .......................................................................................................22

3.3 Primary hinterland analysis .............................................................................................25

3.4 Indicative traffic of the primary hinterland and potential open cargo ....................................26

3.5 Total potential open cargo for Thankassery port from primary hinterland .............................32

3.6 Secondary hinterland analysis .........................................................................................33

3.7 Open cargo from primary and secondary hinterland ...........................................................37

3.8 Indicative traffic projections. ..........................................................................................38

4. Site investigations ...........................................................................................................50

4.1 Geographical setting ......................................................................................................50

4.2 Land ............................................................................................................................51

4.3 Connectivity .................................................................................................................51

4.4 Topography ..................................................................................................................53

4.5 Bathymetry ...................................................................................................................54

4.6 Geo technical conditions ................................................................................................54

4.7 Tide and wave data ........................................................................................................54

4.8 Environmental data ........................................................................................................55

4.9 Utilities ........................................................................................................................59

5. Port planning ....................................................................................................................61

5.1 Introduction ..................................................................................................................61

5.2 History of the port operations ..........................................................................................61

5.3 Existing Port Facilities ...................................................................................................62

5.4 Planning methodology ...................................................................................................62

5.5 Strategy for project planning ...........................................................................................63

5.6 Port layout ....................................................................................................................63

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5.7 Port facility requirements ...............................................................................................65

5.8 Planning criteria ............................................................................................................66

5.9 Planning consideration ...................................................................................................67

5.10 Navigational aids ...........................................................................................................67

5.11 Cargo handling equipment ..............................................................................................67

5.12 Land requirements .........................................................................................................67

5.13 Constrains in port operations ..........................................................................................67

6. Cost estimates .................................................................................................................70

6.1 Capital cost estimation ...................................................................................................70

7. Determination of tariffs ....................................................................................................75

7.1 Overview of port tariffs ..................................................................................................75

7.2 Tariff determination .......................................................................................................76

8. Financial analysis ............................................................................................................78

8.1 Introduction ..................................................................................................................78

8.2 Identification of revenue streams .....................................................................................78

8.3 Assumptions of investment and expenditure .....................................................................79

8.4 Financial projections ......................................................................................................83

9. Way forward .....................................................................................................................85

Annexure 1 : Stakeholders contacted for the traffic survey ........................................................87

Annexure 2 : Statistical analysis of data for expected traffic at Thankassery port ......................92

Annexure 3 : Growth rate taken for the various commodities .................................................. 101

Annexure 4 : Traffic projections for various commodities ........................................................ 104

Annexure 5 : Route of roads, canal and railway line near Port area ........................................ 120

Annexure 6 : Topography and contour map – port area .......................................................... 121

Annexure 7 : Bathymetric chart ............................................................................................... 122

Annexure 8 : Borehole tests results ......................................................................................... 123

Annexure 9 : Rapid Environmental Impact Assessment .......................................................... 124

Annexure 10 : Port development layout .................................................................................. 125

Annexure 11 : Financial projections ........................................................................................ 126

Annexure 12 : Queries received from DoP on the draft final report submitted ......................... 127

Annexure 13 : Clarifications submitted in the draft final report ................................................. 128

Caveats................................................................................................................................... 157

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List of Tables Table 1: Regions in the primary and secondary hinterland ................................................................23

Table 2: Cargo profile of the primary and secondary hinterland ........................................................24

Table 3: Indicative road distances between the identified primary cargo belts and gateway ports ........25

Table 4: Potential open cargo from Kollam district ..........................................................................27

Table 5 : Potential open cargo from Thiruvanthapuram District ........................................................28

Table 6 : Potential open cargo from Idukki District ..........................................................................28

Table 7 : Potential open rubber based cargo from Kottayam district ..................................................29

Table 8: Indicative road distances between the identified secondary cargo belts and gateway ports .....33

Table 9: Export commodities from Tamil Nadu hinterland ................................................................34

Table 10: Potential open cargo from Tamil Nadu hinterland .............................................................36

Table 11: Total open cargo from primary and secondary hinterland ..................................................38

Table 12: Consolidated traffic growth in tonnes ( Low growth scenario) .............................................40

Table 13: Containerised traffic growth in TEUs (Low growth scenario) ...............................................41

Table 14: Consolidated traffic growth in tonnes (medium growth scenario) .......................................42

Table 15: Containerised traffic growth in TEUs (medium growth scenario) .........................................43

Table 16: Consolidated traffic growth in tonnes (high growth scenario) .............................................44

Table 17: Containerised traffic growth in TEUs (high growth scenario) ...............................................45

Table 18: Comparative cost of exporting One TEU from Kollam to Cochin port by Road vis-a-vis though the proposed Thankassery (Kollam) cargo terminal .........................................................................47

Table 19: Comparative cost of exporting One TEU from Trivandrum to Cochin port by Road vis-a-vis though the proposed Thankassery (Kollam) cargo terminal ..............................................................48

Table 20: Comparative cost of exporting One TEU from Trivandrum to Cochin port by Road vis-a-vis though the proposed Thankassery (Kollam) ....................................................................................49

Table 21: Project activities and its impacts .....................................................................................59

Table 22: Sub-station network in Kollam district ..............................................................................60

Table 23: Project cost incurred under Fisheries Department .............................................................70

Table 24: Project cost incurred under ASIDE scheme of Ministry of Commerce & Industry ...................71

Table 25: Project cost incurred under State Government (Port sector) ...............................................71

Table 26: Project cost incurred Tsunami rehabilitation programme under port sector .........................72

Table 27: Summary of the project cost incurred by the State Government of Kerala............................72

Table 28: Additional project cost envisaged for development of Thankassery port ..............................74

Table 29: Vessel related charges....................................................................................................75

Table 30: Cargo related charges ....................................................................................................75

Table 31: Cargo related component charges ...................................................................................76

Table 32: Tariff for container vessels ..............................................................................................76

Table 33: Tariff for bulk coastal vessels ..........................................................................................77

Table 34: Projected traffic for financial modeling ............................................................................78

Table 35: Summary of phase wise investment details ......................................................................79

Table 36: Debt / financing options .................................................................................................80

Table 37: Operation and maintenance percentage ..........................................................................81

Table 38: Waterfront royalty to GoK ..............................................................................................81

Table 39: Port related assumptions ...............................................................................................82

Table 40: Depreciation rates for various assets ...............................................................................82

Table 41: Tax rates .......................................................................................................................83

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Table 42: Projected Gross Revenues ..............................................................................................83

Table 43: EBITDA .........................................................................................................................83

Table 44: Financial feasibility indicators .........................................................................................84

Table 45: Minimum draft recorded across the various stretches of the NW-3 ................................... 137

Table 46: Rail connectivity cost details ......................................................................................... 142

Table 47: Approach road cost estimates ....................................................................................... 143

Table 48: Revised traffic projections in tonnes .............................................................................. 144

Table 49: Traffic projections in tonnes as indicated in the draft DFR ................................................ 144

Table 50: Additional cost to be incurred for berthing of 20,000 DWT vessels. ................................... 145

List of Figures Figure 1 : SWOT analysis of Thankassery port ............................................................................................ 21 Figure 2 : Indicative primary hinterland for Thankassery Port ................................................................... 23 Figure 3 : Indicative secondary hinterland for Thankassery Port .............................................................. 23 Figure 4 : Overview of the Kollam Port area ............................................................................................... 50 Figure 5 : Kollam district road network ...................................................................................................... 51 Figure 6 : Kollam district road network ...................................................................................................... 52 Figure 7 : The existing water canal and rail line near Thankassery port ..................................................... 53 Figure 8 : Loading / Unloading operations for MV Anakuri ........................................................................ 61 Figure 9 : Indicative port planning layout ................................................................................................... 65 Figure 10 : Import trends of country’s raw cashew nuts .......................................................................... 104 Figure 11 : Import trends of raw cashew nuts through Cochin Port ........................................................ 104 Figure 12 : Export trends of country’s cashew kernels ............................................................................. 105 Figure 13 : Export trends of raw cashew nuts through Cochin Port ......................................................... 105 Figure 14 : Export trends of country’s marine food .................................................................................. 106 Figure 15 : Export trends of marine food through Cochin Port ................................................................ 106 Figure 16 : Production trends of pepper in Idukki district ........................................................................ 109 Figure 17 : Exports trends of natural rubber ( Kerala vis-à-vis India) ....................................................... 111 Figure 18 : Exports trends of Cashew Nut Shell Liquid ( Kerala vis-à-vis India) ........................................ 113 Figure 19 : Import trends of timber in the districts of Kanyakumari, Thiruneveli, Virudhunagar, Tuticorin and Madurai .............................................................................................................................................. 117 Figure 20 : West coast canal map ............................................................................................................. 135 Figure 21 : Cargo movement trends on the West Coast Canal ................................................................. 136 Figure 22 : Overview map of Kollam to Kayamkulam area ....................................................................... 137 Figure 23 : Proposed rail alignment from existing rail head to Thankassery port .................................... 140

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Executive Summary The Directorate of Ports, Government of Kerala entrusted to the consultants the task of preparation of

the detailed project report (DPR) for development of Thankassery port as per the scope of work

mentioned in section 1.1.

The Consultant subsequently undertook

detailed traffic study ,

review of the technical studies earlier undertaken

environmental studies,

detailed topography and route profiling,

Port planning and phasing of the project based on the traffic flow and site conditions

Financial feasibility

Based on the above activities, a suitable business model has been proposed for the Thankassery port

development as spelt out in the subsequent sections of this document.

Traffic projections

The state government has constructed a wharf in Thankassery in November 2006. However the existing

facility has not witnessed significant traffic apart from coastal movement of sand and the occasional

movement of construction material to Male.

To firm up the type of infrastructure that would be required, its phasing, capacity and supporting

facilities, to be established at Thankassery port, an understanding of the cargo movement from the

identified hinterland was essential. Hence a comprehensive primary survey covering the hinterland of

both the states of Kerala and Tamil Nadu was undertaken covering cumulatively a respondent sample

size of more than 150 numbers. The respondents included all the relevant stakeholders in the exports,

shipping and logistics sector covering customs house agents, commodity boards, trade associations,

regional export promotion trade bodies, commodity export promotion body, major industries, customs

officials, district industries centre, inland container depots, and container freight stations.

The likely open cargo that would flow through the port of Thankassery has been considered based on

the following:

• Assessment of the EXIM commodities in the identified hinterland Topography and connectivity

issues that may impede / hasten the cargo flow through Thankassery port.

• Distance of the cargo belts to Thankassery port vis-à-vis the other existing and upcoming ports in

the region.

• Acceptability of the relevant stakeholders ( shippers) on diverting their cargo to Thankassery port.

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• The indicative cost savings.

• Identification of such open cargo in terms of commodities and their indicative quantum.

• Forecasting of cargo growth and traffic based on the commodity profiles and growth potential for

EXIM trade / coastal shipping that reflects the above ground realities.

A detailed commodity profiling was undertaken and was categorized into containers and bulk / break-

bulk cargo. The above commodity categorization included both overseas and coastal movement.

Subsequently, three different alternatives were developed for traffic forecasting with each one of them

having low, medium and high case scenarios. The summary of cargo projected is furnished in the below:

Total traffic (both bulk and containerized) in '000 Tonnes

2015 2020 2025 2030 2035 2040

Low 2,024 2,215 2,445 2,695 2,966 3,275

Medium 2,207 2,718 3,388 4,255 5,343 6,806

High 2,306 3,073 4,140 5,596 7,505 10,281

Only containerized traffic in TEUs

2015 2020 2025 2030 2035 2040

Low 37,122 40,429 44,992 50,298 56,548 63,773

Medium 43,568 51,863 62,907 77,173 95,364 118,300

High 44,332 55,879 70,574 89,208 115,293 149,651

Based on the detailed analysis of the macro and micro economic scenarios, the medium growth scenario

has been decided as the base case for cargo. The entire port planning and the subsequent financial

modelling has been undertaken considering the medium growth scenario of traffic.

Port Planning

In a typical PPP port related project, the private developer is required to invest a substantial amount of

time and resources in establishing the infrastructure for commencing port operations, while the

government provides the waterfront and other hand holding related support. In this aspect, the port of

Thankassery is very much unique, since the State Government has already established facilities at the

port.

This would provide the private developer a ready-made infrastructure set-up which would facilitate him

to commence commercial operations from Day 1. Accordingly the envisaged port planning focuses on

the optimum utilization of the existing facilities to its full capacity. It is only when the capacity of the

existing facilities is fully utilized that the private developer would be required to plan and install

additional infrastructure for catering to the cargo traffic.

Accordingly the port planning exercise had been divided into the following phases -

Phase 1 – The planning objective of the referred phase would be to utilize the existing facilities to its

full capacity. In this regards, the private developer would be required to augment the existing

infrastructure by:

Providing mechanical material handling equipment / cranes etc

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Strengthening existing facilities

Facilitating connectivity ( with active support of the state government)

Improving the storage requirements

Managing the port operations

The installed capacity of wharf with the above strengthening would be around 3.60 million tonnes

per annum and actual capacity utilized would be 2.70 million tonnes per annum with operating

efficiency of 75%. Considering above, the phase II would be required to be commissioned by year

2020 when the above capacity is utilized and traffic exceeds the above threshold.

Phase 2 – A separate wharf 200.0 m long X 20.0 m wide is proposed in the port area towards

North/East direction which will be mainly for handling container cargo with higher capacity cranes

than considered in Phase I with increase in cargo handling rate by about 25 to 30%.

The area earmarked for future extension of about 20 hectares is proposed to be developed by

reclamation upto deck level of wharf the shore protection using rubble bund using of required sizes

of stones as per the design. The area so developed will be utilized for container / bulk/ break bulk/

other cargo stored separately with provision for both open / covered storage as per the need.

After commission of new wharf mainly for containerized cargo, the existing wharf will be used for

handling bulk and other cargo of comparatively less weight. After addition of second wharf, the

installed capacity would get increased to about 7.60 million tonnes per annum and actual capacity

utilization would be about 6.0 million tonnes per annum with operational efficiency of 75%.

The Thankassery port is planned considering dredging in future upto -10.0 m level thereby allowing the

vessels upto 9 m draft at all tides. Considering this the vessels of size upto 15,000 dwt can be

maneuvered inside the harbour and berth at the existing wharf structure. At present the depths

available at wharfs and inside the harbour are about -6.5 m to -7.0 m, which will allow vessels having

draft upto 5.5 to 6 m to operate in the harbour. This will allow vessels of size 6,000 to 7,000 dwt to berth

at all tides.

Financial Feasibility

The State Government of Kerala had the foresight to tap the potential of Thankassery for the

development of a port and had accordingly invested in a phased manner to develop the region into a

coastal / feeder gateway terminal. The immediate focus is hence to utilize the existing infrastructure

created by State Government and accordingly complement the facilities so created resulting in

commercial operations of the port. To that extent the private developer would be required to invest

around Rs. 400 million especially in machineries and equipment to commence operations for Phase 1.

Once the threshold capacity of the existing facilities is reached in Phase 1, the private Developer would

be required to invest Rs. 1,250 million for creating new infrastructure in Phase 2 to cater to the

envisaged cargo . Based on the assumption and estimates, the profit and loss statement and cash flow

statement for the project was prepared. The projected gross revenues and profitability so worked out

has been indicated below –

Projected revenues -

Rs. Million

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Year Revenues

2015 176.43

2020 423.20

2025 596.75

2030 1077.54

2035 1945.62

2040 2411.78

Profitability -

In Rs. Million Year EBIDTA

2015 91.53

2020 253.17

2025 365.20

2030 689.53

2035 1525.75

2040 2273.77

Overall financial analysis for the proposed investments and the project was undertaken for a period of

30 years. DSCR calculations have been carried out for each phases from availing the debt till its

repayment.

While a positive NPV shows that the project as feasible, the purpose of the IRR calculations is to assess

whether the returns are adequately above the hurdle rate the stakeholders would have in mind in terms

of an adequate return on investment and the purpose of DSCR is to evaluate the overall debt payment

capability.

Following is the summary of these financial indicators:

Description Amount

Internal Rate of Return (IRR) in % 12.51

Net Present Value (NPV) in Rs. Million 205.09

Payback period in years 15

DSCR – Phase I 1.82

DSCR – Phase II 2.81

Strategy for implementation It is important for Thankassery port to pre-empt direct competition with existing major ports such as

Cochin port and Tuticorin port as these ports already have huge volumes of business and state of the art infrastructure in place. Accordingly Thankassery should be positioned as a coastal port complementing the existing operations of Cochin Port and the proposed operations at Vizhingham port.

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At present the depths available at wharfs and inside the harbour are about -6.5 m to -7.0 m , which will allow vessels having draft upto 5.5 to 6 m to operate in the harbour. This will allow vessels of size 6,000 to 7,000 dwt to berth at all tides. Hence in phase 1 it is proposed to commence operations using 6,000 to 7,000 DWT vessels with minimal investment as this option obviates the requirement for deep dredging. In other words, the huge capital and maintenance dredging costs is pre empted here. In phase 2 from 2020, the port would be able to handle 15,000 DWT vessels ( after dredging) considering the increased traffic.

The State Government has already done a significant amount of the effort over the period of years to provide a ready gateway facility. This obviously becomes a selling point for Thankassery port, since the prospective Developer can invest the minimum amount required for material handling equipment, strengthening of berth and other minor contingencies and this also minimizes the risk for prospective private developers who can start operations within two to three months of signing of the concessionaire agreement.

Having an existing infrastructure also offers the prospective developer to utilize the facilities to its optimum capacity. Accordingly the private developer can observe the traffic flow to the port for a period of 5 to 6 years and based on the prevailing circumstances can ramp up capacities. This provides the port developers a leeway in terms of port planning.

The evacuation of the cargo is a critical parameter for Thankassery port and hence it is necessary

that the existing road network is augmented by additional dedicated four lane road corridor from the port complex upto a suitable point on the National Highway – 47 connecting Trivandrum and Cochin. The port connectivity is to be incorporated as part of development plan of Kollam city and surrounding areas in consultation with urban development authorities of Government of Kerala.

With regards to the development of the rail connectivity to the Kollam ( Thankassery) port, presently the inland movement of the cargo type being generated from the hinterland identified for Thankassery port is mainly through road since the primary cargo generators are within the radius of 150- 200 kms from the port. Cargo generators in the secondary hinterland of Tamil Nadu for the Kollam port is expected to use the rail connectivity, though this cargo expected is not very significant due to the same being routed towards Tuticorin port. Presently, based on the cargo identified for the port, rail connectivity is not a pre-requisite. However, if such a connection exists, it will provide additional advantage to the project.

The cost for the development of road connectivity and that of the rail (if required) should preferably be undertaken by the government for making the project feasible and attractive to a private developer

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1. Introduction

1.1 Project background & rationale

This chapter encapsulates the background information about the Client and purpose of this project

report.

The Client, Directorate of Ports (DoP) has been mandated to undertake all activities of the Kerala State

Government for the development of port sector in the State. Kerala is endowed with a nearly 590 km

long coastline and enjoys proximity to the international sea route. To leverage on this geographical

advantage, the DoP has embarked on an ambitious mission of developing several green field ports along

the Kerala coast under the Public Private Partnership (PPP) model. This initiative bodes well with its

endeavor of becoming a maritime state and ensuring world class infrastructure as articulated in the

document ‘Vision 2025 for State of Kerala’ compiled for the Kerala State Council of Confederation of

Indian Industry (CII). Furthermore, with US $ 18 billion likely to be invested in port sector in India over a

time frame of next 5-7 years, this initiative is well justified1.

The port of Thankassery figures in the priority list of ports to be revived and developed for small modern

vessel shipping. With a view to gauge the future potential of the proposed port at Thankassery (Kollam),

the Directorate of Ports entrusted Deloitte Touche Tohmatsu India Pvt. Ltd. (DTTIPL) the task of

preparing a detailed project report (DPR). The broad level scope of work is spelt out below:

Conduct a detailed study of the cargo movement to & from the hinterland regions

Market analysis including traffic forecast for the port for 20 years

Determine the location & types of cargo handling facilities and back up area required with detailed

land acquisition plans

Determine and fix levels to which capital and maintenance dredging is required along with a detailed

dredging plan

Details of fire fighting, sanitary arrangements, water and waste water management and obtaining of

all necessary clearances from relevant authorities in this regard

Preparation of Master plan with berth orientation, berth dimension, services, and facilities along

with proper security plan under ISPS code

Conduct a Rapid Environmental Impact Assessment (EIA) & Technical studies to ensure an

environment friendly and sustainable port development

Detailed cost estimation, both capital and operation maintenance

Fixation of tariff structure and revenue estimates

Project structuring option along with recommendation

Project implementation methodology, phasing of infrastructure, and suggesting timeline for

development

Recommendation of the structure of Special Purpose Company (SPC)

Funding options / arrangements for the project and identify the resource for meeting the project

1 Shipping Industry Update - September 2009

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Evaluate the possibility for establishing alternate source of revenue like commercial complexes, SEZ

etc.

1.2 Structure of the Report In the course of compiling this report, DTTIPL has ensured that specific requirements as outlined in the

RFP have been addressed appropriately. The report contains chapters on project background, overview

of business landscape, traffic and hinterland analysis, site investigations, port planning aspects,

operational aspects, determination of tariff and other revenue streams, project cost estimation,

financial analysis and recommendations as structured in the table below:

Chapter Topics Covered

Chapter 1 This chapter on introduction covers project background , rationale, & report

structure

Chapter 2 This chapter deals with the overview of business landscape – PESTLE and SWOT

analyses

Chapter 3 This chapter addresses the Traffic Analysis component which includes Deloitte

approach to traffic study, hinterland mapping, commodity profiling, traffic

forecasting by commodity based potential and traffic projections under low,

medium and high growth scenarios.

Chapter 4 This chapter covers the details of the site investigations including environmental

details, connectivity issues, topography of the region, bathymetry, tide, wave, wind,

current and profile of the existing infrastructure such as power, water, roads,

railway, telecommunications etc.

Chapter 5 This chapter deals with Port planning and narrates the

Existing port facilities

Planning methodology

Strategy for project planning

Port layout

Port facility requirements – governing vessel size, berth requirements,

Dredging, etc.

Planning criteria – tranquility requirements, turning circle,

marine operational criteria and storage area levels

Planning consideration and specifications of operations - width and depth of

channel

Cargo handling equipments – for general cargo, bulk and containers

Navigational aids etc.

Chapter 6 This chapter provides details of capital costs and operation & maintenance costs for

the various facilities so planned

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Chapter Topics Covered

Chapter 7 This chapter covers the overview of tariffs, regulatory framework, tariff setting and

tariff determination

Chapter 8 This chapter deals with the financial analysis covering the identification of revenue

streams, cost structure, debt-equity ratio, projected profitability and cash flow

statements, estimation of net present value (NPV), internal rate of return (IRR) and

debt service coverage ratio (DSCR)

Chapter 9 The last chapter of the main report provides the strategic recommendations about

the proposed project at Thankassery (Kollam)

Annexure This includes the details of the stakeholders contacted for the primary survey, the

rationale behind the cargo growth rates, connectivity map, topography and contour

map of port area, borehole tests results, report on REIA study undertaken by CED,

port development layout plan, detailed financial calculations and the clarifications

provided on the draft report submitted based on the queries raised by the

Directorate of Ports

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2. Overview of business landscape

The business landscape is considerably influenced by the macro-economic environment such as

Government policies, legal framework, etc. Despite having a commendable Human Development Index

(HDI) and impressive socio-economic indicators, Kerala is lagging in terms of industrialization. This

chapter provides broad contours of the business environment with analysis of strengths, weaknesses,

opportunities and threats for the proposed project.

2.1 PESTLE analysis Business environment covers factors affecting the business which are external and needs to be assessed

for its likely impact on port development. PESTLE is an acronym for the six key strategic areas of change,

namely: Political, Economic, Social, Technological, Legal, and Ecological and a technique for

understanding the impact of various external influences on a business. The study aims to analyze the

following -

a) Regulatory policies, legislation and standards imposed on the industry

b) Enabling technologies and trends in the port sector

c) Developments in the region and international scenario

d) Social and political factors likely to impact the proposed Thankassery port

2.1.1 Political

The port sector in India is influenced by political developments at both, the Central and the State levels.

Although political developments at the Centre do not have a direct bearing on port operations, it

manifests in form of hinterland developments and also affects EXIM trade.

Kerala has been under coalition politics ruling at the State level most of the time. The state has achieved

a high degree of success in social health care, literacy, land reforms, education, and social service

initiatives. However, in terms of industrialization, it is way behind other states like Gujarat, Maharashtra,

Tamil Nadu and Haryana. Traditionally, it has been home to small scale industries like coir making,

fishing and agricultural / horticultural products like spices, cashew, rubber, etc.

To its credit, Kerala was the first state to successfully develop an airport under the Public Private

Partnership mode. Cochin International Airport (CIAL), a public company, was set up with the support of

Non-resident Indians, a 13 % holding each by the Government of Kerala and the Central government and

the balance 74 % majority held by private players. Today, Kerala boasts a total of eleven contracts under

PPP mode, the values of which total up to approx INR 11,973 Crores2. With PPP now covering most of

the infrastructure projects including highways & ports, and the state having demonstrated its

2 www.pppindiadatabase.com

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commitment with CIAL, the road ahead for other project developments under the PPP mode should not

be difficult.

2.1.2 Economic

An extensive secondary research was carried out in order to determine the impact of economic factors

on development of Thankassery port. The economic analysis aims at covering the following two

dimensions in a nutshell:

Economic trends in India

Sectors and industries in Kerala

India’s gross domestic product (GDP) expanded 7.9 per cent in the second quarter of 2009-10 fiscal, up

from 6.1 per cent in the first quarter. The government is optimistic about the spurt in GDP growth and

views the figures as further confirmation of the economy’s recovery. Further, the Organization for

Economic Co-operation and Development (OECD) has forecasted GDP growth for India at 7.3 percent

and 7.6 per cent in 2010 and 2011 respectively. Real GDP growth is forecast to average around 6% for

the next nearly 20 years, making India one of the fastest-growing economies in the world.

Kerala’s economic performance is driven by the secondary and tertiary sectors. The state‘s GDP grew at

a compounded annual growth rate (CAGR) of ~ 12 per cent between 1999-00 and 2008-09 to reach US$

40.5 billion3. Driven by manufacturing, construction, electricity, gas and water, the secondary sector has

been the fastest growing sector, at a CAGR of around 14.5 per cent. The per capita income of Kerala was

US$ 1,040 in 2007-08, as compared to all-India average of US$ 850.

The tertiary sector, the largest contributor to Kerala‘s economy, grew at a rate of 12.5 per cent in 2007-

08, over 2006-07. The sector was driven by trade, hotels, real estate, transport and communications.

2.1.3 Social

The socio-cultural setup plays a pivotal role in determining the future business potential of a proposed

venture and port development is no exception. Given the current state of affairs and future growth

potential of South Malabar region, port development activities would provide the necessary impetus for

development of trade and industry in the region.

Investor perception, is no doubt improving with time, but needs to be nurtured by organizing regular

workshops with a view to facilitate interaction and exchange of thoughts between different stakeholder

groups. Certain section of the fishing community in the Thankassery region expressed concern on

sharing of the waters with a port. Hence, efforts will have to be focused on moulding community

opinion & getting the locals to support port development. On the other hand, perception of local units

in cashew & seafood processing has been extremely encouraging. All these factors were identified while

conducting the primary research and stakeholder analysis.

3 Kerala State - Budget in Brief 2009-10

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2.1.4 Technological

As the world economies come closer with globalization, ports are being increasingly cast as partners in

assisting customers to compete for business share in the global market. Advancements in port

technology, particularly relating to containerization and information exchange, are warranting the need

for major financial commitments to stay ahead of the technology wave. In India all the major ports and

airports are being linked to the centralized Electronic Data Interchange (EDI).

Cochin is the first port to have successfully launched the concept of ‘ePort’, which essentially integrates

the port’s operational, financial, real estate, & human resources on an integrated Port Information

system. It also ensures a single window facility to trade for filing out application, receiving service bills,

payments & enquiries. Once fully functional, ePort will provide interface between customs, port users,

banks, and port community system of all India Ports Association.

A late entry in a competitive setup implies immense potential to incorporate the best and latest of

technology in their proposed operational set-up, without worrying about the compatibility with the

legacy systems. Upcoming ports like Thankassery can draw on this opportunity by providing advanced

technologies like Global Positioning System (GPS), Warehouse Management System (WMS), Radio

frequency identification (RFID), and thereby gain competitive edge over the operational ones.

2.1.5 Legal and Regulatory

Regulation in infrastructure, be it maritime / ports or any other area, must be aimed at achieving

inclusive growth. Nationwide, some of the commonly faced regulatory hurdles in maritime and logistics

space can be broadly grouped as under –

Customs

1. Outdated customs formalities including documentation causing huge delays

2. Complex / unclear rules & regulations leaving interpretation to the discretion of Customs

officials

Taxation / Bureaucracy

1. Multiple taxes render Indian shipping internationally uncompetitive

2. Involvement of multiple agencies such as Commerce Ministry for ICD/CFS/SEZ, rail ministry for

private rail terminals, Ministry of Surface Transport for Roads, & Shipping Ministry for Ports /

Shipping leading to cost overruns, inconvenience & delay

3. Applicability of multiple acts such as Railway Act, Merchant Shipping Act, Indian Ports Act,

MMTG Act rendering compliance cumbersome as regards multi-modal operations

Intervention at the Central level is indispensable in getting these issues resolved. However, pro-

activeness & commitment of State Maritime Boards / Port departments can go a long way in helping the

sector sail through regulatory hurdles. Gujarat’s success in developing a good port sector was also

possible due to phased privatization followed by fully private ports.

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2.1.6 Environmental

Kerala’s coastal stretch is characterized by the presence of lagoons, kayals, estuaries and coastal dunes.

It also has a rich biodiversity and is home to many exotic species of birds, animal and plants.

Any developmental activities along the coast may pose a threat to the environment in form of soil

erosion, pollution, salt-water intrusion, etc and this can adversely impact the region’s biodiversity.

Hence, environment assumes a very high significance for developmental projects including ports and

airports.

A Rapid Environmental Impact Assessment (REIA) has been conducted by DTTIPL through its technical

associate, Centre for Environment and Development (CED) to diagnose the future likely impact of port

development on various aspects of environment. The summarized findings of the same have been

indicated in section 4.8.

2.2 SWOT Analysis SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses,

Opportunities, and Threats involved in a project or in a business venture. The SWOT analysis facilitates a

thorough investigation into the port’s internal & external factors and helps set a blueprint for further

development action.

2.2.1 Strengths

Kollam has been enjoying commercial and trading reputation since ancient times. The Thankassery port

is known to have attracted Arabs, Portuguese, Greeks, Chinese and British for trading. Also, Kerala’s

cashew-nut industry is centered here. To begin with, this can ensure minimum regular volumes of

cashew cargo for the port. Sooner or later, port development will trigger growth of cashew industry,

leading to substantial cargo volumes over the longer horizon.

Based on the foresight that infrastructure development is the prime –mover for industrial development,

the State Government developed existing port facilities that would provide the private developer a

ready-made infrastructure set-up to commence operations from Day 1. A 116 m long wharf and a 6.3 m

deep draft are currently available at the port. The designed draft of 10 m will enable the port to handle

vessels up to 15,000 – 20,000 DWT.

Again, the Port is a protected harbour and conducive for all-weather operations. It is outside the normal

path of tropical cyclones and can therefore be regarded as a “Safe Port”. It has had no history of “anchor

dragging” even in foul weather.

2.2.2 Weaknesses

Narrow approach roads to the jetty have been a hindrance so far. Nevertheless, work is in progress to

broaden it to a four lane road connecting NH-47. Coastal road from Thankassery to Vadi is also

underway. Seafood exporters further suggest widening of existing 5 m wide road between Thankassery

and Neendakara. Labour related issues is a concern at Thankassery port, but can be managed.

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2.2.3 Opportunities

Besides being able to handle exports of a variety of items including processed minerals, cashew, and

marine products from the region,

Thankassery has the potential to

cater to a booming coastal trade.

If rail connectivity to Tamil Nadu

hinterland is enhanced, it will enable

the port to also cater to the

industrial belt of Madurai / Theni.

Further, development of

Vallarpadam & envisaged Vizhinjam

International Container Terminals

(ICTs) will boost the possibility of

feeder services from Thankassery to

these locations.

With the State Government support

& initiatives headed in the right

direction, the port development is

likely to sail through without much

difficulty.

Figure 1 : SWOT analysis of Thankassery port

2.2.4 Threats

Although the overall picture is quite encouraging, alternative modes of transport such as rail / road and

other potentially competing ports & their relative locational advantages pose a threat to the proposed

port at Thankassery. Primarily, it is the ability to attract a good private developer that can hold the port

in good stead and help it to develop a competitive advantage over time.

Initially a minor port, Tuticorin today has captured a significant market share & has flourished over the

past more than two decades. It caters to some portion of Kerala cargo in addition to the cargo having

origin / destination in Tamil Nadu & other states. Not only does Tuticorin port share some part of

Thankassery port’s secondary hinterland, but some Kerala based EXIM players also prefer Tuticorin port

for operations.

Ports & shipping has been one of the severely affected industries during the recession. Although cargo

outlook in the medium to long term looks favorable, private players would continue to face several

challenges.

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3. Traffic assessment

3.1 Approach to the traffic study

There has been no exhaustive past cargo trends recorded from Thankassery port. Accordingly, to

determine the type of infrastructure facilities (off-shore and on-shore) that would be needed to be

developed at the port, it was essential to understand the nature of commodities and their indicative

quantum that might call on the Thankassery port. This necessitated the need of a comprehensive traffic

study.

Cargo traffic based on Origin-Destination (O–D) analysis , with contribution and share of Kollam and

adjoining districts including Pathanamthitta, Thiruvanthapuram, part of Alappuzha, Kottayam, Idukki

and the bordering districts of Tamil Nadu was undertaken.

The likely open cargo that would be routed through the port of Thankassery has been considered based

on the following -

• Primary survey in the areas identified as hinterlands (cargo belts) to obtain insights from the

stakeholders on -

Assessment of the EXIM commodities in the identified hinterland

Topography and connectivity issues that may impede / hasten the cargo flow through

Thankassery port

Acceptability of the relevant stakeholders ( shippers) on diverting their cargo to Thankassery port

The indicative cost savings

• Distance of the cargo belts to Thankassery port vis-à-vis the other existing and upcoming ports in

the region

• Identification of such open cargo in terms of commodities and their indicative quantum

• Forecasting of cargo growth and traffic based on the commodity profiles and growth potential for

EXIM trade / coastal shipping that reflects the above ground realities.

3.2 Hinterland mapping

The competitive position of a port is largely dependent upon the quality and reach of its hinterland

connections. In order to identify the different market segments, the entire hinterland has been divided

into different cargo belts.

Cargo belts are defined as discrete geographical areas which can be identified with a particular set of

commodities i.e. containers, bulk and break bulk generated from these areas and which have a

reasonable share in Export Import (EXIM) trade from the hinterland.

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Based on this classification, the entire hinterland for Thankassery port has been divided into two major

cargo belts. For the purpose of this report, the primary hinterland has been treated as the districts of

Kerala adjoining to the Thankassery port and the secondary hinterland as the border districts of Tamil

Nadu. The cargo belts identified based on the above assumptions are as follows:

Table 1: Regions in the primary and secondary hinterland

Figure 2 : Indicative primary hinterland for

Thankassery Port

Figure 3 : Indicative secondary hinterland for

Thankassery Port

In order to determine the potential of each cargo belt, a desk based research was undertaken initially.

Subsequently, various stakeholders were identified, shortlisted and contacted for detailed interaction.

Accordingly, all the relevant stakeholders concerned with a Gateway Port were contacted and these

included -

Major industries,

Coastal shipping companies,

Customs house agents,

Commodity boards,

Trade associations,

Regional export promotion trade bodies,

Commodity export promotion body,

Customs officials,

District Industries Centre,

Primary hinterland Secondary hinterland

• Kollam

• Pathanamthitta

• Thiruvanthapuram

• Parts of

Alappuzha,

Kottayam and

Idukki

• Kanyakumari

• Theni

• Madurai

• Virudunagar

• Tirunelveli

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Logistics service providers including inland container depots, container freight stations.

A judicious combination of structured as well as unstructured questionnaires were administered by the

survey team in order to obtain a better understanding of the cargo flow pattern of various commodities

in and out of the respective hinterland. More than 150 stakeholders from the referred sectors were

covered across the primary and secondary hinterland region and the details of the same are enclosed as

Annexure 1. The indicative profile of the cargo commodities considered as per the inputs obtained

during the primary survey is indicated in the table below. In addition to the EXIM cargo, the coastal

cargo movement pre-dominantly between Gujarat and South Kerala has also been taken into account.

Cargo belts Commodities considered

Primary 1. Cashew nuts,

2. Cashew kernels,

3. Cashew nut shell liquid,

4. Seafood,

5. Clay,

6. Timber logs,

7. Sillamanite,

8. Titanium-di-oxide,

9. Marbles / tiles,

10. Blood bags,

11. Sand,

12. Newsprint / waste paper,

13. Equipment / raw materials

14. Cement

15. Finished fertilizers (Urea & Muriate of Potash)

Secondary 1. Marbles / tiles,

2. Timber logs,

3. Rubber,

4. Food & agri products,

5. Cement

Table 2: Cargo profile of the primary and secondary hinterland

Note – The hinterland analysis was achieved based on the information obtained from the respondents

contacted in the primary survey. While the overall cargo traffic at respective major ports is available

from secondary research, the individual district wise cargo flow of the state of Kerala is not readily

available on secondary domain. To gauge the indicative traffic that would be expected from a particular

hinterland and their willingness to divert the cargo to an alternate port required the inputs from the

relevant stakeholders from the region.

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3.3 Primary hinterland analysis Considering the distances between the primary hinterland districts & Thankassery (Kollam) / Cochin

ports, it is quite justifiable that cargo meant for / originating from Alleppey, Kottayam, & Idukki would

be more or less tied to Cochin port or to the cargo harbour of Alappuzha ( once it is commissioned).

Hinterland districts Kollam Cochin

Alleppey 77 km 57 km

Kottayam 86 km 72 km

Idukki 238 km 132 km

Pathanamthitta 64 km 131 km

Trivandrum 61 km 194 km

Table 3: Indicative road distances between the identified primary cargo belts and gateway ports

Source: http://www.mapxl.com/highway-path-finder/map_routing.phtml?config=routing

Possible cargo from the districts of Kottayam & Idukki has also been considered in calculating the likely

open cargo for Thankassery port. Most hinterland cargo is in containerized format. Marine food

exporters and log importers seem to use FEU reefer and FEU4 normal containers respectively.

3.3.1 General observations based on the primary survey

The observations are based on the discussions from the various respondents contacted about the future

potential of Thankassery port

All respondent cashew & sea food exporters at Kollam were very much in favour of port

development & anticipated almost 100% diversion of their cargo to Thankassery. To the extent to

which Kollam based cashew exporters have units in Tamil Nadu, exports would be tied to Tuticorin

port.

Significant coastal movement (around 2,100 TEUs per month) between ports of Gujarat to Cochin

with almost 25% of the cargo meant for the primary cargo belt region.

Kottayam Port / ICD is being marketed in terms of having connectivity to Cochin port by way of

inland waterways. It also caters to the landlocked districts of Kottayam, Idukki & Pathanamthitta.

This could further mean a portion of Pathanamthitta cargo being moved to Cochin via Kottayam ICD,

and therefore a possibility of diversion of lesser cargo to Thankassery port.

Generally, the EXIM players seem to be comfortable with Cochin port. Labour strikes and

disturbances seem to be the only problem faced. In such instances or at times when the orders are

on the higher side or at the insistence of the buyer, they use Tuticorin port. Chennai port is rarely

used.

4 The logs are imported both in bulk and in FEU containers depending on the importer’s requirement. Those brought in FEUs

are however transported to their inland destination by removing the logs from the containers at the timber storage yard and routing it to the importer in trailers in loose / bulk basis.

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Shipping companies, logistics players have indicated that Thankassery can easily expect around

2,000 to 4,000 containers per month , subject to -

the port charges, vessel related charges (pilot age, tug etc), ground rent charges , THC should be

almost half of that charged by Cochin port

Storage free time should be more than Cochin port

3.4 Indicative traffic of the primary hinterland and

potential open cargo The potential open cargo for Thankassery port for the hinterland has been analyzed based on the district

wise commodity flow and the coastal cargo. The analysis of the potential open cargo has been analyzed

in the subsequent sections.

3.4.1 Open cargo from Kollam district

The potential open cargo from Kollam district for the base year 2009 has been indicated in Table 4 based

on the following analysis -

1. Raw cashew nuts - The import of raw cashew nuts into India rose from 2.49 lakh tonnes in 2000-01

to a 6.05 lakh tonnes in 2008-09, showing a CAGR growth rate of around 11%. The lion share of

imported raw cashew (upto 60%) was utilized by processing units in Kerala. The imports of cashew

nuts in Kerala from Cochin port has increased from 2.9 lakh tons in 2003-04 to 3.72 lakhs in 2007-08.

Almost 80-90% of imported cashews is routed to Kollam and adjoining areas. Accordingly taking

80% of the import to Kollam, we have - 3.72 lakhs x 80% = 2.97 lakh tons (18,600 TEUs). CHAs are

also of the opinion that annual imports of raw cashew nuts at Thankassery could range around

17,000 TEUs.

2. Equipment - Import containers for raw materials, etc. other than major cargo items & Less than

Container Load (LCL) equipment cargo are assumed to total up to 100 annually. We have divided

this equally among Kollam & Thiruvanthapuram. i.e., approx. 50 TEUs p.a. each.

3. Cashew kernels - The total exports of Kollam / Pathanamthitta units (obtained as a percentage of

the total exports from India and data provided from The Cashew Export Promotion Council) is to the

tune of around 60,000 tons. Assuming the proportion of usage of Cochin & Tuticorin ports as 99:1,

we arrive at 59,400 tons or 3,960 TEUs for Cochin. We can safely assume that cashew cargo would

be tied to Kollam, in which case the likely quantum at Kollam for base year would be around 3,960

TEUs. The figure also matches with the actual figures indicated by Seaway Shipping ( 300 TEUs per

month i.e. around 3,600 TEUs per annum) and the minimum possible cargo predicted by one of the

leading CHAs in the region, Jai Narayana Shipping.

4. Frozen Marine Foods - Total number of seafood containers from Kollam as per primary survey is

around 1,260 numbers of TEUs.

5. Titanium di-oxide & Sillimanite: These represent the minimum annual export quantities of Kerala

Minerals & Metals Ltd (KMML) and Indian Rare Earths, Chavara respectively.

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6. Cashew nut shell liquid: Aggregate of quantities currently being exported by Kollam units, as sourced

from (Cashew Export Promotion Council) CEPC website is given below:

Import Commodity Annual Qty in tons Annual Qty in TEUs

Raw Cashew Nuts 297,600 18,600

Equipment 500 50

(A) 298,100 18,650

Export Commodity Annual Qty in tons Annual Qty in TEUs

Cashew Kernels 59,400 3,832

Frozen Marine Foods 15,120 1,260

Titanium di-oxide 7,200 400

Sillimanite 400 18

Cashew nut shell liquid 6,500 325

(B) 88,620 5,835

Total [(A) + (B)] 386,720 24,485

Table 4: Potential open cargo from Kollam district

3.4.2 Open cargo from Thiruvanthapuram district

The potential open cargo from Thiruvanthapuram district for the base year 2009 has been indicated in

Table 5 based on the following analysis -

1. Equipment & Raw materials: As already indicated in the point number 2 of Kollam cargo

calculations; Import containers for raw materials other than major cargo items & LCL equipment are

assumed to total up to 100 annually and dividing this equally among Kollam & Thiruvanthapuram,

we obtain around 50 TEUs p.a. for the region of Thiruvanthapuram.

2. Blood bags: The quantum of blood bags is expressed in terms of cartons & not tons. It is a company

specific quantity (requirement of Terumo Penpol)

3. Clay & Titanium di-oxide: They represent the likely cargo quantities for English India Clays &

Travancore Titanium Products Ltd respectively.

Import Commodity Annual Qty in tonnes Annual Qty in TEUs

Equipment & Raw materials 500 50

(A) 50

Export Commodity Annual Qty in tonnes

Annual Qty in TEUs

Blood bags 740 148

Clay 10,000 667

Titanium di-oxide 1,980 110

(B) 12,720 925

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Total [(A) + (B)] 13,220 975

Table 5 : Potential open cargo from Thiruvanthapuram District

3.4.3 Open cargo from Idukki district

The potential open cargo from Idukki district for the base year 2009 has been indicated in Table 6

Particulars Processed Cardamom

Black Pepper

Spice Oils & Oleoresins

Total

Item wise exports through Cochin Port in MT 243 26,371 5,802 32,416

Export from Cochin and originating from Kerala

231 25,052 5,512 30,795

% of export cargo origination from Idukki district

90% 70% 50% -

Quantity of export item from Idukki district 208 17,537 2,756 20,501

Quantity in TEUs 14 1,169 138 1,321

Open cargo % 10% 10% 10% 10%

Open Cargo in tons 21 1754 276 2050

Total Open Cargo in TEUs 1 117 14 132

Table 6 : Potential open cargo from Idukki District

Working notes for Table 6 –

1. Item wise exports through Cochin port have been obtained by averaging figures for last two years

2. 95% of Cochin exports of the above spice items are assumed to be originating from Kerala

3. Idukki’s contribution to Kerala’s exports of processed cardamom, black pepper and spice oils /

oleoresins is assumed as 90%, 70%, & 50% respectively

4. Taking percentage of open cargo for Kollam as 10%, we arrive at a total annual figure of 132 TEUs

5. Tea cargo from Idukki would be tied to Cochin & Tuticorin ports. Regardless of where tea is grown

(indicated by existence of tea estates), tea will be exported either from Cochin or from Tuticorin

ports. It is not directly exported even by bigger players like Harrisons Malayalam & AVT, but is sold

out at auction. Although ports may develop at several places along Kerala coast, it will not be

feasible to have a Tea exchange set up at such small locations (at present, tea exchanges are in

Coimbatore, Cochin & Coonoor)

3.4.4 Open cargo from Kottayam district (Rubber)

For Kottayam district, rubber related EXIM cargo has been considered and the calculation of such a

possible open cargo has been indicated in the Table 7 below. The approach for arriving at the workings

has been indicated in the working note after the Table:

Particulars 1 2 3 4 Total

Export ( Natural

rubber)

Exports (Reclaimed

rubber)

Imports ( Natural rubber)

Imports (Synthetic

rubber)

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Particulars 1 2 3 4 Total

Export ( Natural

rubber)

Exports (Reclaimed

rubber)

Imports ( Natural rubber)

Imports (Synthetic

rubber)

Item wise Annual EXIM through Cochin Port in tonnes

46,926 4,317 5,037 NA NA

EXIM from Cochin and origin / destination in Kerala

46,472 4,317 4,381 37,184 92,354

% of export cargo origination from Kottayam district / import cargo landing in the hinterland districts

55% 55% 39% 55% -

Quantity of EXIM cargo from / to Kottayam & other hinterland districts

25,604 2,374 1,709 20,451 50,138

Quantity in TEUs 1,348 125 90 1,076 2,639

Open Cargo % for Thankassery Port

5% 5% 26% 5% -

Open Cargo in tonnes 1,280 119 444 1,023 2,866

Total open cargo in TEUs (max)

67 6 23 54 150

Table 7 : Potential open rubber based cargo from Kottayam district

Working notes -

1. In the table, in column number(1) , the total of party wise figures for 2008-09 obtained from Rubber

Board is assumed to be quantum of natural rubber exported from Cochin port. The quantum of

Cochin bound rubber cargo originating from Kerala is arrived at by excluding rubber exports by

parties based out of Kerala from the above.

2. Number of district wise manufacturing units is not available. Again district wise production isn’t a

justifiable basis for apportionment. Hence in (1) above, percentage of rubber cargo generation

(55%) from Kottayam has been derived based on available data i.e., Kottayam vis-à-vis Kerala. This

percentage is assumed in (2) & (4) also.

3. In (1) above, going by the factory locations of parties, natural rubber exports is to the tune of 25,604

tonnes are assumed to originate from Kottayam based units.

4. In (2) above, Kerala’s export of reclaimed rubber has been calculated by applying the proportion of

Kerala based manufacturing units vis-à-vis all India units to country’s total exports of reclaimed

rubber.

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5. In (4) above, Kerala’s import of synthetic rubber is calculated by applying the proportion of state’s

relative share in national consumption to country’s total synthetic rubber imports.

6. We have assumed 5% diversion of Kottayam cargo to Thankassery for all types of rubber. The only

exception is made to imports of natural rubber [In (3) above]. Since district wise number of dealers

& total dealers of natural rubber in Kerala are available, we have considered natural rubber imports

only by districts in the immediate hinterland i.e., Kollam, Pathanamthitta & Trivandrum (i.e., 39%

share of Kerala imports). Based on the percentage of rubber dealers in the districts of Kollam,

Pathanamthitta & Trivandrum which comes to around 26%, we are assuming an identical

percentage diversion of cargo to Thankassery.

3.4.5 Open cargo from Pathanamthita district

Pathanamthitta is considered as an industrially backward district. At the most, some spice cargo can be

expected to come from here to Thankassery port. Few spice exporters are also based out of Kottayam.

As per primary sources, these districts could collectively account for approximately 10-15% of Kerala’s

pepper exports. Applying a median rate of 12.5% to Kerala’s pepper exports of around 27,500 MT, we

get 3,437.5 MT. Assuming 25% of this to be open cargo for Thankassery port , we get 859 tonnes or

around 60 TEUs per annum.

3.4.6 Coastal cargo movement between Gujarat and Kerala.

Marbles /tiles / ceramics

Kerala being pre-dominantly a consumer state, there is significant cargo movement from the Northern

states to Kerala including marbles / granites. The movement of the same is in containerized format and

each TEU has a capacity of 28 tons. Based on the interactions with the coastal shipping companies it is

estimated that Thankassery may handle around 270 TEUs of marble / granite per month.

For handling the marble containers, a higher capacity material handling equipment would be required.

This would lead to additional investments to the tune of almost 70-80%, which would not seem prudent

when, for handling almost 95% of the identified containerized cargo; a material handling equipment of

lesser capacity would suffice. Accordingly to keep the capital cost of the project to a reasonable value

thereby facilitating a better probability of making the project feasible, the marbles / granites commodity

have been excluded from the potential cargo possibility at Thankassery.

Clay powder

English India Clays has a coastal movement from Cochin to Mundra meant for domestic consumption for

the NCR region to the tune of around 2,000 TEUs (30,000 tonnes) per annum.

Sand

Sand is moved through the coastal route from Gujarat. In this regards, an existing shipping agent

confirmed employing Thankassery port for coastal movement of sand from Gujarat. The quantum of

sand indicated is around 72,000 tonnes per annum (parcel size of 6,000 tonnes and one shipment per

month).

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Cement

Based on the interactions with a leading cement manufacturing company ( Ultra Tech Cement) which

has its plant in Gujarat, there does exist a strong possibility of Thankassery port being used as a

shipment and distribution point for South Kerala. The company has expressed its interest and based on

the response shown by the cement manufacturer, around 0.6 million tons has been considered. The

same has been considered based on the market side demand. In addition to Ultra Tech Cement,

another cement entity (Mehta Group)which has its base in Gujarat had approached DoP ( after the

submission of the draft DFR) with an expression of interest to use the port of Thankassery as its gateway

port in Kerala for its cement distribution. Accordingly the same has also been considered in the traffic

estimates in this report ( to the tune of around 5 lakh tons per annum)

3.4.7 Other import cargo

A study was also undertaken on the cargo imported by companies located in the districts of Kollam and

Trivandrum, which uses Tuticorin as the port of call. A dominant section of the imported cargo was logs

and newsprint / waste paper.

Newsprint / waste paper

Companies importing newsprint / waste paper, do so in TEUs as well as in FEUs. Most of these units are

based out of Kollam , Trivandrum district and import the cargo from Tuticorin. These companies so

contacted indicated that the import consignment is transshipped from Colombo to Tuticorin from where

it comes via road to their units and were open to Thankassery port, once it is commissioned. The

average annual imports of newsprint from Tuticorin for the past two years were 180 TEUs and 130 FEUs.

Timber logs

With regards to timber logs, the same are imported through Tuticorin port in bulk and also in FEUs.

Imports of timber logs originate from the countries of West Africa, New Zealand, Burma, Indonesia, and

South America. Only imports from South America are through FEU containers, while the other countries

are sending their consignment in bulk. However the logs imported through containers are offloaded at

the timber storage yard near the port and the same is then dispatched to the consignee on truck. Hence

for arriving at the quantum of timber imports, the same is expressed in tonnes.

In Kerala, the major timber units are based in Trivandrum, Kollam and Pathanamthitta. The orders for

the timber logs are placed through indenting agents based in Tuticorin. On interaction with these

indenting agencies viz Hari & Co, Prabhat Saw Mills, it was mentioned that Kerala importers preferred

Burma teak and around 2-3 vessels of timber meant for importers in Kerala call on every month in

Tuticorin. The quantum of cargo of these Kerala importers is around 10,000 tons per month from

Tuticorin. The quantum of timber cargo meant for the importers based in Kollam and Trivandrum is to

the extent of 4,000 tons.

The Kerala timber importers when contacted expressed their intention on using Thankassery port, since

it would save the inland road transportation cost from Tuticorin to Kerala. However they have indicated

the following factors that needs to be addressed in the event timber logs are being imported from

Thankassery port –

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Handling of timber logs requires specialized equipment and technical skills. Tuticorin has these

resources at their disposal, which in turn attracts the timber importers. The same should be

available at Thankassery port

After the timber is brought in the port, it is stored in the timber yards, before it is dispatched to the

importer through lorry. Storage of timber requires huge space and a minimum area of 10 acres

would be required for the storage of timber logs at Thankassery port.

The inland transportation of timber is through long axle trailers and the roads connecting the port

should be adequately equipped for the same.

The logs are usually bought in vessels which have a draft requirement of around 10 m, which should

be made available at Thankassery port.

In the event the above factors are addressed, the timber importers based in Kollam and Tuticorin would

be willing to divert their cargo to the extent of around 48,000 tons through Thankassery port.

Finished fertilizers

Aspinwall which acts as the principal shipping agent for FACT and Indian Potash Ltd have indicated that

for the import of finished fertilizers (Urea and Muriate of Potash), Thankassery port can be utilized.

Presently there is an import movement of finished fertilizers (Urea and Muriate of Potash (MoP)) to the

tune of around 1,00,000 to 1,50,000 tons per annum. The same is imported by FACT and Indian Potash

Ltd and repacked (without any processing) and distributed to the farmers in South Kerala.

3.5 Total potential open cargo for Thankassery port from

primary hinterland The total indicative open cargo based on the district, coastal and import quantities derived from 3.4.1 to

3.4.7 above for Thankassery port is indicated below -

Description Container Traffic Bulk / Break-

bulk Cargo

In TEUs In Tonnes In Tonnes

Primary Hinterland ( Kerala)

Kollam 24,485 386,720

Thiruvanthapuram 975 13,220

Idukki & Pathanamthitha

192 2,909

Kottayam 150 2,866

Coastal movement ( Clay)

2,000 30,000

Import cargo ( newsprint / wastepaper)

440 5,280

Coastal movement ( Cement)

1,100,000

Coastal movement ( sand)

72,000

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Description Container Traffic Bulk / Break-bulk Cargo

In TEUs In Tonnes In Tonnes

Import cargo ( finished ferilizers - Urea & Muriate of Potash)

125,000

Import cargo ( timber logs)

48,000

Indicative open cargo from Kerala ( primary) hinterland - A

28,243 440,995 1,345,000

3.6 Secondary hinterland analysis

Unlike the Kerala hinterland wherein the cargo volumes are relatively limited, the identified districts of

Tamil Nadu (Kanyakumari, Tirunelveli, Virudunagar, Theni and Madurai ) which form a part of the

secondary hinterland have a comparatively higher industrialization spread and hence generate a

significant amount of cargo. The preferred port for these districts is Tuticorin given the distance and the

good roads connecting these districts to the gateway.

Distance in Kms

Town Tuticorin port Thankassery port

Madurai 134.49 256.11

Bodinayakkanur(Theni) 223.23 215.69

Tirunelveli 54.97 163.85

Virudhunagar 155.32 261.76

Kanyakumari 122.79 143.36

Table 8: Indicative road distances between the identified secondary cargo belts and gateway ports

Source : http://www.mapxl.com/highway-path-finder/map_routing.phtml?config=routing

However considering the relative distance of some of the major cargo generators within these districts

specially Shencottai and Nagercoil, which is at a distance of 92 kms and 136 kms from Thankassery ,

there does arise a case of possibility of diversion of the cargo from the identified secondary hinterland.

Accordingly to ascertain the hypothesis, a comprehensive primary survey was also undertaken amongst

the identified districts in the secondary hinterland.

3.6.1 General observations based on the primary survey

The observations are based on the discussions from the various respondents contacted -

The states of Tamil Nadu and Kerala are separated by mountainous terrain which might increase the

cost of road transportation for the shippers in the event of them using the Thankassery port.

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It was however indicated by the respondents that Kanyakumari district especially Nagercoil and

bordering areas of Tirunelveli can form part of the Thankassery port hinterland since the distance of

these locations to Thankassery is slightly less than that to Tuticorin.

There is a general perceived apprehensiveness among companies in Tamil Nadu to use Kerala ports,

due to issues like labour strikes, additional formalities, transportation issues, language problems,

taxes etc.

Tuticorin is majorly a feeder port and cargo is transshipped from Tuticorin port to Colombo port for

export to international destinations. Of late, even mother vessels have been calling at Tuticorin port

but the frequency is less. Unless there are mother vessels berthing at the proposed Thankassery

port and that too at frequent intervals, it is unlikely that companies in the secondary cargo belts

would change their port preference.

Some of the respondents have their own warehouses in Tuticorin and shifting to any other port

would mean they have to invest again in building new warehouses. It would an added cost and their

existing investment would be made redundant

Certain respondents have indicated that they would be willing to shift to Thankassery port only if

port charges are lower as compared to other ports and their CHAs operate out of Thankassery port.

3.6.2 Profile of EXIM commodities

The port of call from the secondary hinterland is presently Tuticorin. The important commodities

exported from the region through Tuticorin port is indicated below:

Sr No

Districts Export Commodities

1. Madurai Textiles, cotton yarn, fabrics, garments, terry towels, granite slabs, made-ups, food products, tyres, coir products, etc

2. Tirunelveli Garnet sand, garnet abrasives, Gherkins, cotton yarn, dry flowers, coir products, etc.

3. Theni Coir products , coir pith, cotton yarn, fabrics, coffee, etc.

4. Virudhunagar Safety matches, cotton yarn, fabrics, polypropylene bags, spices, dry chillies, stationery items, printed books, etc.

5. Kanyakumari Coir pith blocks and coir products, sands & minerals, rubber/latex gloves, sea food, Fish nets, cashew kernels, etc.

6. Dindigul Textiles, granites, gherkins, paper

Table 9: Export commodities from Tamil Nadu hinterland

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The imports in these districts consists of Timber logs, marbles, raw cotton, metal scrap, waste paper,

machinery, chemicals, pulses, spices, raw cashews, maize, sugar, industrial coal, limestone, cement, PP

granules, etc.

3.6.3 EXIM traffic of the secondary hinterland and potential open cargo

To arrive at the likely open cargo that might be deviated towards the proposed port of Thankassery from

the identified secondary hinterland, a drill-down concept was used.

Since the port of choice for the companies and industries situated in the districts of Madurai, Theni,

Tirunelveli, Virudunagar, Dindigul & Kanyakumari is Tuticorin port, the amount of cargo through handled

at Tuticorin port from these districts was considered. The calculation of open cargo for Kollam was

based on the cargo that might be diverted to Thankassery port derived on the distance / cost advantage.

A significant portion (40-50%) of the cargo handled at Tuticorin port is from the Coimbatore-Tirupur-

Karur belt. With regards to the identified secondary cargo belts, the district of Madurai contributes

around 7-8% of the cargo handled at Tuticorin port and the other districts of Tirunelveli, Theni, Dindigul,

Virudunagar and Kanyakumari contribute to 2-3% of the port traffic taking the total cargo contribution

from the identified secondary hinterland to around 20-25%.

The exercise for identification and obtaining the baseline traffic that might be diverted to Thankassery

was undertaken in two phases. The first phase involved obtaining an overview of the respective

districts, identification of the major exporters and importers in the districts and communicating with

certain exporters and importers identified to obtain an understanding of the nature of EXIM trade in the

districts, their port of choice, etc.

The second phase involved procurement of established EXIM figures, detailed analysis of the statistics,

primary survey of select industries and substantiating the results to arrive at the open cargo figures for

the port of Thankassery from the districts of Madurai, Theni, Tirunelveli, Virudhunagar and

Kanyakumari. The methodology undertaken for arriving at the indicative cargo possible from Tamil

Nadu has been indicated in a step wise manner below

1. Step 1 – Procurement of Export / Import statistics

We procured established export and import statistics for the districts of Madurai, Theni, Tirunelveli,

Virudhunagar and Kanyakumari for the cargo handled through Tuticorin port from a consultancy

firm based in Tuticorin. The statistics were for all commodities imported and exported through

containers and bulk & break-bulk facilities for the financial year 2006-07, 2007-08 and 2008-09 from

the port of Tuticorin.

2. Step 2 – Basic analysis of the EXIM data

The process involved re-categorizing the export (5,000 line items for containers only) and import

(3,000 line items) data for the five districts into 8-10 major categories for each districts to facilitate

further analysis of data. The next step involved identification of top cargo categories and top EXIM

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players using PIVOT table functionality. The idea was to use the concept of Pareto efficiency (80/20

rule) to make the primary survey effective and efficient.

3. Step 3 – Primary Survey

The primary survey involved establishing contact and one-to-one meeting with top EXIM industry

players in the districts of Madurai, Theni, Tirunelveli, Virudhunagar and Kanyakumari. The idea was

to obtain first-hand feedback from the actual port users on their priorities and choices.

4. Step 4 – Detailed analysis of the feedback

This step involved quantifying the responses received during the primary survey from the EXIM

players. More importantly, the exercise involved correctly extrapolating the responses so received

to the entire population. The “Sample to Total Population Multiplier” was adopted for the same.

The multiplier is a numerical value which represents the ratio of the selected sample to the total

entire population. Two basic assumptions were made to correct the inherent errors of the multiplier

approach. Firstly for ‘multiplier more than two’, open cargo was taken at 50% as the sample is not

sufficiently representative of the total population. Secondly for ‘multiplier more than five’, open

cargo was taken as NIL as the sample is not representative of the total population and therefore

cannot be extrapolated to arrive at the open cargo figures.

5. Step 5 – Identifying the open cargo category, baseline figures and cargo forecasts

Based on above exercise the open cargo commodities which have the possibility for being imported

and exported from the proposed port of Thankassery were identified and baseline cargo figures

were established. The EXIM players are willing to divert their cargo through the port of Thankassery,

provided they achieve cost savings by undertaking such a step.

Commodity EXIM status Hinterland districts

Containerised baseline open figure (base year

2008-09)

Bulk / Break bulk

baseline open figure ( base year 2008-09)

in TEUs in Tonnes in Tonnes

Food / agricultural products & spices

Export Madurai, Kanyakumari

1,160 17,400

Textiles, yarns & fabrics

Export Madurai, Theni

1,520 22,800

Cement Import Madurai 1,067 16,000

Timber & wood Import Kanyakumari, Thirunelveli

128,000

Total 3,747 56,200 128,000

Table 10: Potential open cargo from Tamil Nadu hinterland

The inputs received from the EXIM players (of marbles and timber logs) which has resulted in the

inclusion as a potential cargo for the port of Thankassery is indicated below:

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Timber & wood

Sengottai in Tirunelveli district is the hub of timber saw mills and is almost equidistant from the port

of Thankassery and Tuticorin.

Sengottai alone imports around 1.2 lakhs of timber logs annually.

Given the proximity of Sengottai to Thankassery (almost 92kms), the possible diversion of timber

logs has been considered.

In addition, cargo for few of the timber importers from Nagercoil has also been considered as open

cargo.

Food / agri-products & spices

This category covers variety of food and agricultural products and spices as well. The main products

are maize, corn, chillies, onions, gherkins, papads, etc.

Concord Exports’ contribution to total food & agricultural products and spices exports from Madurai

district was 40% during the FY 2008-09. The port of choice for the Company depends on its

suppliers. The Company can consider using Kollam port provided the suppliers are ready to deliver

the goods at Thankassery port and the overall costs are lower vis-a-vis Tuticorin port.

Hence limited cargo is expected to be diverted to Thankassery port.

Cement

The major importers of cement from Madurai are S.S.N. Trading Company, Triumph Enterprises &

Investment Pvt Ltd, all companies managed by the same group. They together import 7,000 tonnes

of the total quantum.

Most of customers for the import consignment are based in Kanyakumari district of Tamil Nadu and

in Kerala state. And therefore the importers are keen about the prospects of using the Thankassery

port for their trade.

The matter of concern though would be the terrain. The presence of ghats can hinder the

movement of 40ft containers.

Textiles, yarns and fabrics

This category of exports from Madurai and Theni districts consists of cotton yarn, garments, fabrics,

made-ups, terry towels, etc.

There was a mixed response from the exporters in this category for use of the Thankassery port.

One of the major exporters (JVS Exports), though, has shown positivity for use of the Thankassery

port if they are able to realize cost benefits and if mother vessels berth at Thankassery. They

presently incur Rs. 3,000/- per truckload for transporting their good to Tuticorin port and any option

whereby they spend a lower amount is welcome.

Exporters in Theni district are skeptical of using the Thankassery port due to the difficult terrain

which they have to encounter on way to ports in Kerala.

Hence a modest estimate has been considered for diversion to Thankassery port.

3.7 Open cargo from primary and secondary hinterland The table depicts the summarized indicative base-line open cargo figures for the Thankassery port arrived from the previous sections

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Description Container Traffic Bulk / Break-bulk Cargo

In TEUs In Tonnes In Tonnes

Primary Hinterland ( Kerala)

Kollam 24,485 386,720

Thiruvanthapuram 975 13,220

Idukki & Pathanamthitha

192 2,909

Kottayam 150 2,866

Coastal movement ( Clay)

2,000 30,000

Import cargo ( newsprint / wastepaper)

440 5,280

Coastal movement ( Cement)

1,100,000

Coastal movement ( sand)

72,000

Import cargo ( finished ferilizers - Urea & Muriate of Potash)

125,000

Import cargo ( timber logs)

48,000

Indicative open cargo from Kerala ( primary) hinterland - A

28,243 440,995 1,345,000

Secondary Hinterland ( Tamil Nadu)

Export cargo 2,680 40,200

Import cargo 1,067 16,000 128,000

Indicative open cargo from Tamil Nadu ( secondary) hinterland - B

3,747 56,200 128,000

Total indicative open cargo from the identified hinterland of Kerala and Tamil Nadu ( A + B)

31,989 497,195 1,473,000

Table 11: Total open cargo from primary and secondary hinterland

The statistical validation of data to arrive at the likely estimate of traffic at Thankassery port has been

indicated in Annexure – 2.

3.8 Indicative traffic projections. In order to have a clear perception of the traffic projections, the results of the primary survey conducted

were tabulated. The tabulation was done on a drill down approach viz. the cargo was initially broadly

classified based on its origin i.e. from primary or secondary hinterland. The primary / secondary

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hinterland commodities were later further classified into import / export cargo and subsequently into

containerized and bulk / break bulk commodities. By undertaking such a drilled down approach, it would

be easy to understand the source of the cargo generation and facilitate in providing an easy overview of

the growth projections of the identified commodities.

Uniform growth rate has not been applied to the containerized cargo (for the purpose of traffic

forecasting), since each containerized commodity has its own peculiarity. In addition, the possibility of a

containerized commodity being diverted to Thankassery also depends on various regional factors and

the same has to be accounted for during the forecasting exercise.

For the determination of the projected traffic the following methodology was adopted:

As the first step the commodities identified by the process of primary survey were classified into

import / export / coastal cargo and subsequently into containerized and bulk / break bulk

commodities groups

The major factor in deciding the commodities that could be identified as cargo have already

been detailed in the previous sections.

Based on the trend analysis and the future expansion plans of the industries and the likely

increase in the development of industries, the growth rates for high, medium and low scenarios

of each of the cargo were identified. These growth rates are indicated in Annexure -3

The future growth of each commodity was analyzed based on its historical growth trends,

Central / State government’s assistance towards a particular commodity‘s production/ exports,

regional development which may have an effect (positive / negative) on the imports of a

particular commodity, competition from existing and upcoming ports in the region, etc.

The rationale for the cargo growth for the major potential commodities is derived in Annexure -4

and the consolidated traffic projections under the low, medium and high scenario is indicated in the

subsequent sections.

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3.8.1 Low traffic scenario

Table 12: Consolidated traffic growth in tonnes ( Low growth scenario)

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Table 13: Containerised traffic growth in TEUs (Low growth scenario)

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3.8.2 Medium traffic scenario

Table 14: Consolidated traffic growth in tonnes (medium growth scenario)

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Table 15: Containerised traffic growth in TEUs (medium growth scenario)

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3.8.3 High Traffic Scenario

Table 16: Consolidated traffic growth in tonnes (high growth scenario)

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Table 17: Containerised traffic growth in TEUs (high growth scenario)

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3.8.4 Summary of the traffic projections

Total traffic (both bulk and containerized) in '000 Tonnes

2015 2020 2025 2030 2035 2040

Low 2,024 2,215 2,445 2,695 2,966 3,275

Medium 2,207 2,718 3,388 4,255 5,343 6,806

High 2,306 3,073 4,140 5,596 7,505 10,281

Only containerized traffic in TEUs

2015 2020 2025 2030 2035 2040

Low 37,122 40,429 44,992 50,298 56,548 63,773

Medium 43,568 51,863 62,907 77,173 95,364 118,300

High 44,332 55,879 70,574 89,208 115,293 149,651

Based on the detailed analysis of the macro and micro economic scenarios, the medium growth scenario

has been decided as the base case for cargo. The entire port planning subsequently has been

undertaken considering the above mentioned scenario of traffic. (Please see chapter 5 on port planning

for details).

3.8.5 Comparison between total cost of transporting containers to

Cochin by road and through coastal shipping

Comparative analysis of transportation costs of containers by road to Cochin Port and likely costs

through the proposed port at Thankassery to Cochin port forms an important part of the feasibility

analysis. From a generalised cost perspective, we have considered the following broad level costs:

- Inland Transport Costs

- Port Charges

- Sea Transport Costs

Results of the analysis along with explanatory notes have been given below.

Kollam hinterland

In Rupees Sr. No

Activity Cochin Port by

Road

Activity Cochin port via proposed

port at Kollam

1 Road freight movement till Cochin

11,000 Road freight movement till Kollam

2,000

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Sr. No

Activity Cochin Port by

Road

Activity Cochin port via proposed

port at Kollam

2 CHA Charges / customs clearance at Cochin Port

1,500 CHA Charges / customs clearance at Kollam

1,500

3 Terminal Handling Charges at Cochin Port

4,955 Terminal Handling Charges at Kollam

2,500

4 Coastal Sea Freight - Coastal Sea Freight (Kollam- Cochin)

4,000

5 Transshipment charges - Transshipment charges

3,309

6 Documentation charges 1,500 Documentation charges

1,500

7 Storage charges ( if required)

2,000 Storage charges ( if required)

2,000

8 Total 20,955 Total 16,809

Table 18: Comparative cost of exporting One TEU from Kollam to Cochin port by Road vis-a-vis though

the proposed Thankassery (Kollam) cargo terminal

Average Road Transport Cost of a TEU from factory premises to Cochin Port obtained from industry sources. In case of current road movement to Cochin Port, the rates mentioned are the to & fro charges incurred by the transporters i.e. the empty container movement from container yard at Cochin Port to Kollam and the loaded container movement from the factory at Kollam to Cochin Port. For coastal movement from Kollam-Cochin Port, empty containers are assumed to be available in Kollam.

Total logistics cost from Kollam to Cochin Port per TEU = Rs. 20,955

Total logistics cost Kollam - Thankassery (road) and Kollam - Cochin (coastal) = Rs.16,809

Potential savings per TEU = Rs.4,146

Trivandrum hinterland

In Rupees

Sr. No

Activity Cochin Port by Road

Activity Cochin port via proposed

port at Kollam

1 Road freight movement till Cochin

14,500 Road freight movement till Trivandrum

5,082

2 CHA Charges / customs clearance at Cochin

1,500 CHA Charges / customs clearance at Jaigad

1,500

3 Terminal Handling Charges at Cochin Port

4,955 Terminal Handling Charges at Kollam

2,500

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Sr. No

Activity Cochin Port by Road

Activity Cochin port via proposed

port at Kollam

4 Coastal Sea Freight - Coastal Sea Freight (Kollam- Cochin)

4,000

5 Transhipment charges - Transhipment charges

3,309

6 Documentation charges 1,500 Documentation charges

1,500

7 Storage charges ( if required)

2,000 Storage charges ( if required)

2,000

8 Total 24,455 Total 19,891

Table 19: Comparative cost of exporting One TEU from Trivandrum to Cochin port by Road vis-a-vis

though the proposed Thankassery (Kollam) cargo terminal

Average Road Transport Cost of a TEU from factory premises to Cochin Port obtained from industry sources. In case of current road movement to Cochin Port, the rates mentioned are the to & fro charges incurred by the transporters i.e. the empty container movement from container yard at Cochin Port to Trivandrum and the loaded container movement from the factory at Trivandrum to Cochin Port. For coastal movement from Kollam-Cochin Port, empty containers are assumed to be available in Kollam.

Total logistics cost from Kollam to Cochin Port per TEU = Rs. 24,455

Total logistics cost Kollam - Thankassery (road) and Kollam - Cochin (coastal) = Rs.19,891

Potential savings per TEU = Rs.4,564

Coastal movement from Gujarat to Kerala

In Rupees

SSr. No

Activity Cochin Port by Road

Activity Cochin port via proposed

port at Kollam

1 Coastal shipment charges from Mundra to Cochin

38,000 Coastal shipment charges from Mundra to Kollam

40,000

2 CHA Charges / customs clearance at Cochin Port

1,500 CHA Charges / customs clearance at Thankassery

1,500

3 Terminal Handling Charges at Cochin Port

4,955 Terminal Handling Charges at Thankassery Port

2,500

4 Documentation charges 1,500 Documentation charges 1,500

5 Storage charges 2,000 Storage charges 2,000

6 Inland transportation to Inland transportation

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SSr. No

Activity Cochin Port by Road

Activity Cochin port via proposed

port at Kollam

to

6-a Trivandrum 14,500 Trivandrum 5,082

6-b Kollam 11,000 Kollam 2,000

7 Total Total

7-a Trivandrum 62,455 Trivandrum 52,582

7-b Kollam 58,955 Kollam 49,500

Table 20: Comparative cost of exporting One TEU from Trivandrum to Cochin port by Road vis-a-vis though the proposed Thankassery (Kollam)

The coastal shipment charges from Gujarat to Kerala have been obtained from industry sources.

Total logistics cost per TEU from Gujarat to Trivandrum hinterland via

coastal movement through Cochin Port

: Rs. 62,455

Total logistics cost per TEU from Gujarat to Trivandrum hinterland via

coastal movement through Thankassery (Kollam) Port

: Rs. 52,582

Potential savings per TEU : Rs. 9,873

Total logistics cost per TEU from Gujarat to Kollam hinterland via coastal

movement through Cochin Port

: Rs. 58,955

Total logistics cost per TEU from Gujarat to Kollam hinterland via coastal

movement through Thankassery (Kollam) Port

: Rs. 49,500

Potential savings per TEU : Rs. 9,455

Accordingly, for EXIM related shipments which are presently moving from Kollam and Trivandrum region

to Cochin, Thankassery port can be positioned as an ideal feeder port and can save the shipper the costs

associated with the inland transportation to the tune of Rs. 4,500 per TEU. For the coastal cargo

commodities flowing from Gujarat to Kerala, Thankassery port can serve as a gateway port for the

commodities meant for Southern Kerala , which would result in an indicative savings of around Rs.

9,500/-

Thankassery port can hence facilitate in reducing the overall logistics cost associated with the

movement of cargo and can be positioned as a feeder / coastal port complementing the operations of

the existing ports.

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4. Site investigations

4.1 Geographical setting Thankassery is situated in Kollam District about 70 km north of Thiruvananthapuram and 150 km south

of Kochi (Latitude of 8o 52’ 35” N and Longitude of 76o 34’ E). The bay lying east of the Thankassery point

is the site for the Port. The comparatively deeper hydrography of the Thankassery area along with the

flourishing economic activity the old Kollam town made Thankassery an important Port along the west

coast of India in older times. The land side of the Port area is within the limits of Kollam Corporation,

which has an area of 57.31 km2 with a population of 361,441 (Census 2001) in 78,182 households.

Geographically Kollam represents a sample slice of what Kerala is. The west of Kollam is a long wide

coastline facing the Arabian Sea, while the eastern edge of Kollam district is hilly, and gradually merges

into the fringes of Western Ghats. The plane midland lies between the western coastal strip and the hilly

eastern region. Kollam town, where a large majority of the cashew manufacturing units of Kerala are

situated, is only about 7 kms away from Thankassery port.

Figure 4 : Overview of the Kollam Port area

There are two breakwater structures to facilitate port operations. The seaward breakwater is 2100

meters in length and the leeward breakwater is 500 meters. The port is also equipped with a 144 ft. light

house built in 1902. The Thankassery light house is a major tourist attraction.

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Prolific fishing activity exists in the vicinity including the east shore of the calm basin. There are two

auction houses located on the shore. There is good amount of boating / fishing near the sea shore closer

to the entrance channel also. This will necessitate development plans to accommodate the fishing

activity so that the fishing community can co-exist with port operations.

There are quite a few dwelling units on the sea shore. This area is earmarked for acquisition, which may

be possible without much of resistance as plans are afoot to shift the inhabitants to nearby apartments

as part of the Tsunami Rehabilitation Programme. The Port is outside the normal path of the tropical

cyclones and hence a “Safe Port”. There has been no history of “anchor dragging” even in foul weather.

4.2 Land The total land available in the port complex is about 42,400 sq.m (10.6 acres), which has been utilized

for various activities and utilities as given below

Berthing area - 2064 sq.m

Loading / Unloading area - 2990 sq.m

Storage area - 20,220 sq.m

Building and utilities - 629 sq.m

Internal roads and miscellaneous areas - 16,497 sq.m

4.3 Connectivity

4.3.1 Roads

The Kollam district is well connected to other parts of Kerala and India through the NH-47, NH-220 and

NH-208. The National Highway 47 covers a distance of 57.4 km in the district and is only 2kms from the

Thankassery port. The National Highways NH-208 (Kollam - Shencottai) and NH 220 (Kollam - Theni)

originate from Kollam.

Figure 5 : Kollam district road network

Source : Maps of India

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The State Highways namely, Main Central Road, Kollam-Shencottah Road and Punalur-Pala-

Muvattupuzha (Main Eastern Highway) with a total length of 266.52 kms also network the district. The

double-lane coastal road from Thankassery to Vadi is in progress and shall run parallel to the sea shore.

In terms of the connectivity with the Thankassery port, the following four options exists –

1. From Port gate to Althnamoodu junction and which goes to Cochin

2. From Port gate to Beach and then to Trivandrum. From the beach, there is a road proposal coming

up , the road is proposed as part of the coastal road connectivity.

3. From Port gate via Kochuplamoodu junction and then to Police camp. From the Police camp Jn to

NH-47 to Trivandrum .

4. From Port gate to Kochuplamoodu junction to Chinnakada round about (which is the Main city

centre for Kollam). The road will be for Trivandrum / Cochin and Tamil Nadu via Thankasei

The detailed analysis of the road connectivity options as surveyed during the road profiling survey is

indicated in section 5.13.

4.3.2 Rail

Kollam is an important railhead of the

Southern Railways. The Kollam railway

station is considered to be one of the

biggest railway stations in Kerala state after

Shornur and Palakkad junctions. The district

is covered by 132 km of railway tracks, of

which 51 km are broad gauge and 81 km

metre gauge.

The Trivandrum-Ernakulam line, which goes

via Kottayam and Alappuzha, passes

through Kollam. Kollam is the terminal

junction of Madras-Egmore-Kollam metre

gauge line.

Figure 6 : Kollam district road network

Source : Maps of India

The metre gauge track is being converted to broad gauge under project Unigauge and is presently

closed. The new BG line is expected to open during the year. As regards the Thankassery port, the

shortest distance between Railway lane and shoreline is 1 Km. However there are lot of buildings and no

vacant land.

4.3.3 Inland waterways

Kollam is well-connected through waterways with other parts of Kerala and this stands to the advantage

of the Thankassery port. The Centre has declared the Kollam-Kottapuram stretch of West Coast Canal,

along with Champakara and Udyogmandal Canals (205 km) in Kerala, as National Waterway No 3 (NW3).

The extension of the NW3 to Kovalam and further to Colachel is under its active consideration. The

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National Waterway standard will require acquisition of land to widen the canal at some places and

dredging and rehabilitation of cross structures like bridges.

Figure 7 : The existing water canal and rail line near Thankassery port

Source: Atlas Survey Engineering System , Kollam

The detailed route profile map to the Thankassery port is enclosed as Annexure. - 5

4.3.4 Air connectivity

Kollam district at the moment does not have direct air connectivity. The Trivandrum International

Airport is the nearest airport and is approximately 65 kms away from the Thankassery port.

4.4 Topography Laterite formations extending to the sea are noticed at the Thankassery and nearby areas

predominantly on the northern side. A shallow stretch of rocky formation extending southwards as a

groyne is also reported. In general, sand with shell contents is noticed above the hard stratum, with

slight clay content. The general topography of Kollam Corporation area is flat with a moderate slope and

the altitude varies from 0 to 10 m above Mean Sea Level (MSL). The gradually sloping terrain towards

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west favors natural drainage. The coastal plain below the 7.5 m contour and is characterized by marine

landforms of beach ridges, beaches, swamps and lagoons. The topography and the contour map of the

port area is enclosed as Annexure 6.

4.5 Bathymetry

The Hydrography department of the Government of Kerala has been conducting bathymetric surveys at the area covering approach channel and entrance channel area including the basin inside the harbour regularly. Based on the details available in the bathymetric charts of Oct 2007, it is found that minimum bed level of 6.1 is available in front of the wharf, basin area, entrance channel and approach channel. A comparison of the depths available as per 2000 chart and the charts of the earlier years reveals no significant siltation in the operational areas .

Copy of the bathymetric chart dated 13/10/2007 is enclosed as an Annexure 7

4.6 Geo technical conditions The borehole details made available by Harbour Engineering Department based on actual bore results at

pile locations number 3 and 15 of cargo wharf are given in Annexure 8. The summarized details are as

follows: -

Borehole data at Pile number 3

The bed level is at -7.50 m and the strata from sea bed for a depth of 11.0 m consists of fine sand

with very high SPT (Standard Penetration Test) N values varying from 35 to 70. The strata below top

sand layer of about 2.0 m thickness consist of sand -clay mixture.

The strata below consists of soft to medium clay with SPT (N) values varying from 4 to 10 and the

clay layer continues upto -37.00 m, with thickness of 17.00 m. The founding strata consists of white

laterite with N values in excess of 112 with thickness of about 3.00 m.

Borehole data at pile no 15

The soil stratification at pile location number 5 is almost same as that observed at pile location

number 3 with minor variation in thickness of sand / sand clay / clay layers.

4.7 Tide and wave data

4.7.1 Tides

Based on the observed details regarding tide levels, collected from the Hydrography Office at Kollam and the secondary data , the tide levels at Kollam are expected to be as under –

MHHW - +1.30 m

MLHW - +1.20 m

MSL - +0.90 m

MHLW - +0.80 m

MLLW - +0.40 m This is with reference to Chart Datum 00

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4.7.2 Wave

The coastal waters off Thankassery are influenced by waves approaching from the North West, with

average wave heights during fair weather season (September to May) normally less than 1m.

Predominant waves during Southwest monsoon are from South West to West, 50% of which are

between 1.5m to 2.5m and 30% between 2.5m and 4.6m. With the Arabian Sea becoming rough during

monsoons, the off-shore wave heights also occasionally reach between 5m & 6m with corresponding

wave periods of 8-10 sec.

Due to the construction of break water, of 2.1 km length , the wave effect from South West direction

during monsoons will be reduced considerably and the wave height inside the harbour will be less than

0 .3 m normally and 0.5 m occasionally in extreme weather condition. Therefore near tranquil conditions

are considered inside the harbour and waves will not have any significant influence on berthing and

loading / unloading operations at the berths.

4.7.3 Currents

Since near tranquil conditions exist in the harbour, the influence of current is negligible.

4.8 Environmental data The section below depicts an overview of the environmental site conditions. A Rapid Environmental

Impact assessment undertaken by Centre for Environment and Development, Trivandrum and the

report of their findings is enclosed as Annexure 9.

4.8.1 Physical environment

Climate

The climate of the region is tropical humid, with an oppressive summer and plentiful seasonal rainfall.

The hot season, lasting from March to May, is followed by the south west monsoon from June to

September. The north east monsoon occurs from October to November.

The rest of the year is generally dry. The average annual atmospheric temperature of the area is 27o C,

and the annual temperature range is 27.8o to 33o C as a maximum and a range of 22.3 to 26.1o C as a

minimum. The South-West monsoon provides heavy and reliable rainfall with the average annual rainfall

about 3100 mm, within an average of 115 rainy days. The monthly mean value of relative humidity

varies from 75-96% in the morning (08:30 hrs) to 65-91% in the afternoon (17:30 hrs). Winds from North

West prevail during November to January and South East winds during May to August. Excessive rain

during June to August causes frequent floods in the rivers and canals in the area, submerging low-lying

areas.

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Water environment

The major source of drinking water is through piped distribution network of Kerala Water Authority (KWA) and from wells. The pipe network suffers from heavy leakages due to aged piping. The network’s inadequate carrying capacity coupled with instances of unauthorized connections put an unwarranted strain on the system. The present per capita availability of water to Kollam is about 40 lpcd.

Ashtamudi Lake, the second largest wetland of Kerala recognized under Ramsar International Treaty for

Wetland Protection, is the nearest surface water source about 5 km from the Port location. It is a

brackish water lake connected to Lakshadweep Sea and the movement of water is influenced by the

tidal action.

Ground water in the Corporation area occurs under confined and semi confined conditions. The course,

porous and permeable layers of laterite form aquifer system. The main recharge to groundwater takes

place from precipitation. There are number of open wells exists around the site and these open wells

are mainly used for domestic purpose. Depth of ground water level ranges between 1.50m to 6.20m

below the ground level. The directional flow of ground water is mainly from west to east.

Air environment

The air environment of Thankassery region is very clean and pleasant because there are not many

influencing factors. The number of industries as well as that of vehicles is considerably small. It is found

that Sulphur dioxide (SO2), Oxides of Nitrogen (NOx) and Suspended Particulate Matter (SPM) levels of

the City is much below the stipulated limit.

Noise

The major source of sound pollution in the city is the vehicles and indiscriminate use of loud speakers.

The sound level was found to be below the limits prescribed for Commercial category all over the city

area. Ambient noise level in the Kollam city region is relatively higher than the limits prescribed for

residential area by the Central Pollution Control Board.

Land environment

The study area consists of mainly three land use types – Residential built up land, Coconut plantations,

and areas with coconut and other mixed crops, with a few vacant lands. There are some patches of

vegetable cultivated land. Major use of urban land is classified under residential use, which includes not

only the area occupied by the houses, but also the coconut gardens around the house as well.

4.8.2 Ecological resources

Coastal environment

The 590km length Kerala coast faces the Arabian Sea. The coastline of Kerala is more or less straight

trending in NNW-SSE direction from north till the Thankassery headland near Kollam. The coastline

orientation south of Thankassery is in the NW-SE direction. The offshore continental shelf bathymetry is

steeper to the south.

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Terrestrial environment

No forest, wild life sanctuaries or other environmentally sensitive area is near to the project site and no

rare or endangered species have been reported from the region. No mangrove or wet land or turtle

nesting sites is observed at or near to the site. Cultivated plants like Cocos nucifera, Mangifera indica,

Thespesia populnea, Tamarindus indica, Artocarpus heterophyllus, Casuarina equisitifolia, etc., are very

common around the site. Although Kollam retains extensive backwater systems its wetlands have been

extensively damaged by reclamation for coconut growing and foreshore developments.

Consequently, Kollam has the lowest proportion of mangroves in the State’s dwindling wetland

resources. No endangered or endemic plant species were recorded in the region. The project site is not

situated within or adjacent to any cultural heritage sites, protected areas, buffer zones of protected

areas, or special areas for protecting biodiversity.

4.8.3 Socio-economic environment

The main activity in the region is fisheries and significant income is generated by fishing activities. One-

third of the State's fish catch is from Kollam region. An assessment of city economic development and

urban growth indicates a decadal population growth rate of 4.45 percent, which is lower than the

State’s urban population growth rate (1991-2001).

To evaluate the socio-economic aspects of the local fishing community, informal consultations were

carried out covering all the fishermen hamlets in the area. The survey results indicate that the majority

of local community strongly favors the construction of a Port. A few people expressed their

apprehensions over sharing of the resources of the fishing harbour.

Tourism

Thankassery region is aesthetically beautiful and culturally rich with few famous churches. Thankassery

is a place of historical importance situated 5 km away from Kollam town. The Churches here are pretty

old, having been established in the 18th century. The vast silent stretch of windy beach shore is an

attraction of Thankassery region. The chief attraction of the place is the light house, built in 1902. The

144 ft. light house stands as a sentinel, warning seamen of the treacherous reefs of Thankassery.

Thankassery was an enclave of the Portuguese, Dutch and British in succession and the remnants of the

Portuguese and Dutch forts still exist. The Portuguese fort is believed to be built in 1517 and only one

wall of this fort remains now. Tourists visiting Kollam are often attracted towards the beaches. The

average tourist arrivals are to the tune of 85,000 domestic tourists and 15,000 foreign tourists (Source:

District Tourism Promotion Council, Kollam).

4.8.4 Coastal Regulation Zone (CRZ)

Restrictions were imposed on developmental activities on coastal areas by introducing the Coastal Regulation Zone Notification in 1991 under the authority of the Environment (Protection) Act 1986. Coastal stretches of sea between the Low Tide Lines and High Tide Lines and up to 500 meters on the landward side from High Tide line and up to 50 meters from the bank or width of the creek, river or backwater whichever is less will come under the regulated zone. For imposing restrictions, the coastal area is classified into four zones viz:

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1. CRZ I – Areas that are ecologically sensitive and in the area between High Tide Line and Low Tide Line;

2. CRZ II – Areas that have already been developed up to or close to the shoreline; 3. CRZ III – Areas that are relatively undisturbed which does not fall under CRZ I or CRZ II; and 4. CRZ IV – Coastal stretches in the Andaman & Nicobar, Lakshadweep and small islands.

According to the notification, Coastal Zone Management Plan for Kerala was prepared demarcating the Coastal Regulation Zone in the State, which was approved in 1996. Under the approved Coastal Zone Management Plan, coastal stretches of all the Corporations of the State fall under CRZ II and developments in CRZs require the approval of the Central / State Coastal Zone Management Authority.

4.8.5 Environmental risk assessment and management plan

Potential adverse environmental impacts during construction and operation phase were predicted based on available information. An Environment Management Plan (EMP) aiming to minimize, and wherever possible eliminate, the damaging effects of Port development were developed.

Sr.

No.

Environmental Attributes Project Activity Nature of Impact

1. Landscape Land Reclamation

Construction work

Transportation

Minor degradation

Minor degradation

Minor degradation

2. Ground water resource Civil works No major effect

3. Water Quality Waste Disposal

Oil Leakage

Major impact

Major impact, but

infrequent

4. Air Quality Transportation

Civil Works

Unpleasant Smell of fish

Temporary effect

Temporary effect

Permanent effect

5. Noise Quality Dredging & Reclamation

Civil Works

Transportation

Working Phase

Temporary impact

Temporary impact

Temporary impact

Permanent impact

6. Natural Vegetation Site Clearing

Permanent impact, but not

significant

7. Natural Fauna Construction works

Site clearing

Permanent impact, minor

Permanent impact, minor

8. Transportation Increased access for

transportation of Port

Degradation due to

emission of exhaust from

transportation vehicles and

vessels

10. Economy Increased economic

activities

Financial status of the local

people as well as

government will improve

11. Tourism During the construction

& operational phase

Negative, but minor

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Sr.

No.

Environmental Attributes Project Activity Nature of Impact

12. Employment During the construction

& operational phase

Positive

13. Aesthetic During the construction

& operational phase

Will alter the scenic beauty

14. Hazard During the construction

& operational phase

Chances of fire and

occupational hazards

Table 21: Project activities and its impacts

Source: Centre for Environment and Development, Trivandrum

Some of the mitigation measures planned aimed to minimize, and wherever possible eliminate, the

damaging effects of development have been indicated below:

1. Green Buffer Zones, wherever possible, should be encouraged in and around the port area.

2. Dredging and reclamation operations should be undertaken only where it can be conclusively

proved that these are required for operation purposes related to the activities permissible under

Coastal Regulation Zone Notification.

3. Best practicable technology and operating methods should be used for dredging / reclamation to

minimise adverse environmental impact.

4. Screening of the pollutants in the harbour waters should be undertaken and periodical reports and

water quality parameters should be forwarded to the concerned State Pollution Control

Board/Committee at least once in six months.

5. Some special arrangements wherever necessary for dusty cargo can be made to avoid pollution.

4.9 Utilities

4.9.1 Power

The Kallada hydroelectric station, situated in Kollam district, has the capacity to generate 15.00 MW

power. The power supply in Kollam district is facilitated through a network of substations of varying

capacities. The extensive network of sub-stations in Kollam district ensures availability of ample quality

power to the all locations in the district. The listing of the same as on 31.03.2008 is mentioned

hereunder:

Sr. No Name of substation Voltage level

1. Edamon 220 KV

2. Kundara 220 KV

3. Ambalappuram 110 KV

4. Kavanadu 110 KV

5. Kottarakkara 110 KV

6. Kottiyam 110 KV

7. Punalur 110 KV

8. Sasthamcotta 110 KV

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Sr. No Name of substation Voltage level

9. Ayathil 66 KV

10. Ayoor 66 KV

11. Chavara 66 KV

12. Karunagappally 66 KV

13. Parippally 66 KV

14. Pathanapuram 66 KV

15. Chengamanadu 33 KV

16. Ezhukone 33 KV

17. Kadackal 33 KV

Table 22: Sub-station network in Kollam district

Source : http://www.kseboard.com/generation_frame.htm

4.9.2 Water

Water supply is the prerogative of the Kerala Water Authority. Water supply to the entire Kollam district

is met by purifying the water from the Sasthamkotta Lake. The lake is located at a distance of 30 kms

and has a capacity to hold 22390 million litres of water. It serves as the source of drinking water for half

a million people of Kollam district. The source of water is from the underground sprouts.

The Sasthamkotta Lake, is a large freshwater lake in Kerala. The lake is surrounded on three sides by

hills, and on the south side a bund separates the lake from the neighboring rice fields. The lake was

designated a wetland of international importance under the Ramsar Convention in November 2002.

4.9.3 Telecommunications

The Bharat Sanchar Nigam Limited is the major telecom facilitator in the district. The service provided

includes Basic Wired Land line telephones with all phone plus services, fixed wireless telephone,

Wireless loop with limited mobility, Cellular mobile services, intelligent network, with several services

like the India Telephone card, Electronic PABX & Telex/Telegraph services.

In addition to BSNL, Reliance Infocom also provides WLL service in the district. Cellular operators, viz.

BPL Mobile, Escotel, AirTel, etc also operate in the district.

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5. Port planning

5.1 Introduction

A port layout defines the physical location of the main facilities required to effectively handle the port

traffic. Hence flexibility should be built in for the port layout as much as possible such that the port can

accommodate future changes in the cargo and the new development opportunities.

As Thankassery port is already a planned port, the facilities created therein are evaluated on the normal

parameters of port planning and are presented here.

5.2 History of the port operations Kollam is one of the oldest ports in the country, the history of which in all probability dates back to as

early as 8th century AD or even before. The Chinese traders were one of the oldest foreign communities

to settle in Kollam. That was the period when Kollam evolved as a major trade center (of spices) and an

important port along the Malabar coast.

Popularly referred to as “Kurakkeni Kollam” in classical literature, it is considered by Keralites as the

greatest boon of nature. It is outside the normal path of the tropical cyclones and hence a “Safe Port”.

This ancient Port was very active up to 1970. Soon, thereafter, port activities and cargo operations were

shifted to the fishing cum cargo

harbor at Neendakara. However,

thanks to the recent

development initiatives of the

Kerala Government, Kollam port

is now receiving and handling

cargo vessels, although on a very

small scale. The newly-

commissioned Kollam port

received its first cargo vessel, MV

Anakuri, on June 16, 2009. It

carried sand and gravel, meant

for construction activity, from

Kollam to Male.

Figure 8 : Loading / Unloading operations for MV Anakuri

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5.3 Existing Port Facilities The existing facilities at Kollam port include a wharf, breakwater, godowns, storage yards and other port

infrastructure like barges, forklift, tug, etc. The

wharf is 177 meters long (inclusive of the extension,

which was completed in early March 2010) and the

draft is around 6.3 meters. The entrance channel is

350 meters wide and the draft at the entrance is 11

meters. The basin area is approximately 100

hectares, with depth which varies between 4 meters

to 10 meters. The port presently has an area of 10

acres which includes two godowns of 1450 sq.mts.

each, a concrete yard with an area of 16000 sq.mts.

and a 3 acre yard which is yet to be developed.

Additionally, work is under progress for

development of two transit sheds, water tank, and

ground level sump for water supply scheme. The

detailed port layout of the existing facilities is indicated in Annexure - 9

5.4 Planning methodology For the development of the port layout from a long term perspective, the major parameters to be

looked at are:

1. Site and marine conditions which involve:

Topography

Bathymetry

Geotechnical conditions

Marine conditions such as wind, wave and currents

Coastal morphology

Littoral transport

Hinterland connectivity

Physical constraints and opportunities

2. Port facility requirements are:

Berth requirements

Governing vessel size

Storage area requirements

Requirements of dredging

Port craft

Navigation aids

3. Criteria for planning involves:

Marine operational criteria

Tranquility requirements

Vessel turning circle

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Port access channel

Deck elevation

5.5 Strategy for project planning In a typical PPP port related project, the private developer is required to invest a substantial amount of

time and resources in establishing the infrastructure for commencing port operations, while the

government provides the waterfront and other hand holding related support. In this respect, the port of

Thankassery is very much unique, since the State Government has already established facilities at the

port.

This would provide the private developer a ready-made infrastructure set-up which would facilitate him

to commence commercial operations from Day 1. Accordingly the envisaged port planning focuses on

the optimum utilization of the existing facilities to its full capacity. It is only when the capacity of the

existing facilities is fully utilized that the private developer would be required to plan and install

additional infrastructure for catering to the cargo traffic.

The referred strategy would be a win-win situation to both the private developer as well as the state

government. For the private developer, due to the initial low investments required to augment the

existing facilities, his risks to that extent would substantially be reduced. This in turn would spur many

professional entities to bid for managing and operating the port facilitating the state government in

selecting the most competent private developer.

Accordingly the port planning exercise had been divided into the following phases -

Phase 1 – The planning objective of the referred phase would be to utilize the existing facilities to its

full capacity. In this regards, the private developer would be required to augment the existing

infrastructure by:

Providing mechanical material handling equipment / cranes etc

Strengthening existing facilities

Facilitating connectivity (with active support of the state government)

Improving the storage requirements

Managing the port operations

Phase 2 – When the cargo volumes exceed the capacity of the existing infrastructure, a separate

wharf is proposed in the port area towards North/East direction.

5.6 Port layout

5.6.1 Additional infrastructure in Phase I

The total length of the existing wharf (inclusive of the extension) is now 177 m and the width is 12 m.

The wharf has available draught of 6.30 m but the structure is designed for a draught of 10.00 m after

dredging, where by vessels of size upto 15,000 DWT can be directly berthed at wharf.

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As per details made available, the wharf structure is designed for a uniformly distributed load of 3.50

tonne per square meter and no other loading has been considered towards material handling cranes /

equipments operating on the wharf deck.

The wharf is protected from wave effect by seaward breakwater of 2100 m long and leeward

breakwater of 500 m long. Considering cargo to be handled in initial years consisting of containers and

bulk / break bulk in non containers common material handling machinery in the form of mobile cranes

are considered to handle all types of cargo.

As the deck is not designed for these crane loads, it is proposed to increase the deck slab thickness of

entire wharf deck, with extension by about 8.00 m towards land. The increase in vertical loads on piles

will be marginal and within the safe capacity of pile. The capacity of existing wharf including extension

with above strengthening would be utilized to the maximum extent possible.

A container stocking yard utilizing area marked for container yard for storage of TEUS is provided. The

installed capacity of wharf with the above strengthening would be around 3.60 million tonnes per

annum and actual capacity utilized would be 2.70 million tonnes per annum with operating efficiency of

75%. Considering above, the phase II would be required to be commissioned by year 2020 when cargo

volumes exceed 2.70 million Tonnes per annum.

5.6.2 Infrastructure in Phase II

Phase II is planned to be commissioned by year 2020. A separate wharf of dimensions 200.0 m long X

20.0 m wide is proposed in the port area towards North/East direction which will be mainly for handling

container cargo with higher capacity cranes than those considered in Phase I with increase in cargo

handling rate by about 25 to 30%.

In this phase , around 20 hectares of land has been earmarked for future extension . This is proposed to

be developed by reclamation upto deck level of wharf with shore protection using rubble bund using of

required sizes of stones as per the design. The area so developed will be utilized for container / bulk/

break bulk/ other cargo stored separately with provision for both open / covered storage as per the

need.

After commission of new wharf mainly for containerized cargo, the existing wharf will be used for

handling bulk and other cargo of comparatively less weight. After addition of second wharf, the installed

capacity would get increased to about 7.60 million tonnes per annum and actual capacity utilization

would be about 5.7 million tonnes per annum with operational efficiency of 75%.

The above handling capacity are considering proper road network for smooth evacuation of cargo from

port to the destination as well as to bringing cargo from other destinations without any kind of hold ups

in movement of vehicular traffic.

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Figure 9 : Indicative port planning layout

The detailed port layout drawing has been indicated as part of Annexure 10

5.7 Port facility requirements

5.7.1 Governing vessel size

The Thankassery port is planned considering dredging in future upto -10.0 m level thereby allowing the

vessels upto 9 m draft at all tides. Considering this the vessels of size upto 15,000 dwt can be

maneuvered inside the harbour and berth at the existing wharf structure.

At present the depths available at wharfs and inside the harbour are about -6.5 m to -7.0 m, which will

allow vessels having draft upto 5.5 to 6 m to operate in the harbour. This will allow vessels of size 6,000

to 7,000 dwt to berth at all tides.

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5.7.2 Berths availability and requirements

As indicated in the previous section, the size of berth in Phase I is 177 m with a width of around 12 m.

The installed capacity of wharf with the above strengthening would be around 3.60 million tonnes per

annum and actual capacity utilized would be 2.7 million tonnes per annum with operating efficiency of

75%.

In Phase II, a separate wharf 200.0 m long X 20.0 m wide is proposed in the port area towards

North/East direction.

5.7.3 Dredged depth at berths

At present the depth available in front of the existing wharf is -6.5 to -7.0 m. However the wharf is

designed for a dredged bed level of -10.0 m.

5.8 Planning criteria

5.8.1 Tranquility requirements

The existing harbour is a fair-weather, protected from the influence of waves by the two break waters

and near tranquil conditions exists in the harbour. Therefore no further tranquility aspects are required

to be considered.

5.8.2 Marine operational criteria

The port will be a direct berthing port for coastal vessels and ships of size ranging from 6,000 DWT to

15,000 DWT. The maneuvering inside the port area will be done using tugs of required bollard pull which

may be between 12 tonnes to 20 tonnes. For smaller vessels the fishing trawlers operating in the port

area could be used instead of a tug for pilotage.

5.8.3 Turning circle

The basin inside the harbour covering an area of 1250 m by 800 m having a depth of 6.5 m is sufficient

for turning of the vessels inside the harbour. Therefore no separate turning circle is required to be

provided.

5.8.4 Storage area levels and berth elevation

As the entire port areas as well as the existing approach roads are at uniform elevation, it is proposed to

keep the elevation for entire port complex as well as storage areas at the existing elevation of wharf. In

view of proposed strengthening of the existing wharf by providing additional thickness of slab of 0.7 to 1

m, the other areas and new wharf level will be matched by sloping run with gradual gradient.

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5.9 Planning consideration

5.9.1 Width of channel

Considering the vessel size contemplated, the existing width of the entrance channel is more than

adequate (350 m wide).

5.9.2 Depth of channel

The depth of channel at present is 6.5 meter, which will be increased to -10.0 m if dredging is required

to be carried out in berthing areas in future for bigger size vessels.

5.10 Navigational aids Considering the width of entrance channel defined by the breakwaters and the light house , no special

navigational aids are necessary except the marker buoys for defining the navigational channel in the

centre of entrance channel and to be further extended in the approach channel.

5.11 Cargo handling equipment In Phase- 1, the equipments for cargo handling are considered common for both general cargo, bulk

cargo and containerized cargo in the form of mobile cranes or fixed cranes of 20 tonnes capacity with a

radius of about 20 m . For Phase -2, while the facilities provided in Phase -1 will continue to be used on

existing wharf. The new container wharf will be provided with container handling cranes moving on rails

with a capacity of 25 tonnes at a radius of 25 to 30 m.

5.12 Land requirements As per the land use plan given in Annexure 10, the existing land area including developed land by

reclamation works out to about 60 acres which is considered sufficient for various activities of the ports

and the storage requirements of Phase 1 and Phase 2 with provision for additional requirements in the

future.

5.13 Constrains in port operations Traffic considerations

Based on the detailed traffic study conducted and the cargo estimates in low, medium and high

scenarios the maximum demand expected at Kollam (Thankassery) port are as under –

In Million Tonnes

2015 2020 2025 2030 2035 2040

Low 2.0 2.2 2.4 2.6 2.9 3.2

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2015 2020 2025 2030 2035 2040

Medium 2.2 2.7 3.3 4.2 5.3 6.8

High 2.3 3.0 4.1 5.5 7.5 10.2

Cargo handling considerations

The existing wharf including extension and additional container wharf proposed in Phase 2 with

matching cargo handling machinery will have installed capacity to handle 7.6 million tonnes per annum

and operating capacity 5.7 million tonnes per annum is sufficient to handle the cargo requirements as

per the demand forecast under medium scenario. Therefore on the considerations of demand and the

cargo handling capacity, the port is capable of handling 5.7 million tonnes of cargo with operational

efficiency of 75% of installed capacity of 7.6 million tonnes per annum.

It will be possible to achieve the capacity given above, provided the evacuation of cargo as well as

handling of incoming cargo is possible with the existing road network augmented by additional

dedicated four lane road corridor from the port complex upto a suitable point on the National Highway

– 47 connecting Trivandrum and Cochin.

A note detailing out the route profiling as under taken by Atlas Survey Engineering System covering the

various evacuation options is given below which will have to be given serious considerations and to be

incorporated as part of development plan of Kollam city and surrounding areas in consultation with

urban development authorities of Government of Kerala.

Road evacuation options

During the topography and route profiling exercise, 4 road routes which seemed suitable enough for the

smooth transportation of freight were surveyed. Following are the findings of the exercise

1. From Port gate to Ammachiveedu junction -

One road starts from the gate of the port to Ammachiveedu junction which is 1,832 metres long.

Through this road, freight can be transported via NH 47 to Kochi without touching Kollam City

Traffic. But the width of this road upto 630 metres is only 7 metres. Beyond 630 metres till

1150metres the road width is varied from 10 to 13 metres. Beyond 1,150 metres till the end of this

road i.e. Ammachiveedu junction the width is about 12 metres and it is also straight. There are lots

of residential buildings on both sides of this road. The level difference between the said

Ammachiveedu junction and the wharf is 4.5 metres.

2. From Port gate to Beach and then to Trivandrum -

The second road starts from the port via Kochupilamood junction ends near Kollam Beach. This is

nearly 1,935 metres long and the road continues from there via Varkala along the coast to

Thiruvananthapuram. The said coastal road is now under construction. The width of this road from

the beginning upto 200 metres is 5 metres and there is a school, church and other residential

building on both sides. The remaining 1,735 metres there are a lot of buildings on the right side and

on the left side are filled with slums and other type of buildings.

Kollam canal also passes by the left side of this road. This road is nearly 8 metres wide (varies from 8

to 10 metres). There is a narrow bridge existing at Kochupilamood junction and it has been given to

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understand that Public Works Department, Kollam is proposing to construct a new bridge. The level

difference between the said beach side road and wharf is 3.14 metres.

3. From Port gate via Kochuplamoodu junction and then to Police camp

The third road starts from the Kochupilamood junction to Police Camp junction which is 860 metres.

Through this road, freight can be transported via NH 47 to Thiruvananthapuram without touching

Kollam City traffic. Width of this road is nearly 14 metres and it is also straight. There are big

buildings on both sides. The level difference between the said police camp junction and the wharf is

7.5 metres.

4. From Port gate to Kochuplamoodu junction to Chinnakada round about (which is the Main city

centre for Kollam).

The fourth road starts from the Kochupilamood junction ends near Chinnakada roundabout which is

1,140 metres long. Through this road freight can be transported via NH 208 to Thengassi, Tamilnadu.

But this road is direct link to Kollam City. The width of this road is 14 metres and it is straight. There

are lot of shops in both sides. The level difference between the said Chinnakada roundabout

junction and the wharf is 8 metres.

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6. Cost estimates

6.1 Capital cost estimation The State Government of Kerala had the foresight to tap the potential of Thankassery for the

development of a port and had accordingly invested in phase wise manner over a period of time to

develop the region into a coastal / feeder gateway terminal. The investments incurred as on March 1st

2010 for the development of the Thankassery port by the State Government of Kerala is indicated in the

section below.

6.1.1 Cost incurred by the State Government for the development of

Thankassery Port

The sector wise cost incurred for the various structures at Thankassery Port are –

Note – The cost incurred have been obtained from the Harbour Engineering Department

1. Works under Fisheries Department

S.

No.

Costs incurred In Million Rs. Year of construction

1. Construction of Main break water – 2100

metres

Under Tsunami programme – 500 metres

Funded by Central Govt. – 50%

State Govt. – 50%

295.00 Initial work on the breakwater

commenced in 1990 and

around 1,450 meters of

breakwater was completed in

1996.

The balance of the breakwater

work was again started in

1996 and completed in 2001

2. Strengthening of Break water – Funded by

Asian Development Bank

107.40 Done in 2008-09 F.Y

Total actual cost 402.40 Table 23: Project cost incurred under Fisheries Department

2. Works under ASIDE Scheme of Ministry of Commerce & Industry

S.

No.

Costs incurred In Million Rs. Year of construction

1. Extension of wharf 72.30 The work on the extension of

the existing wharf commenced

in September 2008 and is

expected to be completed by

end of March 2010

2. Road and retaining wall 44.50 Work had commenced in

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S.

No.

Costs incurred In Million Rs. Year of construction

September 2008 and as

ongoing but started in Sept

2008

3. Yard development 61.20 Of the total work envisaged,

around 50% has been

completed in March 2009 at a

cost of Rs. 20.2 million

Three ( 3) more acres have to

be developed and around Rs.

41.0 million has been allotted

for the same, taking the total

cost for yard development to

Rs.61.2 million

Total actual cost 178.00 Table 24: Project cost incurred under ASIDE scheme of Ministry of Commerce & Industry

3. Works under State Government (Port Sector) under State Plan Scheme

S.

No.

Costs incurred In Million Rs. Year of construction

1. Construction of wharf 54.10 The construction of the wharf

was completed in November

2006

2. Road, compound wall, drains etc. 18.20 The construction of the said

structures was completed in

March 2009

3. Water supply 7.60 Work for water supply

commenced in September

2009 and as on march 2010,

the works were still in

progress

4. Renovation of old godown 3.30 The renovation of old godown

was completed in 2009

5. Electrification of yards 7.00 The electrification of yards

was started in January 2010

and is expected to be

completed by end of March

2010

Total actual cost 90.20 Table 25: Project cost incurred under State Government (Port sector)

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4. Works under Tsunami Rehabilitation Programme under port sector

S.

No.

Costs incurred In Million Rs. Year of construction

1. Transit shed 7.10 Completed in January 2010

2. Port road 8.10 Completed in January 2010

3. Dredging cost 24.80 Work in progress, to be

completed by end March 2010

Total actual cost 40.00 Table 26: Project cost incurred Tsunami rehabilitation programme under port sector

5. Summary of the costs incurred by the State Government of Kerala

Scheme / State Plan In Rs. million

Fisheries sector 402.40 5

ASIDE scheme 178.00

Port sector under state plan 90.20

Port sector under Tsunami Rehabilitation Programme 40.00

TOTAL COSTS 710.60 Table 27: Summary of the project cost incurred by the State Government of Kerala

6.1.2 Additional planned costs for development of the Thankassery port

The envisaged port planning takes into consideration the existing facilities already developed by the

State government and the current work-in-progress which the State Government is expected to

complete before the prospective private developer is selected. The immediate focus is to utilize the

existing infrastructure created by State Government and then invest further, especially in machineries

and equipment, to complete the port which can handle the envisaged cargo.

Port planning is done with the focus that only when the capacity of the existing facilities is crossed, that

the additional infrastructure would be planned. Planning and subsequently investments for the

additional facilities is a function of the projected cargo growth and accordingly, investments in a phase

wise manner have been indicated to cater to the envisaged cargo volume that would be expected at

Thankassery port. The phasing and the cost estimates for the additional facilities is indicated below:

ITEM TITLE ESTIMATED COST

Phase-1

( till 2020)

Phase-2 ( 2020 onwards)

Total

1

LAND

1.1 Private/ Government 0.00 0.00 0.00

5 For the purpose of the financial projection, the cost of breakwater has not been taken into account

since it would make the project unviable.

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ITEM TITLE ESTIMATED COST

Phase-1

( till 2020)

Phase-2 ( 2020 onwards)

Total

2

SURVEYS

2.1 Land Survey 0.00 0.25 0.25

2.2 Confirmatory Geotechnical Investigation 0.00 0.75 0.75

2.3 Confirmatory bathymetric & other surveys for navigation. 0.60 0.00 0.60

3

SITE DEVELOPMENT

3.1 Strengthening/ widening of existing approach 36.00 40.00 76.00

3.2 Reclamation over existing land area upto roal level 0.00 41.00 41.00

3.3 Shore protection 0.00 54.00 54.00

3.4 Internal Roads 40.00 58.00 98.00

4

MARINE STRUCTURES

4.1 Strengthning of existing wharf including extension 36.00 0.00 36.00

4.2 New multipurpose wharf 0.00 500.00 500.00

4.3 Jetty in breakwater side 0.00 0.00 0.00

4.4 Fixtures/ fittings 1.60 3.00 4.60

5

ACCESS TO PORT AREA

5.1 Gate complex 1.80 1.40 3.20

5.2 Fencing/ compound wall 2.80 3.00 5.80

6

BUILDINGS

6.1 Control room cum administrative building 0.00 0.00 0.00

Rail 0.00

6.2 Rest room & canteen 4.50 4.20 8.70

6.3 Pump house 0.90 0.00 0.90

6.4 Substation building & generator room 1.10 0.00 1.10

6.5 Misc structures 1.50 1.70 3.20

7

WATER

7.1 Supply from local board 0.00 0.40 0.40

7.2 Storage & distribution 0.00 2.40 2.40

8

FIRE FIGHTING

8.1 Fire fighting equipments & accessories 1.60 0.00 1.60

9

SURFACE WATER & DRAINAGE

9.1 Storm water drainage system 0.60 0.75 1.35

10

ENVIRONMENTAL CONSIDERATIONS

10.1 Cost for Environmental Considerations 1.20 0.00 1.20

11

MECHANICAL - MATERIAL HANDLING EQUIPMENT

11.1 Cranes/ forklifts 200.00 210.00 410.00

12 VEHICLES/ EQUIPMENTS

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ITEM TITLE ESTIMATED COST

Phase-1

( till 2020)

Phase-2 ( 2020 onwards)

Total

12.1 Transportation Through

subcontract

13

ELECTRIFICATION & INSTRUMENTATION

13.1 Electrical installation & distribution 20.00 25.00 45.00

14

COMMUNICATION

14.1 Communication network 0.50 0.50 1.00

15

DREDGING

15.1 Dredging (Provisional) 0.00 190.00 190.00

15.2 Navigational Aids 0.00 3.80 3.80

16

TUGS & OTHER FLOATING CRAFT

16.1 Tugs & floating crafts Through

subcontract

17

PROFESSIONAL FEES

17.1 Project reports & approvals 6.00 10.00 16.00

17.2 Detailed engineering and project monitoring 4.00 16.50 20.50

17.3 Other professional fees 0.50 1.25 1.75

18

MISC. COSTS & CONTINGENCIES

18.1 Misc costs 2.50 3.25 5.75

18.2 Contingencies 36.30 78.85 115.15

Total Estimated Project Cost Rs. 400.00 1250.00 1650.0

0

Table 28: Additional project cost envisaged for development of Thankassery port

The existing land can be leased to the SPV at the market values. For the purpose of calculation, the lease

rental has been taken as Rs. 7.3 million per annum6.

6 This is based on the current market value of the land being Rs. 2 crore per acre and considering 11 acres, the cost

of the land is Rs. 22 Crore ( Rs. 220 million). Assuming that the concessionaire period is for 30 years, we have the figure of Rs. 220 million / 30 years i.e Rs. 7.3 million per annum.

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7. Determination of tariffs

7.1 Overview of port tariffs The proposed port at Thankassery shall price its services competitively in order to provide a cost feasible

logistics gateway to its end customers. The tariffs so determined are different for coastal vessels and for

foreign going vessels. The tariffs for containers and general cargo consist of two major components,

namely:

Vessel related charges

Cargo related charges

7.1.1 Vessel related charges

The vessel related charges includes port dues, pilotage charges and berth hire charges as illustrated in

table below (These rates shall differ for containerized cargo and general cargo):

Type of vessel related charges Unit of measurement

Port dues INR/GRT

Pilotage INR/GRT

Berth hire charges INR/GRT/Hour

Table 29: Vessel related charges

7.1.2 Cargo related charges

The cargo related charges for containerized cargo shall consist of the following components as shown in

the table below:

Particulars Unit of measurement (UOM)

Laden containers Empty containers

Handling charges

Between ship and container yard

Between container yard and CFS

Between container yard and truck INR/TEU INR/TEU

Average wharfage charges INR/TEU INR/TEU

Table 30: Cargo related charges

Similarly, the cargo related charges for bulk and dry-bulk cargo shall consist of the following

components as shown in the table below:

Particulars Unit of measurement (UOM)

Average wharfage charges INR/ton

Composite handling charges INR/ton

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Table 31: Cargo related component charges

7.1.3 Tariff regulatory framework

The major ports in India are administered under the Major Ports Trust Act of the Union Government.

The tariff is set by the Tariff Authority for Major Ports (TAMP). Thankassery being a non-major port is

being administered by the Directorate of Ports, Government of Kerala, which shall be vested with the

powers for tariff setting and review. The tariff rates for the Thankassery port will be determined by the

Special Purpose Vehicle Company ( SPVC) which will be set up with an equity stake of the Government

of Kerala as well as the Private Developer and will be governed from time to time by the state

government through the Directorate of Ports.

7.2 Tariff determination The schedule of port charges for Thankassery has to be fixed in such a way that it creates a win-win

situation for both the users and developers. The Consultants derived cues from the various vessel and

port related charges that the competing ports in the vicinity are charging and subsequently used most

suitable values in the financial model to check for feasibility. The tweaking of rates has been done

without compromising on the returns that has to be ensured for the private developer.

Heading Cost parameter Unit of

Measurement Container vessels

Vessel related charges

Port dues Rs. per GRT 4.00

Pilotage charges Rs. per GRT 5.00

Berth hire charges Rs per GRT per hour or part thereof

0.10

Cargo related charges

Wharfage charges Rs per TEU 250.00

Cargo handling charges Rs. per TEU 250.00

Table 32: Tariff for container vessels

Heading Cost parameter Unit of

Measurement Bulk vessels < 12,000 GRT

Vessel related charges

Port dues Rs. per GRT 4.00

Pilotage charges Rs. per GRT 5.00

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Heading Cost parameter Unit of Measurement

Bulk vessels < 12,000 GRT

Berth hire charges Rs. per GRT per hour or part thereof

0.10

Cargo related charges

Wharfage charges Rs per MT 25.00

Cargo handling charges Rs. per MT 15.00

Table 33: Tariff for bulk coastal vessels

These rates are only indicative in nature and the respective maritime authority shall take a final decision

on this. The above rates shall undergo revision once in every three years with a 20% increase factored in

at the time of revision.

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8. Financial analysis

8.1 Introduction This chapter provides the financial analysis and financial projections for the investments proposed in the

earlier chapter. Accordingly the NPV and IRR calculations have been carried out and the overall financial

projections have been projected for a period of 30 years from 2011to 2040. The financial projections

show the financial performance and position over the investment horizon.

8.2 Identification of revenue streams

8.2.1 Traffic forecasts

The traffic projection of cargo for the port has been done for high, medium and low case scenarios.

Considering the macro-economic scenarios, the hinterland profile and the possibility of competition that

can be faced by the port; the medium case scenario has been used as the base case for financial

modeling. The table below shows the summary of the traffic assumed for financial forecasting.

Year Bulk ( Mn Tonnes) Container ( Mn Tonnes) Total Cargo ( Mn

Tonnes)

2015 1.527 0.680 2.207

2020 1.904 0.814 2.718

2025 2.398 0.989 3.387

2030 3.040 1.215 4.255

2035 3.839 1.504 5.343

2040 4.937 1.868 6.8057

Table 34: Projected traffic for financial modeling8

8.2.2 Tariffs

The tariffs form the second part of the revenue stream assumptions. The tariffs for cargo have been

determined keeping in view the competing ports that share the hinterland with Thankassery port. The

7 The traffic for the purpose of the financial projections for the year 2040 has been capped at 5.7 million tonnes

based on 75% of the capacity of the berth. 8 Cargo having a tonnage of greater than 20 tonnes per TEU has been excluded from the financial projections. This

is primarily because the material handling equipment so considered in the financial projections have a capacity to handle around 20 tonnes per TEU.

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port operations are based on coastal and feeder operations and keeping this in view, the tariff design

has been kept simple. Also the stevedoring and handling operations are expected to be outsourced.

The proposed schedule of port charges is given in the previous chapter.

8.3 Assumptions of investment and expenditure

8.3.1 Investment in capacity development

As indicated in the earlier sections, the additional infrastructure would be planned only when the

capacity of the existing wharf is fully utilized. To that extent, investment would be infused to strengthen

the existing infrastructure and additional investments would be made in a phase wise manner to cater

to the envisaged cargo growth. The existing investments and the phase wise investment expected

(excluding IDC / pre-operative expenses) in the future is detailed out in the previous chapter and the

summarized details has been indicated below:

Sr No Phase Time frame considered Amount in Rs. million

1 Existing infrastructure9 Till 2020 308.20

2 Phase I Till 2020 400.00

3 Phase II From 2020 onwards 1,250.00

Total 1,958.20

Table 35: Summary of phase wise investment details

8.3.2 Debt / equity financing assumptions

The assumptions pertaining to financing of the project are valid for all the phases. It is assumed that the

investment would be completed in the same year and the debt servicing would be possible from the first

year of operation itself

Assumption Description Unit

Debt percentage 70%

Equity margin 30%

GoK’s share in equity 49%

Developer’s share in equity 51%

Cost of long term secured debt 10%

Cost of equity 13%

Interest on Unsecured loan 8%

Margin money for Working Capital 40%

Interest on Working Capital 11%

Debt repayment period 10 years

Moratorium period 2 years

Construction period for Phase II 2 years

Working capital – Average receivables 0.5 month

9 The same is excluding the costs incurred by the Fisheries Department

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Working capital – Average payables 0.5 month

Table 36: Debt / financing options

Note:

1. IDC is not considered separately as it is included in the preoperative expenses;

2. In case of deficiency in cash balance the same will be made good by way of interest free

unsecured loans from promoters

8.3.3 Operations and maintenance expenses

The annual operating and maintenance costs including costs incurred on repairs can be best estimated

separately on each relevant component of the above estimated costs. For this purpose, the following

factors need to be taken into consideration:

Life of each type of infrastructure / equipment / asset

Nature / frequency of repair works required

Nature / frequency of maintenance works required

The efficiency of operations conducted

A realistic assessment of the operations and maintenance cost however often proves difficult as it varies

from project to project depending on the actual use of the equipment and the works, maintenance

standards, workforce employed and the local environment. As a practical approach the annual O&M

expense is fixed as a percentage of the capital expense. The expenses related to operations other than

O&M have been fixed as a percentage of the gross revenues.

Given the above, the table below shows such percentages assumed for the purpose of estimation of the

repairs and maintenance and admin and operating costs. The percentage of repairs and maintenance

will vary as the equipments become old and need more attention than in the early years.

As mentioned above, the operating and maintenance expenses are estimated as a percentage of

revenue and capital expenditure respectively. The Table below shows these percentages.

Sr.

No.

Description Operations & Maintenance

1 Repairs and Maintenance 0.5% of the total project cost

between 2011 to 2015

1% of the total project cost between

2016 to 2020

1.5% of the total project cost

between 2021 to 2030

2.0% of the total project cost

between 2031 to 2040

2 Selling, general & administrative expenses 5% of total revenue

3 Variable operating costs-cargo related & others 10% of total revenue

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Sr.

No.

Description Operations & Maintenance

4 Cargo handling charges using port facilities (

outsourced) - bulk

30% of cargo handling revenue

5 Cargo handling charges using port facilities

(outsourced) - container

30% of cargo handling revenue

6 Pilotage expenses – outsourced 70% of pilotage revenue

7 Lease rental for land Rs.7.33 million per annum

8 Number of administrative and managerial staff 15

9 Average salary per annum of managerial staff Rs. 0.475 million per annum

10 Average salary per annum of support staff Rs. 0.225 million per annum

11 Per annum increase in cost of salary 5%

Table 37: Operation and maintenance percentage

8.3.4 Royalty payment to the Government of Kerala

The royalty payments that are expected to be paid to Government of Kerala are as per the Table 38

below:

Description Rate (% of total revenue)

Full waterfront royalty to GoK - dry cargo 12

Full waterfront royalty to GoK – containers 12

Table 38: Waterfront royalty to GoK

8.3.5 Port related assumptions

The assumptions relating to overall port operations are as under:

Sr.

No.

Description Port related assumptions

1. Number of month in which port will

remain operational

12 months

2. No. of operational days in a year 270

3. No. of operational hours per day 16 hours

4. No. of shifts per day 2

5. Installed capacity of port - Phase I 3.6 mn. tonnes per annum

6. Increase in installed capacity of port in

the year 2020- Phase II

4.0 mn. tonnes per annum

7. Total installed capacity of port Phase I

& II

7.6 mn. tonnes per annum

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Sr.

No.

Description Port related assumptions

8. Available operational capacity as a

percentage of installed capacity

75%

9. Operational capacity Phase I & II 2.7 mn. Tones (phase I) plus 3 mn. Tonnes (Phase II)

= Total 5.7 million tones per annum

10. Loading / Unloading rate per hour for

Bulk cargo

Initially 450 MT, from 2020 & onwards 900 MT

11. Loading / Unloading rate per hour for

containerized cargo

Initially 16 TEUs, from 2020 & onwards 32 TEUs

12. Berthing time per ship – Bulk 15.33 hours

13. Berthing time per ship Container 14.50 hours

14. Size of vessel calling at port – Bulk Initially 8,000 GRT, from 2020 & onwards 15,000

GRT

15. Size of vessel calling at port – Container Initially 8,000 GRT, from 2020 & onwards 15,000

GRT

16. Average parcel size of vessels calling at

port – Bulk

Initially 6,000 MT, from 2020 & onwards 12,000

GRT

17. Average parcel size of vessels calling at

port – Container

Initially 200 TEUs, From 2020 & onwards 400 TEUs

Table 39: Port related assumptions

8.3.6 Depreciation and tax expenses

The WDV rates applicable for income tax calculation and the SLM rates are tabulated as below:

Item SLM WDV

No. of years Rate %

Land & Land Development - 0%

Buildings 60 10%

Marine Structures 40 10%

Machinery and equipments 20 15%

Utility (Water, electricity, commn &

firefighting) 15 15%

Furniture & fixtures 15 15%

Capital dredging 60 10%

Table 40: Depreciation rates for various assets

Replacement of assets is not considered once the useful life of the asset is completed. Any replacement

of the asset that may be required will be done from internal accruals and current assets.

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The tax rate applicable for the project is as per the table below

Income tax rates Rates

Income tax - corporate tax 33.22%

MAT Rate 18%

Table 41: Tax rates

8.4 Financial projections Based on the assumptions and estimates, the profit and loss statement and cash flow statement for the

project were prepared.

8.4.1 Projected revenues

The projected total gross revenues for each phase are as per the table below

Rs. Million Year Revenues

2015 176.43

2020 423.20

2025 596.75

2030 1077.54

2035 1945.62

2040 2411.78

Table 42: Projected Gross Revenues

8.4.2 Profitability

In Rs. Million Year EBIDTA

2015 91.53

2020 253.17

2025 365.20

2030 689.53

2035 1525.75

2040 2273.77

Table 43: EBITDA

8.4.3 Financial indicators – NPV, IRR and DSCR

This section provides the overall financial analysis for the proposed investments. Accordingly the NPV,

IRR and the financial projections have been carried out for a period of 30 years. DSCR calculations have

been carried out for each phases from availing the debt till its repayment.

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While a positive NPV shows that the project as feasible, the purpose of the IRR calculations is to assess

whether the returns are adequately above the hurdle rate the stakeholders would have in mind in terms

of an adequate return on investment and the purpose of DSCR is to evaluate the overall debt payment

capability.

Following is the summary of these financial indicators:

Description Amount

Internal Rate of Return (IRR) in % 12.51

Net Present Value (NPV) in Rs. Million 205.09

Payback period in years 15

DSCR – Phase I 1.82

DSCR – Phase II 2.81

Table 44: Financial feasibility indicators

Detailed calculations of each of above financial indicators are given in Annexure 11

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9. Way forward

The Consultants propose the following recommendations to develop Thankassery port -

It is important for Thankassery port to pre-empt direct competition with existing major ports such as Cochin port and Tuticorin port as these ports already have huge volumes of business and state of the art infrastructure in place. Accordingly Thankassery should be positioned as a coastal port complementing the existing operations of Cochin Port and the proposed operations at Vizhingham port.

At present the depths available at wharfs and inside the harbour are about -6.5 m to -7.0 m , which will allow vessels having draft upto 5.5 to 6 m to operate in the harbour. This will allow vessels of size 6,000 to 7,000 dwt to berth at all tides. Hence in phase 1 it is proposed to commence operations using 6,000 to 7,000 DWT vessels with minimal investment as this option obviates the requirement for deep dredging. In other words, the huge capital and maintenance dredging costs is pre empted here. In phase 2 from 2020, the port would be able to handle 15,000 DWT vessels ( after dredging) considering the increased traffic.

The State Government has already done a significant amount of the effort over the period of years to provide a ready gateway facility. This obviously becomes a selling point for Thankassery port, since the prospective Developer can invest the minimum amount required for material handling equipment, strengthening of berth and other minor contingencies and this also minimizes the risk for prospective private developers who can start operations within two to three months of signing of the concessionaire agreement.

Having an existing infrastructure also offers the prospective developer to utilize the facilities to its optimum capacity. Accordingly the private developer can observe the traffic flow to the port for a period of 5 to 6 years and based on the prevailing circumstances can ramp up capacities. This provides the port developers a leeway in terms of port planning.

The evacuation of the cargo is a critical parameter for Thankassery port and hence it is necessary

that the existing road network is augmented by additional dedicated four lane road corridor from the port complex upto a suitable point on the National Highway – 47 connecting Trivandrum and Cochin. The port connectivity is to be incorporated as part of development plan of Kollam city and surrounding areas in consultation with urban development authorities of Government of Kerala.

With regards to the development of the rail connectivity to the Kollam ( Thankassery) port, presently the inland movement of the cargo type being generated from the hinterland identified for Thankassery port is mainly through road since the primary cargo generators are within the radius of 150- 200 kms from the port. Cargo generators in the secondary hinterland of Tamil Nadu for the Kollam port is expected to use the rail connectivity, though this cargo expected is not very significant due to the same being routed towards Tuticorin port. Presently, based on the cargo identified for the port, rail connectivity is not a pre-requisite. However, if such a connection exists, it will provide additional advantage to the project.

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The cost for the development of road connectivity and that of the rail (if required) should preferably be undertaken by the government for making the project feasible and attractive to a private developer . ( A detailed financial analysis has been undertaken on the various funding options ( i.e funding to be provided either by government or the private developer) and the findings of the same has been indicated as part of Annexure 13 )

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Annexure 1 : Stakeholders contacted for the traffic survey

From primary hinterland (Kerala)

Trade Associations

Sr No Name of organization Place

1. Tea Trade Association Cochin

2. The Cochin Chamber of Commerce & Industry Cochin

3. Cashew Export Promotion Council of India Cochin

4. Coir Shippers’ Council Alleppey

Commodity Boards

Sr. No Name of organization Place

5. Rubber Board Kottayam

6. Tea Board Cochin

7. Coir Board Cochin

8. Coconut Development Board Cochin

9. Spices Board Cochin

10. Coffee Board Bangalore

Customs Entities

Sr. No Name of organization Place

11. Cochin Custom House Agents Association Cochin

12. Cochin Customs House Cochin

13. Cochin Clearing House Pvt Ltd Cochin

14. Paul Abrao & Sons Cochin

15. Aspinwall Cochin

16. Jai Narayana Shipping Cochin

17. Oriental EXIM Agency Cochin

Shipping Companies

Sr. No Name of organization Place

18. Shreyas Shipping & Logistics Mumbai

19. Seaways Shipping Limited Cochin

20. Caravel Logistics Chennai

21. Vikram Logistics Bangalore

22. Jindal Waterways Cochin

Industry / Companies

Sr. No Name of organization District Industry

23. Kerala Balers Alleppey Coir

24. William Goodacre & Sons India (P) Ltd Alleppey Coir

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Sr. No Name of organization District Industry

25. Cocomats International Alleppey Coir

26. Ceyenar Chemicals Pvt. Ltd Kottayam Rubber

27. Midas Treads (India) Pvt Ltd Kottayam Rubber

28. Kailas Cashews Kollam Cashew

29. Rajan Cashew Co. Kollam Cashew

30. Lourdes Matha Cashew Industries Kollam Cashew

31. St. Paul’s Cashew Factory Kollam Cashew

32. Asiatic Export Enterprises Kollam Cashew

33. Vijayalaxmi Cashew Co. Kollam Cashew

34. Capithans / Veronica Marine Exports Kollam Marine Food

35. Indian Aquatic Products Kollam Marine Food

36. Kerala Minerals and Metals Ltd Kollam Titanium di-oxide

37. Indian Rare Earths Kollam Sillimanite / ilmenite

38. Kerala Ceramics Kollam Clays

39. D’Cruz Navigation Kollam Sand

40. Greenland Paper Mills Kollam Paper products

41. RPC Paper Mills Kollam Paper products

42. Travancore Titanium Products Ltd Trivandrum Titanium di-oxide

43. English Indian Clays Ltd. Trivandrum Clays

44. Terumo Penpol Trivandrum Blood bags

45. Kerala State Industrial Development Corporation Trivandrum Industrial Development

46. A V Marbles Trivandrum Marbles

47. Variety Marbles Trivandrum Marbles

48. Gemwood Cochin Wooden products

49. Bharat Petroleum Corporation Limited Cochin POL

50. Grasim Industries Mumbai Cement

51. ACC (Gujarat Ambuja Cement) Mumbai Cement

52. Sanghi Cement Ahmedabad Cement

53. Malabar Cements Alleppey Cement

54. Cochin Condiments Idukki Spices

55. Leo Exports Idukki Vehicles

56. Lords Flavours Idukki Spices

57. Kanan Devan Hills Plantation Idukki Tea

58. Harrisons Malayalam Ltd. Idukki Tea

59. Nagarjuna Herbal Concentrates Idukki Ayurvedic medicine

60. Eastern Condiments Idukki Spices & food stuff

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From secondary hinterland (Tamil Nadu)

Custom entities

Sr. No Name of organization District

1. MSE Lines Tuticorin

2. Aspinwall & Co. Ltd., Tuticorin

3. A.V. Thomas & Co. Ltd Tuticorin

4. M/s Cargomar Tuticorin

5. Chakiat Agencies Tuticorin

6. Expo Freight Pvt. Ltd. Tuticorin

7. J. M. Baxi & Co. Tuticorin

8. Fly Jac Logistics Tuticorin

9. Galaxy (TTN) Agencies Tuticorin

10. Glow Freight Logistics Pvt. Ltd. Tuticorin

11. Indo Lloyd Freight Tuticorin

12. M/s Kuehne + Nagel (P) Ltd. Tuticorin

ICDs / CFSs/ Logistics Service Providers

Sr. No Name of organization District

1. Container Corporation of India Ltd. Tuticorin

2. M/s Sanco Trans Ltd Tuticorin

3. St John Freight Systems Limited Tuticorin

4. Container Corporation of India Ltd. Madurai

5. Central Warehousing Corporation Coimbatore

6. Container Corporation of India Ltd. Tirupur

7. Tirupur Container Terminals Private Limited Tirupur

8. M/s SICAL Distripark Ltd Tuticorin

Industry / Companies

Sr. No Name of company District Industry

1. Peacock Apparels Pvt. Ltd. Madurai Textiles

2. Fenner (India) Ltd. Madurai Rubber

3. Thiagarajar Mills Ltd. Madurai Textiles

4. T V S Srichakra Ltd. Madurai Tyres

5. Global Poly Bags Inds. Ltd Virudhunagar Polyethylene bags

6. TVS Interconnect Systems Madurai Electrical switches

7. Vaigai Chemical Industries Madurai Food processing

8. JVS Export Madurai Made-ups, fabrics trading

9. S.S.N. Trading Company Madurai Cement trading

10. Triumph Enterprises and Investment Pvt.

Ltd.

Madurai Cement trading

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Sr. No Name of company District Industry

11. Concord Exports Madurai Agri/Food exports

12. Dunite Rocks Pvt. Ltd. Madurai Granite

13. S. Jawaharlal & Co. Madurai Cement, timber trading

14. Aruna Alloy Steels Pvt. Ltd. Madurai Steel products

15. Prime Stones Madurai Granite

16. Sundaram Industries Ltd. Madurai Rubber

17. Sourz Agri Food Processing (P) Ltd. Dindigul Food processing

18. Arkay Rock Produce Pvt. Ltd. Madurai Granite

19. Madura Stones Pvt. Ltd. Madurai Granite

20. Kaltec Granites Pvt. Ltd. Hosur Granite

21. Rajah Green Fields Madurai Coir Pith

22. Standard Granites Virudhunagar Granite

23. Stanco Traders Virudhunagar Granite

24. Standard Match Co Virudhunagar Matches

25. The Mehta Industries Virudhunagar Slack & residual wax

26. Chellsons Packaging Pvt Ltd Virudhunagar PVC shrink film labels

27. Sripathi Paper & Boards Pvt Ltd Virudhunagar Paper & related products

28. Lovely Offset Printers Pvt Ltd Virudhunagar Books

29. Supreme Duplux Board Mills (P ) Ltd Virudhunagar Paper & related products

30. Metal Powder Co. Ltd Madurai Aluminium

31. Hi-Tech Arai Ltd. Madurai Rubber

32. Madura Coats Pvt. Ltd. Madurai Threads

33. Hari & Co Tuticorin Timber

34. Loyal Textiles Mills Ltd. Tuticorin /

Tirunelveli

Textiles

35. Vigneshwar Exports Tirunelveli Food processing

36. Harvell Cocopeat Tirunelveli Coco products

37. A to Z Tiles Park Tirunelveli Marbles/ Tiles

38. D Kamak Bathe Homes Tirunelveli Marbles / Tiles

39. Prabhat Saw Mills Tirunelveli Timber

40. Tata Coffee Limited Theni Coffee

41. Sigma Agro Derivatives (P) Ltd. Theni BBQ Briquette

42. Shri Renuga Textiles Ltd. Theni Textiles

43. Azaad Timber Theni Wood & timber

44. Kumar Dhall Mills Theni Agri/Food products

45. S. K. Aiyakkalai Nadar & Son Theni Agri/Food products

46. Sri Lakshmi Dhall Mills Theni Agri/Food products

47. Theni Guru Krishna Textile Mills (P) Ltd. Theni Textiles

48. NVS Agro Derivatives Theni Coir pith & products

49. M. Muthuraj (HUF) Theni Agri/Food products

50. Menaka Cotton Mills Ltd. Theni Textiles

51. Shri Renuga Soft-X Towels Ltd Theni Textiles

52. Geetha Timbers Ltd. Theni Wood & timber

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Sr. No Name of company District Industry

53. Geetha Timbers & Plywoods Ltd. Theni Wood & timber

54. Srinivas Fine Arts Pvt. Ltd. Virudhunagar Paper

55. Universal Polybags Inds Virudhunagar Polyethylene bags

56. Vel Stonex Pvt. Ltd. Virudhunagar Granite

57. V T M Ltd. Virudhunagar Textiles

58. SFA Technical Creations (P) Ltd Virudhunagar Textiles/Garments

59. Ambica Cotton Mills Dindigul Textiles

60. Arkay Glenrock Pvt. Ltd Dindigul Granite

61. Int’l Agricultural Processing Pvt. Ltd. Dindigul Food processing

62. Bnazrum Agro Exports (P) Ltd. Dindigul Food processing

63. Tanmix Company Dindigul Chemicals

64. Veg N Table Food Processing Pvt. Ltd. Dindigul Food processing

65. Sai Cocopeat Export Pvt. Ltd. Dindigul Coir products

66. Bannari Amman Spinning Mills Ltd. / Shiva

Texyarn Ltd.

Dindigul Textiles

67. C A V Cotton Mills / Sangeeth Group Dindigul Textiles

68. G V G Paper Mills Pvt. Ltd. Dindigul Paper

69. Danalakshmi Paper Pvt. Ltd. Dindigul Paper

70. Sudhan Spinning Mills Pvt. Ltd. Dindigul Textiles

71. Gherkins Agro Exports (India) Pvt. Ltd. Dindigul Food processing

72. St. Roche Exports Kanyakumari Various

73. Nagammal Mills Ltd. Kanyakumari Textiles

74. Kanam Latex Industries Pvt. Ltd. Kanyakumari Latex products

75. APN Shell Craft Kanyakumari Seashells handicrafts

76. Kanyakumari Marine Foods Kanyakumari Fish export

77. V. V. Mineral Kanyakumari Minerals

78. M. S. S. Asan Exports Kanyakumari Agricultural products

79. Kumaran Fishnets Limited Kanyakumari Fishnets

80. Indian Rare Earth Limited Kanyakumari Minerals

81. Mercury Fishnet Limited Kanyakumari Fishnets

82. Suresh Marbles & Granites Kanyakumari Marbles

83. Thiraviyam Coco Products Kanyakumari Coco Products

84. Sabare & Co Kanyakumari Medicinal herbs

85. Jeyram Marbles Kanyakumari Marbles

86. Royal Marbles Kanyakumari Marbles

87. Shine Marbles Kanyakumari Marbles

88. Lebanon Christopher Enterprises Pvt Ltd Kanyakumari Timber

89. Jaya Timber Kanyakumari Timber

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Annexure 2 : Statistical analysis of data for expected

traffic at Thankassery port

Methodology of traffic data collection

Deloitte followed a two pronged methodology for collection and validation of data for arriving at the

likely estimate of traffic data for Kollam Port. The research design adopted for this project was a two

stage process which consisted of

1. a Secondary Research of collecting all the available information and published data from

authentic sources in stage I and

2. a Primary Research based on a sample survey of key stakeholders in stage II

The data and information obtained in stage I (i.e. through Secondary Research) were screened rigorously

for correctness and appropriately filtered for purpose of quantitative analysis at a later stage. The

Primary Research was conducted in the primary and secondary hinterland of Kollam and involved

interviews of the major export / import oriented industries, trade associations and key stakeholders in

the potential development of the port at Kollam.

The inputs, qualitative as well quantitative, received through primary research were taken into

consideration for deriving assumptions on likely traffic and growth rate of traffic at Kollam port. The

data obtained from the Secondary Research was further seen and reviewed in light of findings and

inputs from the Primary Survey. Based upon the key findings, the data was qualitatively adjusted by

taking in account the various factors that could have a probable impact on the traffic that would be

handled at Kollam port.

The data so collected was analysed using different quantitative techniques which included measures

such as mean, proportion, standard deviation, outliers and appropriated statistical tools including

hypothesis tests.

The results for select commodities having a significant proportion of the traffic are furnished below

Statistical analysis of the data

In order to verify the validity of assumptions for expected traffic at Kollam port, we have used

hypothesis test for proportion. As the sample size was less than 30 and population deviation unknown,

t-distribution was used to test the hypothesis. In applying this test, it has been assumed that the data in

the population for each category follows Normal distribution. Even so, in some cases, the sample size

(number of respondents) being quite small limits the adoption of t-test for validation of proportion in

this manner. To remove that anomaly, we have taken weighted proportion instead of actual sample

proportion.

The findings and results for each category of cargo are tabulated separately for each category as follows:

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Table 1: Hypothesis test for Food & Agri Processing Cargo from Madurai

Summary Statistics on Food & Agri Processing Cargo from Madurai

Particulars Value Units / remarks

No. of players in the category 42 Nos.

No. of respondents in the category 2 Nos.

Total Traffic 34736.14 tons

Traffic handled by Sample entities 14149.01 tons

Proportion of respondents saying yes for diverting traffic to Kollam

1.0 Sample proportion

Weighted proportion of respondents saying yes for diverting traffic to Kollam

0.4044 Weighted sample proportion

Estimate taken by Deloitte (Null hypothesis H0: p = 0.5) 0.5 Assumed proportion

Std. Error of estimate 0.3470 From sample

Calculated value of t statistic -0.2753 From sample

prob- value (significance) 0.8289 Far greater than 0.05

Note: While the sample size was only 2 respondents for this category, the two entities in sample

accounted for more than 40% of cargo for the category. Accordingly, we have estimated that 50% of this

traffic can be assumed to be diverted to Kollam port. Therefore, instead of taking the actual sample

proportion of 1.0 for hypothesis testing, we have taken weighted proportion of 0.4044 to validate the

assumption.

Result

As seen from the table, the prob-value for Null Hypothesis (H0: p = 0.5) to be true comes to be 0.8289. This value is far greater than the significance level of 0.05 and hence we can accept the Null hypothesis and accordingly expect 50% of traffic for this category to be diverted to Kollam Port.

Therefore, expected Traffic = 17368.1 (50% of 34736.14) tons

Table 2: Hypothesis test for Textile and related Cargo from Madurai

Summary Statistics on Textile and related Cargo from Madurai

Particulars Value Units / remarks

No. of players in the category 154 Nos.

No. of respondents in the category 13 Nos.

Total Traffic 27736.5 tons

Traffic handled by Sample entities 16220.5 tons

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Proportion of respondents saying yes for diverting traffic to Kollam

0.7317 Sample proportion

Estimate taken by Deloitte (Null hypothesis H0: p = 0.75) 0.75 Assumed proportion

Std. Error of estimate 0.1231 From sample

Calculated value of t statistic -0.1624 From sample

prob- value (significance) 0.8737 Far greater than 0.05

Result

As seen from the table, the prob-value for Null Hypothesis (H0: p = 0.75) to be true comes to be 0.8737. This value is far greater than the significance level of 0.05 and hence we can accept the Null hypothesis and accordingly expect 75% of traffic for this category to be diverted to Kollam Port.

Therefore, expected Traffic = 20802.4 (75% of 27736.5) tons

Table 3: Hypothesis test for Textile and related Cargo from Theni

Summary Statistics on Textile and related Cargo from Theni

Particulars Value Units / remarks

No. of players in the category 17 Nos.

No. of respondents in the category 7 Nos.

Total Traffic 9057.2 tons

Traffic handled by Sample entities 8505.3 tons

Proportion of respondents saying yes for diverting traffic to Kollam

0.2614 Sample proportion

Estimate taken by Deloitte (Null hypothesis H0: p = 0.30) 0.30 Assumed proportion

Std. Error of estimate 0.1661 From sample

Calculated value of t statistic -0.2322 From sample

prob- value (significance) 0.8240 Far greater than 0.05

Result

As seen from the table, the prob-value for Null Hypothesis (H0: p = 0.30) to be true comes to be 0.9474. This value is far greater than the significance level of 0.05 and hence we can accept the Null hypothesis and accordingly expect 30% of traffic for this category to be diverted to Kollam Port.

Therefore, expected Traffic = 2717.2 (25% of 9057.2) tons

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Table 4: Hypothesis test for Rubber Export

Summary Statistics on Rubber Export

Particulars Value Units / remarks

No. of respondents in the category 5 Nos.

Total Traffic from Hinterland 27978 tons

Traffic handled by Sample entities 1220 tons

Proportion of respondents saying yes for diverting traffic to Kollam

0.0526 Sample proportion

Estimate taken by Deloitte (Null hypothesis H0: p = 0.053) 0.053 Assumed proportion

Std. Error of estimate 0.0998 From sample

Calculated value of t statistic -0.0041 From sample

prob- value (significance) 0.9969 Far greater than 0.05

Result

As seen from the table, the prob-value for Null Hypothesis (H0: p = 0.053) to be true comes to be 0.9969. This value is far greater than the significance level of 0.05 and hence we can accept the Null hypothesis and accordingly expect 5.3% of traffic for this category to be diverted to Kollam Port.

Therefore, expected Traffic = 1482 (5.3% of 27978) tons

Table 5: Hypothesis test for Rubber Import

Summary Statistics on Rubber Import

Particulars Value Units / remarks

No. of respondents in the category 4 Nos.

Total Traffic from Hinterland 22160 tons

Traffic handled by Sample entities 9850 tons

Proportion of respondents saying yes for diverting traffic to Kollam

0.0629 Sample proportion

Estimate taken by Deloitte (Null hypothesis H0: p = 0.063) 0.063 Assumed proportion

Std. Error of estimate 0.1214 From sample

Calculated value of t statistic -0.0004 From sample

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prob- value (significance) 0.9996 Far greater than 0.05

Result

As seen from the table, the prob-value for Null Hypothesis (H0: p = 0.063) to be true comes to be 0.9996. This value is far greater than the significance level of 0.05 and hence we can accept the Null hypothesis and accordingly expect 6.3% of traffic for this category to be diverted to Kollam Port.

Therefore, expected Traffic = 1396 (6.3% of 22160) tons

Table 6: Hypothesis test for Cashew Kernels

Summary Statistics on Cashew Kernels

Particulars Value Units / remarks

No. of respondents in the category 6 Nos.

Total Traffic 70000 tons

Traffic handled by Sample entities 27931 tons

Proportion of respondents saying yes for diverting traffic to Kollam

0.9474 Sample proportion

Estimate taken by Deloitte (Null hypothesis H0: p = 0.85) 0.85 Assumed proportion

Std. Error of estimate 0.0912 From sample

Calculated value of t statistic 1.0692 From sample

prob- value (significance) 0.3338 Far greater than 0.05

Result

As seen from the table, the prob-value for Null Hypothesis (H0: p = 0.85) to be true comes to be 0.3338. This value is far greater than the significance level of 0.05 and hence we can accept the Null hypothesis and accordingly expect 85% of traffic for this category to be diverted to Kollam Port.

Therefore, expected Traffic = 59400 (85% of 70000) tons

Table 7: Hypothesis test for Cashew Nut Shell Liquid

Summary Statistics on Cashew Nut Shell Liquid

Particulars Value Units / remarks

No. of respondents in the category 1 Nos.

Total Traffic 7813 tons

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Traffic handled by Sample entities 5000 tons

Proportion of respondents saying yes for diverting traffic to Kollam

0.7246 Sample proportion

Estimate taken by Deloitte (Null hypothesis H0: p = 0.80) 0.80 Assumed proportion

Std. Error of estimate 0.3159 From sample

Calculated value of t statistic -0.2386 From sample

prob- value (significance) 0.8509 Far greater than 0.05

Result

As seen from the table, the prob-value for Null Hypothesis (H0: p = 0.80) to be true comes to be 0.8509. This value is far greater than the significance level of 0.05 and hence we can accept the Null hypothesis and accordingly expect 80% of traffic for this category to be diverted to Kollam Port.

Therefore, expected Traffic = 6520 (80% of 8150) tons

Table 8: Hypothesis test for Marine Products

Summary Statistics on Marine Products

Particulars Value Units / remarks

No. of respondents in the category 6 Nos.

Total Traffic 100318 tons

Traffic handled by Sample entities 8400 tons

Proportion of respondents saying yes for diverting traffic to Kollam

0.1541 Sample proportion

Estimate taken by Deloitte (Null hypothesis H0: p = 0.15) 0.15 Assumed proportion

Std. Error of estimate 0.1474 From sample

Calculated value of t statistic 0.0280 From sample

prob- value (significance) 0.9787 Far greater than 0.05

Result

As seen from the table, the prob-value for Null Hypothesis (H0: p = 0.15) to be true comes to be 0.9787. This value is far greater than the significance level of 0.05 and hence we can accept the Null hypothesis and accordingly expect 15% of traffic for this category to be diverted to Kollam Port.

Therefore, expected Traffic = 15120 (15% of 100800) tons

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Table 9: Hypothesis test for Spices

Summary Statistics on Spices

Particulars Value Units / remarks

No. of respondents in the category 5 Nos.

Total Traffic 23938 tons

Traffic handled by Sample entities 365 tons

Proportion of respondents saying yes for diverting traffic to Kollam

0.1096 Sample proportion

Estimate taken by Deloitte (Null hypothesis H0: p = 0.125) 0.125 Assumed proportion

Std. Error of estimate 0.1397 From sample

Calculated value of t statistic -0.1103 From sample

prob- value (significance) 0.9175 Far greater than 0.05

Result

As seen from the table, the prob-value for Null Hypothesis (H0: p = 0.125) to be true comes to be 0.9175. This value is far greater than the significance level of 0.05 and hence we can accept the Null hypothesis and accordingly expect 12.5% of traffic for this category to be diverted to Kollam Port.

Therefore, expected Traffic = 2992 (12.5% of 23938) tons

Table 10: Hypothesis test for Raw Cashew Nuts

Summary Statistics on Raw Cashew Nuts

Particulars Value Units / remarks

No. of respondents in the category 6 Nos.

Total Traffic 372497 tons

Traffic handled by Sample entities 65600 tons

Proportion of respondents saying yes for diverting traffic to Kollam

0.7927 Sample proportion

Estimate taken by Deloitte (Null hypothesis H0: p = 0.80) 0.80 Assumed proportion

Std. Error of estimate 0.1655 From sample

Calculated value of t statistic -0.0442 From sample

prob- value (significance) 0.9664 Far greater than 0.05

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Result

As seen from the table, the prob-value for Null Hypothesis (H0: p = 0.80) to be true comes to be 0.9664. This value is far greater than the significance level of 0.05 and hence we can accept the Null hypothesis and accordingly expect 80% of traffic for this category to be diverted to Kollam Port.

Therefore, expected Traffic = 297997.6 (80% of 372497) tons

Table 11: Hypothesis test for Newsprint

Summary Statistics on Newsprint

Particulars Value Units / remarks

No. of respondents in the category 2 Nos.

Total Traffic from Hinterland 8680 tons

Traffic handled by Sample entities 6950 tons

Proportion of respondents saying yes for diverting traffic to Kollam

0.7597 Sample proportion

Estimate taken by Deloitte (Null hypothesis H0: p = 0.70) 0.70 Assumed proportion

Std. Error of estimate 0.3021 From sample

Calculated value of t statistic 0.1976 From sample

prob- value (significance) 0.8757 Far greater than 0.05

Result

As seen from the table, the prob-value for Null Hypothesis (H0: p = 0.70) to be true comes to be 0.8757. This value is far greater than the significance level of 0.05 and hence we can accept the Null hypothesis and accordingly expect 70% of traffic for this category to be diverted to Kollam Port.

Therefore, expected Traffic = 6076 (70% of 8680) tons

Estimated figures based on judgemental analysis

Some of the commodities are handled completely by 1 or 2 players in the hinterland of Kollam port. These players form the entire population for each of such categories and we have taken their opinions on their willingness to divert the traffic to Kollam port. Therefore, for these figures there is no need for statistical analysis as the entire population rather than a sample has been covered through primary survey. Hence, traffic suggested by these players, has been taken as baseline figure for such commodities. The figures are furnished in Table 12 below:

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Table 12: Estimated figures A

Estimated Figures A

Commodity No. of players

Traffic Handled (tons)

Willingness to divert traffic to Kollam port

Baseline figure taken (tons)

Titanium Di Oxide 2 9200 Yes 9200

Selemanite 1 400 Yes 400

Blood Bags 1 140 Yes 140

Clay 1 40000 Yes 40000

Further, for some of the categories, all the players in the sample for particular category stated their

willingness to divert the respective traffic to Kollam port. This imples, that all the traffic from industry for

that particular category will be diverted to Kollam port. However, based on inputs received and

qualitative analysis of other factors, we have taken a little smaller than suggested traffic as baseline

figures for such commodities. The figures are furnished in Table 13 below:

Table 13: Estimated figures B

Estimated Figures B

Commodity No. of respondents

Traffic Handled (tons) by sample entities

Total traffic potential (tons)

Baseline figure taken (tons)

Timber ( Kerala) 2 24000 48000 48000

Timber ( Tamil Nadu)

3 1500000 128000 25600

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Annexure 3 : Growth rate taken for the various commodities

Commodities from primary hinterland

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Commodities from secondary hinterland

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Annexure 4 : Traffic projections for various commodities

Projections of major commodities from primary hinterland

Raw cashew nuts ( imports)

The Indian cashew industry lags in competitiveness due to its reliance on imported raw cashew kernels and scattered non-mechanized processing sector that depends on labourers. India imports more than half of its requirement of raw cashew, owing to the poor productivity of its cashew plantations. For e.g the productivity of Vietnam is 2.8 tonne cashew nuts per hectare, while the average productivity in India is only 663 kg per hectare

The industry is dominated by small-scale, single-owner or family-owned businesses. Over two-thirds of the processing units are in Kerala, while the remainder are scattered across other states. Together, these units have an annual processing capacity of over 800,000 tonne

The import of raw cashew nuts into India rose from 2.49 lakh tonnes in 2000-01 to a 6.05 lakh tonnes in 2008-09, showing a CAGR growth rate of around 11%. The lion share of imported raw cashew (upto 60%) was utilized by processing units in Kerala which has its hub in Kollam.

In future context, the shortage of indigenously produced cashew nuts would compel the units to import raw cashew nuts to operate their units to optimum level.

Accordingly, one can safely assume a y-o-y growth rate of around 5% in the next five years on a lower estimate basis.

The Kerala government has set up a special agency for promoting cashew cultivation, which aims at achieving a quantum jump in the availability of raw cashew nuts in the State. Efforts are on to increase the cashew nuts yields which hopefully would bear results in the next five years.

Accordingly for obtaining the low, medium and high growth scenario for the purpose of forecasting of the traffic, the following has been the indicative growth rates taken.

Scenario Growth rate

2010-2015

2016-2020

2021-2025

2026-2030

2031-2035

2036-2040

Low 5% 3% 3% 3% 3% 3%

Figure 10 : Import trends of country’s raw cashew

nuts Source: www.dacnet.nic.in and Cashew Export Promotion Council of India

Figure 11 : Import trends of raw cashew nuts

through Cochin Port

Source: Cochin Port Trust

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Medium 8% 5% 5% 5% 5% 5%

High 10% 6% 6% 6% 6% 6%

The growth of raw cashew nuts import cargo in Thankassery port has been worked out as under

In’000 tonnes

Baseline open cargo as on 2009

Scenario 2015 2020 2025 2030 2035 2040

298 Low 399 462 536 621 720 835

Medium 472 603 769 982 1,253 1,599

High 527 706 944 1,264 1,691 2,263

Cashew kernels (exports)

The last seven years CAGR growth rate of cashew kernel exports for Kerala has been around 4.8% and that for India has been 3.62%. Kerala alone accounts around 60% of the cashew kernel exports.

The ratio of export-domestic cashew nut consumption, which once stood at 60:40, has now reached 40:60 due to growing domestic cashew consumption. In 2003, India exported 1.26 lakh tonnes of cashew kernels and consumed 88,426 tonnes in the domestic market. In 2008, the country exported 1.10 lakh tonnes of kernel and consumed 1.92 lakh tonnes in the domestic market

Increase in the domestic per capita income; rise in the number of middle-class households; increased use in sweets, confectionary, etc; and rapid growth of modern retail outlets are some of the main reasons for this growth story in domestic consumption.

Processing capacity by cashew entrepreneurs has gone up substantially from eight lakh tonnes a year to 13 lakh tonnes. But the total exports are consistent.

Figure 12 : Export trends of country’s cashew kernels

Source: www.dacnet.nic.in and Cashew Export

Promotion Council of India

Figure 13 : Export trends of raw cashew nuts

through Cochin Port

Source : Cochin Port Trust

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Accordingly one can assume a consistent quantum of exports to the tune of around 60,000 tonnes for the next five years and given the trend of a strong domestic consumption based on higher per capita income.

In subsequent years, based on the assumption that the domestic consumption will increase, the exports will decrease and the same has been reflected over the slab period of 5 years taken till 2040.

The following is the growth pattern taken in a block of 5 years for cashew kernel exports

Scenario Growth rate

2010-2015

2016-2020

2021-2025

2026-2030

2031-2035

2036-2040

Low -3% -3% -3% -3% -3% -3%

Medium -1% -1% -1% -1% -1% -1%

High 0% 0% 0% 0% 0% 0%

The growth of cashew kernel export cargo in Thankassery port is indicated below

In’000 tonnes

Baseline open cargo as on 2009

Scenario 2015 2020 2025 2030 2035 2040

59 Low 49 42 36 31 27 23

Medium 56 53 51 48 46 43

High 59 59 59 59 59 59

Marine food exports

The marine exports growth rate over the past five years has been at a CAGR of around 7.21% for Kerala and 7.91% for India.

Figure 14 : Export trends of country’s marine food

Source: MPEDA

Figure 15 : Export trends of marine food through

Cochin Port

Source: MPEDA

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The quantum of exports from Kollam is from a group of around 6 exporters who have indicated a positive export business growth outlook to the range of around 20 to 30%.

However a very conservative growth rate has been taken for forecasting purposes inspite of the very positive outlook and a very high growth rate predicted by the marine exporters

The following is the growth pattern taken in a block of 5 years for marine food exports

Scenario Growth rate

2010-2015

2016-2020

2021-2025

2026-2030

2031-2035

2036-2040

Low 1% 1% 1% 1% 1% 1%

Medium 3% 3% 3% 3% 3% 3%

High 4% 4% 4% 4% 4% 4%

The growth of marine export cargo in Thankassery port is indicated below

In’000 tonnes

Baseline open cargo as on 2009

Scenario 2015 2020 2025 2030 2035 2040

15 Low 16 17 18 19 20 21

Medium 18 21 24 28 33 38

High 19 23 28 34 42 51

Timber logs

The import of logs by the Kollam / Trivandrum timber dealers through Tuticorin port is to the extent of around 48,000 to 50,000 tons per annum. The quantum of these imports is expected to be more or less steady for the next fifteen years. The growth trends are primarily based on the feedback indicated by the timber importers.

The following is the growth pattern taken in a block of 5 years for timber logs from the primary hinterland ( Kerala importers)

Scenario Growth rate

2010-2015

2016-2020

2021-2025

2026-2030

2031-2035*

2036-2040*

Low 1% 1% 1% 1% 1% 1%

Medium 2% 2% 2% 2% 2% 2%

High 3% 3% 3% 3% 3% 3%

* - For the particular block of the five years, growth has been considered only for the years of, 2035 and 2040

The growth trends of timber cargo from the primary hinterland in Thankassery port is indicated below

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In’000 tonnes

Baseline open cargo as on 2009

Scenario 2015 2020 2025 2030 2035 2040

48 Low 51 54 56 59 60 60

Medium 54 60 66 73 74 76

High 57 66 77 89 92 95

Sand

Due to the restrictions in mining of sand in Kerala, sand is usually sourced through other states including Gujarat. Presently sand is being moved from Gujarat to Thankassery through coastal movement. As per the feedback obtained, the sand shipments will tend to increase. However the growth has been kept on a conservative basis and has been increased as per the respective scenario growth rate only once in the block of five years. The following is the growth pattern taken-

Scenario Growth Rate in %

Low 3%

Medium 5%

High 8%

The growth trends of sand in Thankassery port is indicated below In ‘000 tonnes

Baseline open cargo as on 2009

Scenario 2015 2020 2025 2030 2035 2040

72 Low 86 100 116 119 123 126

Medium 96 123 157 165 173 182

High 114 168 247 266 288 311

Waste paper / newsprint

On interaction with some of the paper mills, it was indicated that they are planning expansion of their production capacities. Given Kerala’s high literacy rates, the extensive reading habits of the local population one would definitely perceive an increase in the imports. However due to the limited numbers of such importers in the hinterland the growth rate applied is only to the extent of once in the block of five years. The following is the growth pattern taken-

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Scenario Growth Rate in %

Low 5%

Medium 15%

High 20%

Accordingly the growth trends of waste paper / newsprint in Thankassery port is mentioned below In ‘000 tonnes

Baseline open cargo as on 2009

Scenario 2015 2020 2025 2030 2035 2040

5.3 Low 5.5 5.8 6.1 6.4 6.7 7.1

Medium 6.1 7.0 8.0 9.2 10.6 12.2

High 6.3 7.6 9.1 10.9 13.1 15.8

Spices exports Pepper

Idukki accounts for around 28,000 tonnes of pepper production which is almost 60 per cent of pepper production from the Kerala State, with an average CAGR of 16% for the past five years.

Of the 28,000 tonnes of pepper produced in Idukki, around 17,000 to 18,000 tonnes (60-64%) are exported.

The Spices Board has got the approval from the National Horticulture Mission for re-plantation and rejuvenation of pepper in Idukki district for five years from 2009-10. The objective of the scheme is to increase the production to one lakh tonnes in five years from the present 28,000 tonnes in Idukki, which accounts for 60 per cent of pepper production from the State. The scheme is to replant old

Figure 16 : Production trends of pepper in Idukki district

Source: Spices Board

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and senile as well as disease affected pepper vines with disease free high yielding pepper vines in about 68,000 hectares

Accordingly by 2014, under ideal conditions and given the serious commitment of the Spice Board, one may foresee an increase in pepper production in Idukki to the tune of 1,00,000 tonnes. On a realistic note, given the various constrains in implementation of schemes, the increase in the production may not reach one lakh tonne but say around 75,000 tonnes.

Accordingly if we maintain that 60% of the 75,000 tonnes is exported, by 2014, the actual exports from Idukki may reach to the level of 45,000 tonnes.

In terms of future growth rate of pepper, the experts in the trade have indicated that a y-o-y growth rate of around 8 % can be expected; however for the purpose of the traffic projections the following growth rate has been assumed.

Scenario Growth rate

2010-2015

2016-2020

2021-2025

2026-2030

2031-2035

2036-2040

Low 2% 2% 2% 2% 2% 2%

Medium 4% 4% 4% 4% 4% 4%

High 6% 6% 6% 6% 6% 6%

In ‘000 tons

Baseline open cargo as on 2009

Scenario 2015 2020 2025 2030 2035 2040

2.61 Low 2.9 3.2 3.6 4.0 4.4 4.8

Medium 3.3 4.0 4.9 6.0 7.2 8.8

High 3.7 5.0 6.6 8.1 9.8 12.0

Cardamom and Spice Oils & Oleoresins

The quantum of exports of the referred commodities expected through Kollam is not much.

The all India CAGR export rate for both Cardamom and Oils & Oleoresins is 4% in the last four years.

Since Kerala accounts for 30% and 80% of the Cardamom and Oils & Oleoresins exports, we can safely assume a growth rate of 4% y-o-y for the purpose of traffic estimation in medium scenario.

In ‘000 tons

Baseline open cargo as on 2009

Scenario 2015 2020 2025 2030 2035 2040

0.30 Low 0.33 0.37 0.41 0.46 0.50 0.55

Medium 0.38 0.46 0.56 0.70 0.82 1.00

High 0.42 0.56 0.75 1.07 1.35 1.80

Rubber ( exports & imports)

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Kerala accounts for almost 91 to 92% of the all India rubber production. Accordingly a bulk of the exports is routed through Kerala.

While the production of natural rubber has witnessed a CAGR growth rate of 5.14% from 2000-01 to 2006-07; the exports of natural rubber have been fluctuating.

The export quantum also depends on the price it fetches at the international market, which is very dynamic. Hence any increase in the international rubber market will witness an increase in the exports.

It would be thus a bit difficult to estimate the exact forecast for the rubber commodities both import and export of natural rubber, synthetic and reclaimed rubber.

Given the volatile EXIM nature of rubber, the following conservative growth estimate has been taken

Scenario Growth rate

2010-2015

2016-2020

2021-2025

2026-2030*

2031-2035*

2036-2040*

Low 2% 2% 2% 2% 2% 2%

Medium 5% 5% 5% 5% 5% 5%

High 7% 7% 7% 7% 7% 7%

* - For the particular block of the five years, growth has been considered only for the years of 2030, 2035 and 2040

The growth of exports (natural rubber and reclaimed rubber) and imports (natural rubber and synthetic rubber) cargo in Thankassery port is indicated below Imports

In ‘000 tonnes

Figure 17 : Exports trends of natural rubber ( Kerala vis-à-vis India)

Source: Rubber Board

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Baseline open cargo as on 2009

Scenario 2015 2020 2025 2030 2035 2040

1.47 Low 1.62 1.79 1.97 2.05 2.10 2.14

Medium 1.97 2.51 3.20 3.36 3.53 3.71

High 2.20 3.09 4.33 4.63 4.96 5.31

Exports In ‘000 tonnes

Baseline open cargo as on 2009

Scenario 2015 2020 2025 2030 2035 2040

1.40 Low 1.58 1.74 1.92 1.96 2.00 2.04

Medium 1.87 2.39 3.05 3.21 3.37 3.53

High 2.10 2.94 4.13 4.42 4.73 5.06

Cashew Nut Shell Liquid (exports)

Cashew nut shell liquid (CNSL) is a natural chemical product, which finds application in the paint, automobile and foundry industry. However, exports of the commodity had been languishing for several years due to low global prices and the difficulty in handling and transporting the highly corrosive chemical.

CSNL is a by-product of the cashew nut processing. In most cases due to the nature of the industry, CNSL is not actively sourced during the conversion. CNSL is produced in the 'steam cooking method 'of conversion, which cooks the hard shell in hot steam before taking out the nut. The shell is not destroyed unlike the alternate method of 'drum roast'.

CSNL production is increasing as more processors are turning to the 'steam cooking method' of processing instead of the "drum roast method'.

Over the past 18 years, the exports of CSNL on an all India level basis have shown an increase to the tune of 1.17%.

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Figure 18 : Exports trends of Cashew Nut Shell Liquid ( Kerala vis-à-vis India)

Source : www.dacnet.nic.in and Cashew Export Promotion Council of India

However export of cashew nut shell liquid, which is a by-product of the cashew nut processing industry, is recording a commendable increase thanks to government incentives in the form of duty credit. With the government including CNSL in the Vishesh Krishi Upaj Yojana (VKUY), exports has been looking good.

The US continues to be the major market and imports nearly 95-98% of the Indian commodity. However, new markets like China, Korea, Japan and the UK are catching up.

Accordingly, a conservative y-o-y increase rate of 4% has been taken for the first five years under the medium growth scenario and the same being stabilized in the next 5 years and again a 4% increase in the next 10 years. The rationale behind the increase in the 4% in the first five years stems from the initiatives of the government and the willingness of the cashew processing units to shift to steam cooking method and realization of the export potential of CSNL.

Scenario Growth rate

2010-2015

2016-2020

2021-2025

2026-2030

2031-2035

2036-2040*

Low 2% 0% 2% 0% 2% 0%

Medium 4% 0% 4% 0% 4% 0%

High 6% 0% 6% 0% 6% 0%

Accordingly, the growth of CSNL cargo in Thankassery port is indicated below In ‘000 tonnes

Baseline open cargo as on 2009

Scenario 2015 2020 2025 2030 2035 2040

6.50 Low 7.18 7.32 7.92 8.24 8.91 8.91

Medium 8.22 8.22 10.01 10.01 12.17 12.17

High 9.22 9.22 12.34 12.34 16.51 16.51

Clay

Clay is primarily sold by English India Clays which has demonstrated a dynamic growth over the past 4 years, with close to 14 per cent CAGR. But movement of any mineral (particularly export) is subject to vagaries of market and also determined by Government policies. Clay has a wide range of applications spanning diverse segments including paint, paper, inks, plastics, fiberglass, catalysts, etc. & therefore has a good market potential

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Considering that the clay movement is dependent on just one company, a conservative growth rate of 6% in the first year of each of the 5 year slab has been taken to enable our forecasts of normal scenario to hold good in event of unforeseen circumstances.

The forecast has been applied for both coastal and export movement of clay.

However with the expected commissioning of Vizhingham port and the company location being based in Trivandrum, after 2016, it has been assumed that the export cargo would be diverted to Vizhingham.

The growth of clay cargo in Thankassery port is indicated below Clay ( EXIM)

In ‘000 tonnes

Baseline open cargo as on 2009

Scenario 2015 2020 2025 2030 2035 2040

10

Low 10 - - - - -

Medium 11 4 - - - -

High 11 13 10 - - -

Clay ( Coastal)

Baseline open cargo as on 2009

Scenario 2015 2020 2025 2030 2035 2040

30 Low 31 32 34 35 36 38

Medium 32 34 36 38 40 43

High 32 35 38 41 44 48

Titanium Di Oxide

It represents the exports from two companies viz Kerala Minerals & Metals Ltd (KMML) and Travancore Titanium Products Ltd (TTPL). TTPL have just begun with exports to the tune of 2000 tons p.a. and are anticipating an increase of exports to around 4000 tons after 5 years. We can assume the same to be constant thereafter, since market is unpredictable. In terms of exports from KMML , we have assumed a 6% growth in the first year of the five year slab period in absence of sufficient information.

Since TTPL is based in Trivandrum, we are assuming the cargo for Thankassery will be diverted to Vizhingham, once the same is commissioned.

The growth of Titanium di Oxide in Thankassery port is indicated below In’000 tonnes

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Baseline open cargo as on 2009

Scenario 2015 2020 2025 2030 2035 2040

Titanium Di-Oxide (KMML)

7.2 Low 7.5 7.8 8.1 8.4 8.8 9.1

Medium 7.6 8.1 8.6 9.1 9.6 10.2

High 7.8 8.4 9.1 9.8 10.6 11.4

Titanium Di-Oxide

(TTPL)

2.0 Low 2.06 - - - - -

Medium 2.10 0.89 - - - -

High 2.14 2.49 2.00 - - -

Finished fertilizers (Urea and Muriate of Potash)

Domestic capacities in Kerala and production of fertilizers have stagnated for more than a decade. The demand for fertilizers on the other hand has been rising. This has resulted in dependence on imports of finished fertilizers. , thereby increasing the subsidy requirement further.

Imports of Muriate of Potash through Cochin port over the last five years grew at a CAGR of 14.72%, while the y-o-y growth of urea in 2008-09 was more than 150% over the previous year.

Kerala has been known to have shortage of fertilizers and is dependant on external sources for its fertilizers needs.

Based on the above considerations and the cargo indicated by Aspinwall, a conservative growth rate of around 5% under medium growth scenario has been taken for the purpose of traffic forecast.

Scenario Growth rate

2010-2015

2016-2020

2021-2025

2026-2030

2031-2035*

2036-2040*

Low 2% 2% 2% 2% 2% 2%

Medium 5% 5% 5% 5% 5% 5%

High 8% 8% 8% 8% 8% 8%

* - For the particular block of the five years, growth has been considered only for the years of 2035 and 2040. Accordingly the likely growth of urea and muriate of potash is indicated below

In’000 tonnes

Baseline open cargo as on 2009

Scenario 2015 2020 2025 2030 2035 2040

Finished 125 Low 141 155 172 189 193 197

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fertilizers Medium 168 214 273 348 366 384

High 198 291 428 629 680 734

Cement

The growth of the cement market is taken as 1.3% more than the country GDP growth rate. In addition, if we consider the regional market of Kerala, the GDP growth rate has been quite strong with a y-o-y growth rate of more than 8% for the past few years.

Accordingly, given the spurt of construction activities and other ancillary infrastructure projects being planned in the region, the cement consumption is bound to increase.

For the purpose of calculation, the growth rate under the normal scenario has been taken at a conservative level of 7%.

Scenario Growth rate

2010-2015

2016-2020

2021-2025

2026-2030

2031-2035

2036-2040

Low 3% 3% 3% 3% 3% 3%

Medium 7% 7% 7% 7% 7% 7%

High 9% 9% 9% 9% 9% 9%

Based on the above, the likely growth trends of cement is indicated below

In ‘000 tonnes

Baseline open cargo as on 2009

Scenario 2015 2020 2025 2030 2035 2040

Cement 600 Low 637 738 855 992 1,150 1,333

Medium 687 963 1,351 1,895 2,658 3,728

High 713 1,097 1,688 2,597 3,995 6,147

Projections of major commodities from secondary hinterland

Timber logs

On interaction with some of the leading indenting agents who arrange for the procurement of timber logs on behalf of the saw mills, it was indicated that a significant bulk of around 1.2 to 1.5 lakhs is routed towards Shencottai However of these 1.5 lakhs, not all cargo is expected to be diverted towards the Kollam port, since the infrastructure at Tuticorin is already well established.

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Figure 19 : Import trends of timber in the districts of Kanyakumari, Thiruneveli, Virudhunagar, Tuticorin

and Madurai

Source: EXIM information obtained from Shivsanth Consultancy, Tuticorin

A certain percentage of the cargo (of 1.5 lakh tons) can be diverted initially and based on the positive feedback, the diversion of the cargo will only increase (under the presumption that the operations at Thankassery are efficient). However one does not foresee the entire diversion of cargo and the importers may at best divert cargo to a maximum extent of 50% of the baseline cargo.

The likely growth trend of timber logs from Tamil Nadu hinterland to Thankassery port is indicated below

In’000 tonnes

Baseline open cargo as on 2009

Scenario 2015 2020 2025 2030 2035 2040

128 Low 14 23 25 27 30 30

Medium 22 44 51 59 68 68

High 31 76 92 110 132 132

Marbles, tiles The growth rate considered under medium scenario is 15% in the first year of the five year slab period. The likely growth trend of marbles from Tamil Nadu hinterland to Thankassery port is indicated in the subsequent table.

In ‘000 tonnes

Baseline open cargo as on 2009

Scenario 2015 2020 2025 2030 2035 2040

18 Low 20 22 24 26 29 35

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Baseline open cargo as on 2009

Scenario 2015 2020 2025 2030 2035 2040

Medium 21 24 27 31 36 48

High 22 26 31 37 45 64

Food/Agricultural Products & Spices

This category covers variety of food and agricultural products and spices as well. The main products are maize, corn, chillies, onions, gherkins, papads, etc.

Three companies, viz. Concord Exports, C.M.S. Balan & Co. and Deva Chitra Exports, who have expressed their interest in using Thankassery port contribute to nearly 90% of the total food & agricultural products and spices exports for Madurai district. The growth of their export volumes is extra-ordinarily high. It ranges from 25% to almost 100% over the last three years.

Therefore to arrive at more reasonable export growth rate, export statistics for a 5-year period from 2002-03 to 2007-08 from the Agricultural and Processed Food Products Export Development Authority (APEDA) website have been used to calculate a CAGR for select commodities. The CAGR so arrived is 6.54%.

The growth rate considered under normal scenario is 7% in the first year of the five year slab period. The likely growth trend of food / agricultural products and spices from the identified Tamil Nadu hinterland to Thankassery port is indicated below

In ’ 000 tonnes

Baseline open cargo as on 2009

Scenario 2015 2020 2025 2030 2035 2040

17 Low 18 19 20 20 21 22

Medium 19 20 21 23 24 26

High 19 21 23 25 28 31

Textiles, yarns and fabrics

This category of exports from Madurai and Theni districts consists of cotton yarn, garments, fabrics, made-ups, terry towels, etc.

During 2007-08, Indian Textile and Clothing (T&C) exports were valued at US $ 22.4 billion of which Textile exports accounted for US $ 12.7 billion and Garment exports accounted for US $ 9.7 billion.

The export earnings from the T&C industry are estimated to increase to US $ 55 billion by 2012. (Source: Report of the Working Group on Textiles & Jute Industry for the Eleventh Five Year Plan)

T&C exports have increased at a CAGR of 12% from 2005-06 to 2007-08.

During the last fiscal (period April – December 2008) T&C exports have missed the expected growth targets on account of economic slowdown in major T&C export markets.

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As a result, during Apr – Dec 2008 India’s garment exports grew by 7% (y-o-y) as against a growth of 9% (y-o-y) in FY08 whereas India’s Textile exports declined by 4% (y-o-y) as against a growth of 21% (y-o-y) in FY08.

The companies so contacted in Tamil Nadu have registered a modest growth and are optimistic over the long run on their exports. Considering all the above factors, a growth rate( for normal scenario) of 8% in the first year of the five year slab period has been adopted.

The likely growth trend of textiles, yarns and fabrics from the identified Tamil Nadu hinterland of Theni and Madurai to Thankassery port is indicated below

In ‘000 tonnes

Baseline open cargo as on 2009

Scenario 2015 2020 2025 2030 2035 2040

23 Low 24 25 26 28 29 31

Medium 25 27 29 31 34 36

High 26 29 32 36 40 45

Cement

Import of Cement is mostly in the district of Madurai. The quantity is close to 16,000 tonnes

annually.

The respondents during the primary survey included S.S.N. Trading Company, Triumph Enterprises

And Triumph Enterprises & Investment Pvt Ltd and they together import 7,000 tonnes of the total

imports and are open to diversion of cargo from the Thankassery port.

The growth rate under normal scenario has been taken at around 10% in the first year of the five

year slab period. The indicative growth trend of cement routed to Madurai is indicated below In ‘000 tonnes

Baseline open cargo as on 2009

Scenario 2015 2020 2025 2030 2035 2040

16 Low 17 18 19 19 20 21

Medium 18 19 21 23 26 28

High 18 21 24 28 32 37

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Annexure 5 : Route of roads, canal and railway line near

Port area

The drawing of the route profile of roads, canal and railway line near the port area as prepared by Atlas Survey Engineering Systems is attached below this page

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Annexure 6 : Topography and contour map – port area

The topography / contour map of the port area as prepared by Atlas Survey Engineering Systems is attached below this page

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Annexure 7 : Bathymetric chart

The Bathymetric chart for the Thankassery harbour dated 13th October, 2007 is attached below this page

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Annexure 8 : Borehole tests results

The borehole details made available by Harbour Engineering Department based on actual bore results at pile locations number 3 and 15 of cargo wharf are attached below this page

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Annexure 9 : Rapid Environmental Impact Assessment

The REIA report prepared by Centre for Environment and Development, Trivandrum is attached below this page

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Annexure 10 : Port development layout

The existing facilities map layout prepared by Harbour Engineering Department, GoK and the development layout plan prepared by MEC Consultants are attached below this page

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Annexure 11 : Financial projections

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Annexure 12 : Queries received from DoP on the draft

final report submitted

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Annexure 13 : Clarifications submitted in the draft final

report

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Table of Contents for the clarifications to the queries raised on the draft DFR

Query 1 - Whether the project costing Rs. 40 Crores in 1st phase for development at Kollam port can

be carried out by the Government of Kerala without private participation – a SWOT. ...................... 130

Query 2 - If initial investment is done by government as per point above, whether operation is to be

given on BOT – a SWOT. ................................................................................................................. 130

Query 3 - The hinterland connectivity using backwater and waterways, road / rail connectivity may be

included in the DFR with cost ......................................................................................................... 135

Query 4 - Reducing the time to start second phase – ( in the draft report it has been indicated as

2025). ............................................................................................................................................ 144

Query 5 - If 20,000 or more DWT vessels need to come what need to be done and costs as the future

requirements are larger vessels to reduce cost of transportation .................................................... 144

Annexures (Profit & Loss Account Statement and Financial Indicator statements)

Scenario Option Annexure number

Scenario 1 - The rail and road connectivity cost to be

borne by 100% by the Private Developer through SPV

Option 110 13.1

Option 211 13.2

Scenario 2 - 50% of the rail and road connectivity cost is

to be borne by the Private Developer through SPV and

the balance 50% will be incurred by the Government.

Option 1 13.3

Option 2 13.4

Scenario 3 - 50% of the rail connectivity cost to be borne

by the Private Developer through SPV, while the 100%

road connectivity cost would be borne by the

government

Option 1 13.5

Option 2 13.6

Scenario 4 - 100% of the rail and road connectivity cost

will be borne by the Government

Option 1 13.7

Option 2 13.8

Option 1 - maximum vessel that can berth at the port is of size of 20,000 DWT Option 2 - maximum vessel that can berth at the port is of size of 15,000 DWT

10 Option 1 - maximum vessel that can berth at the port is of size of 20,000 DWT 11

Option 2 - maximum vessel that can berth at the port is of size of 15,000 DWT

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Query 1 - Whether the project costing Rs. 40 Crores in 1st phase for development at Kollam port can be carried out by the Government of Kerala without private participation – a SWOT.

Query 2 - If initial investment is done by government as per point above, whether operation is to be given on BOT – a SWOT.

Findings for the queries 1 and 2

The Government of Kerala has already developed facilities at Thankassery port. In order to facilitate

commercial operations of the port, additional development would be required which entails for an

investment of around Rs. 40 Cr. While the government would build the facilities and would not dilute its

share in the ownership of the port, it would be open to outsourcing of the operation of the port to an

experienced third party.

The pros and cons of such an arrangement has been sought to be reviewed and is indicated below

SWOT analysis for query 1 - Whether the project costing Rs. 40 Crores in 1st phase for development at

Kollam port can be carried out by the Government of Kerala without private participation.

Strengths Weakness

1. The government would bank upon its own

resources (financial and technical) for building

the facilities and hence would not have to

depend on a third party.

2. For obtaining any approval / clearance from a

particular state regulatory or government

agency, the same would be expedited earlier

by the state government through its inter-

departmental connections. Comparatively the

time taken for a private developer in obtaining

the same set of clearances may be more.

3. With the funds already been approved for

development of infrastructure facilities etc,

the disbursement might be faster for the

government than for a private party who

would be required to raise his own funds for

the project.

4. The entire port has been completed by the

state government so far and only a Rs. 40

crore investment is pending for phase 1. It

makes sense that the government completes

this (provided it is able to provide funds) and

1. Any delay in approval and subsequent

disbursement of the allotted funds might lead

to possible postponement of the completion

of the facilities for phase - 1

2. In the event of a third party developing the

facilities, there would have been checks and

penalties based on completion of certain

milestones, which would have enforced the

timely completion of the project. In the

proposed scenario, the government cannot

impose a penalty on itself. In the absence of

any strict milestone completion schedule /

deadlines, there might be possibilities of

completion work getting delayed.

3. Any delays in the completion of the facilities

for Phase –I might result into cost –over runs

leading to the project cost increasing from

anywhere between 5 to 25%. This has

happened in the past for Kollam port.

4. In the event of purchase of material handling

equipments which is part of the Rs. 40 Cr

investment, there might be delay in obtaining

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Strengths Weakness

hands it in full readiness to a private party for

operating the port instead of asking the

private party to invest a small amount and

getting him to develop the port to that extent.

the same due to drafting of the specifications,

floating tender for the purchase, evaluation of

the vendors and the final selection of the

vendor for the purchase. Adherence to the

strict governmental norms may lead to the

delay in the purchase of the equipment.

Accordingly, the purchase of the material

handling equipment would be best left to the

private party selected to purchase and

operate

Opportunities Threats

1. The proposed arrangement would lead to the

government having full control in the

development of the facilities. All assets would

be under government ownership instead of a

small amount of Rs. 40 Crore being under

private ownership.

2. The government can prioritize its plans for

various port facilities and accordingly invest in

the facility deemed to be more important than

the rest.

1. Development of an infrastructure project

through governmental resources may not

necessarily be aimed for commercial

objectives. The political-social objectives may

over-ride the commercial aspects and the

project may end up as an exercise purely for

employment generation and other social

obligations.

2. There might be a scenario that the funds

allotted to a particular project may get

diverted for another project of similar nature

and to which a higher priority has been

assigned by the State Government. This will

lead to a delay in the development of the

project for which the funds were earlier

earmarked and whose development would

commence only when fresh funds would be

reallocated towards it. Under such

circumstances, the investment is better left to

the private parties to make.

3. Good road connectivity is essential for smooth

evacuation and movement of cargo. Usually

development of approach roads is undertaken

by governmental agencies. In the event the

government falls short of the funds for

approach road development (after having

invested in the development of the port), the

project will run the risk of not yielding

sufficient returns without proper connectivity..

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SWOT analysis for query 2 - If initial investment is done by government as per point above, whether

operation is to be given on BOT.

The investment of Rs. 40 Cr (indicated in the earlier point) includes Rs. 20 cr of material handling

equipment. For the operation by the third party, two scenarios may arise –

1. Scenario 1 – Wherein the private operator is asked to invest in the material handling equipment ( Rs.

20 Cr) and operate the same on BOT basis

2. Scenario 2 – The government invests in the material handling equipment and outsources the

working of the same to a private party for a fixed tenure of years.

The underlying factors (pros and cons) for both the scenarios are captured in the table below –

Strengths Weakness

The private party invests in the material

handling equipment of Rs. 20 Cr

1. In the event the private party is made to invest

in the material handling equipment also, the

application of private capital will free up

government funds ( to that extent of the funds

infused by private party) for other priority

projects including on access infrastructure and

protective works relating to port extension

and on renovation projects

2. The functions can be performed at a price that

is substantially lower than the cost of

conducting them in the public sector

3. There would be a large field for competitive

bidding

4. The transfer of risks for construction, finance,

and operation of the facility to the private

operator

5. The attraction and use of possible foreign

investment and technology

Common factors for both the scenarios

6. Considering that the government would not

The private party invests in the material

handling equipment of Rs. 20 Cr

1. In the event the private operator is asked to

invest money on obtaining the material

handling equipment and installing the same

at the port, the perceived costs are high for

the government. Besides the borrowing cost,

there is a profit element in the equity portion

of the financing, which is higher than the debt

cost. That is the price the government will

pay for passing off the risk to the private

sector

2. The government would have a lesser control

in the day to day operations. This can

however be mitigated by putting in adequate

safeguards in the concession agreement.

3. The need for continuing close government

regulation and oversight

Other common factors for both the scenarios

4. In the event of traffic falling below the

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have the requisite experience in port

operations, outsourcing of the same to an

experienced third party operator would

ensure that the respective capabilities (that of

the government and of the private party)

would be leveraged appropriately.

7. Outsourcing of operations to an experienced

operator would lead to efficiency and smooth

functioning of the port.

8. The government can set forth KPI (Key

Performance Indicators) and can penalize the

operator on non –adherence of the same.

9. The government would not be required to

spend resources on the marketing of the port,

which would be best taken by the private

operator.

10. The port can provide an improved customer

service quality with a competitive price

expected growth, the port operator would

not expect the anticipated revenue growth

and may not recover his costs. In such an

event, after the contract of the private

operator has, there may not be new interest

amongst private parties for the port

operations. This can however be mitigated by

the Government providing additional

incentives for cargo to come to the port and

ensuring its continued existence.

5. Winning bids are sometimes based on

unrealistic financial projections, placing the

sustainability of the agreement in jeopardy

Opportunities Threats

The private party invests in the material

handling equipment of Rs. 20 Cr

1. There are multiple captive cargo generators

interested in the port which will ensure

committed cargo flow to the port. The

Government can give a mandate to the

captive cargo generator that he must also

cater to third party cargo as and when these

also come to the port for loading / unloading.

Common factors for both the scenarios

2. The proposed model can be one of the PPP

models which can be emulated in other

upcoming ports of the state.

3. Outsourcing the operations to a private party

will allow the government to benchmark or

compare their own operations (existing /

The private party invests in the material

handling equipment of Rs. 20 Cr

1. Contracting out may create a monopoly for

those activities, which would be contrary to

the public interest, unless there is a proper

regulatory oversight framework.

2. Change of political party, change of

organizational control, anti-privatization

backlashes (nationalization), unexpected new

tax regulations, and other governmental

actions could make comprehensive the BOT

scheme much less attractive

Common factors for both the scenarios

3. If the number of potential bidders is limited, a

meaningful comparison of the bids may not

possible. This can be mitigated by a well

planned marketing effort that ensures

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future) in with those of what is expected to

be more efficient private sector operations.

That can lead to improvements being made in

the state government port sector operations

maximum participation

4. Potential bidders may form a cartel or

otherwise collude when bidding for a

contract.

5. Opposition by labour trade unions on the

outsourcing of the operations of the port

6. The danger that the private operator will not

properly maintain the facilities under

concession, returning them to the

government in bad condition. This can

however be mitigated by putting in adequate

safeguards in the concession agreement.

7. In the event, the government indicates that

the existing port staff are to be deployed for

port operations, the private operator

company may be saddled with excess labor

and labor costs that cannot be sustained in a

competitive market.

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Query 3 - The hinterland connectivity using backwater and waterways, road / rail connectivity may be included in the DFR with cost

Findings for the query 3 is given below -

1. Viability of inland water connectivity for the Thankassery port

1.1. Background

To assess the possible linkage of the inland backwaters of Kollam to the Thankassery port for the

movement of cargo from the backwaters to the point and vice-versa, a small study was undertaken. This

involved understanding the present cargo movement through the backwaters ( West Coast canal) , the

potential and challenges faced for cargo movement by interacting with the players involved in the cargo

movement through backwaters including barge owners , Kerala State Water Transport Department,

CHAs and other shippers in Kollam.

1.2. Existing cargo movement through west coast canal

The existing NW-3 West Coast Canal is from

Kottapuram to Kollam along with Champakara and

Udyogmandal canals (205 kms) has been declared as

National Waterway (NW-3) in 1993. The bulk of the

major cargo which is moved through National

Waterways-3 consists mostly chemicals and

products such as sulphur, Rock Phosphate,

Phosphoric Acid, salt, coal, zinc, furnace oil and

fertilizers. Cargo movement presently is however

limited to Champakkara and Udyogmandal canals.

Fertilizers and Chemicals Travancore Limited (FACT)

is the major player which is involved in the

movement of bulk cargo from Cochin port to its

Udyogmandal factory and accounts for more than

95% of the cargo movement of the west coast canal.

Some of the other players include Binani Zinc,

Hindustan and Travancore Cochin Chemicals Ltd

(movement of salt, though the same is not frequent.

Over the past few years, it has been observed that there has been a gradual decline in the movement of

the bulk cargo with liquid ammonia cargo (Eloor to Ambalamugal) being shifted to road. The indicative

trends in the cargo movement through the West Coast Canal is indicated in figure 2 below

Figure 20 : West coast canal map

Source : Inland Waterways Authority of India (IWAI)

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1.3. Infrastructure facilities on the west coast canal

Water terminals have been developed at seven locations across the West Coast Canal including at

Kottapuram, Aluva, Maradu, Viakom, Taneermukham (Chertala), Trikkunnapuzha and Kayamkulam.

Construction of 8th terminal at Kollam was entrusted to CPWD. The water terminal in Kollam is a boat

jetty facility located at Ashramam road near to the KSRTC bus stand.

1.4. Draft constraints

The draft availability is a serious constraint for movement of cargo across the length of the West Coast

Canal. The minimum draft available recorded across the various stretches of the West Coast Canal for

the month of April and May 2010 is indicated in the table below

Depth in meters

Sr. No Name of the Beat

( Chainage in Kms)

April,

2010

May,

2010

1 Champakara Canal (21.5 kms)

Cochin Port - Ambalamugal Factory 1.5 1.5

(0.0-21.5)

2 Udyogmandal canal ( 21 kms)

Cochin Port - Pathlam Bridge 1.5 1.7

(0.0 -21.0)

3 West Coast Canal ( 183 kms)

Kottapuram Terminal - Kochi Port 1.1 1.1

(0.0-34.0)

3- i Kochi Port - Panavalli Jetty 2.0 2.0

(34.0-54.0)

3- ii Panavalli - Thanneermukkom Terminal 2.0 2.0

(54.0-77.0)

3- iii Thaneermukkom Terminal - Alappuzha 2.0 2.0

(77.0-97.0)

Figure 21 : Cargo movement trends on the West Coast Canal

Source: Inland Waterways Authority of India (IWAI)

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Sr. No Name of the Beat

( Chainage in Kms)

April,

2010

May,

2010

3- iv Alappuzha - Thakazi jetty 1.9 1.9

(97.0-118.0)

3- v Thakkazi jetty - Trikunnapuzha Terminal 1.4 1.4

(118.0-136.0)

3- vi Trikunnapuzha Terminal - Ayiramthengu jetty 1.2 1.2

(136.0-154.0)

3- vii Ayiramthengu jetty - Edapallikotta Junction 1.2 1.2

(154.0-167.0)

3- viii Edapallikotta - Kollam terminal 0.9 0.9

(167.0-183.0)

Table 45: Minimum draft recorded across the various stretches of the NW-3

Source: Inland Waterways Authority of India (IWAI)

The expected tidal variation over the least available draft is around 0.4 to 0.5 meters.

1.5. Existing cargo movement at the Kollam

backwater stretch

With regards to the cargo movement in the Kollam

backwater stretch, it has been given to understand

that over the past one month Kerala Minerals and

Metals Ltd (KMML) is experimenting with the

movement of sand from their Kayankulam mining

areas to their factory at Chavara (distance of around

20 kms). In Kayankulam, sand is mined and the

possibility of the inland movement to the KMML’s

Chavara plant is being tested out.

If successful and stabilized, it is expected that an

annual movement of 200,000 tonnes of sand is

possible from the mining sites of KMML at

Kayamkulam to its mineral separating factory at

Chavara. The movement will be in barges and in bulk

format.

Indian Rare Earths Limited (IREL) also has a processing plant at Chavara. In fact IREL had also tried to

move sand from their mining sites to their factory. Unfortunately for IREL, there is a Foot Over Bridge at

Kovilthottam between the KMML factory and the IREL factory which obstructs the cargo movement.

Hence while KMML is trying to experiment bringing in cargo to its factory from Kayamkuliam, IREL is

Figure 22 : Overview map of Kollam to Kayamkulam area

Source: Google map

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unable to move the sand through inland waters due to the low-lying foot over bridge at Kovilthottam.

The height of the bridge from the water is 4.8 m, while the central span width is 9.1m. While the Inland

Waterways WAI had offered to construct a new alternate bridge and later demolish the existing bridge

to allow the cargo movement, the locals have opposed the plan.

1.6. Possibility of movement of the identified cargo of Thankassery port along the Kollam backwaters

The inland water transport is being advocated primarily as a means of cheaper inland transportation

option and also to ease congestion from the roads. The cheaper inland transport would be realized

when the origin and destination have their units near the water body and the cargo is transported to the

barges from the source and later directly transferred to its destination. A classic example is the existing

movement of sulphur, rock-phosphate being moved from the FACT jetty at Cochin port to its factory at

Udyogmandal via the Udyogmandal canal and to its factory at Ambalamedu through the Champakkara

canal. The distance is around 20-25 km and in one barge around 500 to 600 tonnes is moved at an inland

cost of Rs. 70-80 per tonne. At both the ends, the cargo is pumped in/out by a mechanized conveyor

system, without any intermittent double handling making the operations very cost effective.

With the Thankassery port being operational in the near future, the possibility of cargo movement from

the immediate hinterland via the Kollam backwater was explored. The cargo being identified for the

Thankassery port essentially comes from the immediate hinterland of Kollam, Trivandrum and the

coastal cargo (cement) meant for the South Kerala region.

While the cargo generators from Trivandrum hinterland would move by road, the immediate possible

cargo movers for the Thankassery port that would possibly use the inland water system would arise

from the hinterland of Kollam, which are mainly cashew exporters. These exporters have their units

spread across the district and do not necessarily have their units near the river banks unlike IREL and

KMML. In the event the cashew cargo generators use the inland water for the movement of their cargo

to Thankassery port, the last mile connectivity or the first mile connectivity for imports and exports

respectively would be by road movement. The possible savings which has been depicted in section 3.8.5

of this report would be offset by the double handling charges i.e. additional handling charges that the

shipper would be required to pay for the transfer of the container from the truck on the road to the

barge on the inland water. Accordingly it is more prudent for them to directly move their cargo by road

to and from Thankassery port.

For cement, the cargo would be pumped directly from the vessel to the silos from where it will be

bagged and later sent to the various cement depots mainly in the South Kerala region thereby not

necessitating the need of utilizing the inland water mode.

1.7. Other issues

Draft -

One of the key issues with regards to the movement in the Kollam stretch is the low draft

(0.9m) as recorded in May 2010. Accordingly the cargo movement would have to depend

extensively on the tidal variation which is recorded at 0.4 to 0.5. In the event the cargo

generator utilizes the backwater, he would be required to time his cargo movement based on a

favorable tide factor, which will be very inconvenient and result in time over-runs. Low draft

across the canals is an issue which is being addressed by the authorities concerned by dredging

of the canals. However they are facing opposition from the local fishermen community.

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Material handling –

In addition, the water terminals so built are ready to use, but do not have the requisite crane

facilities for the container handling. These cranes are possibly available on lease, but these are

charged at Rs.50,000/- to Rs.60,000/ - per day and proves to be unviable for a shipper.

Width –

The width of a barge is around 10 meters, while the Kollam stretch of canal varies from 10 m to

20 m thereby making the navigation of the barges highly difficult in stretches which have just

about 10 m width.

Sea-worthiness of barges –

The barges plying are mainly inland barges requiring minimum safety and other technical

requirements for getting permissions from statutory authorities for navigation. For using

Thankassery Port these will have to be upgraded to satisfy conditions of sea worthiness which

would involve huge additional costs and regular inspection and statutory clearances which

owners of these barges would not accept being uneconomical.

Integration issues –

At the outset, there is no convenient point of entry in the immediate vicinity of Thankassery Port

to connect directly the inland waterways directly in the port. This would require barges to enter

sea and then from approach channel to enter Thankassery Port. Therefore, an integrated

movement from the inland waterway to the sea port does not seem to be a viable option.

1.8. Conclusions

Based on the cargo generation pattern identified for the Thankassery port, it becomes viable for the

cargo generators to use the inland road transport. In addition, the factories are not located on the bank

side and movement through roads is more convenient and inland water movement of cargo for the

Thankassery port would not be advisable. Movement by inland water would only entail multiple, loading

and unloading activities leading to additional charges and hence would increase the logistics cost of the

shipper.

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2. Possibility of rail connectivity to Thankassery port

As directed, the possibility of rail connectivity to Thankassery port, it alignment and indicative cost was

also explored.

2.1. Proposed route alignment

In terms of the feasibility of laying down the railway line, a survey was undertaken was undertaken from

the existing rail head to the port and the most probable route (with the minimal disruption to existing

structures) was chalked out. The most probable route that can be used as the rail corridor appears to be

on either the left or the right side of the road from the Police camp to the Thankassery port. The

proposed indicative rail alignment from the existing rail head to Thankassery port is indicated in the

diagram below

Figure 23 : Proposed rail alignment from existing rail head to Thankassery port

Source: Survey conducted by Atlas Survey Engineering System, Kollam

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The approximate rail length would be around 1800 meters. For laying the rail line, a corridor of

minimum 20 meters would be required. So approximately around 36000 sq. meter of land would be

required to be acquired (8.89 acres).

As indicated above, this corridor can be either on the right side or the left side of the road from the

Police Camp to the Thankassery port. The limitation however for laying down the rail line is the presence

of significant human habitation in the corridor. The details of such inhabitants and the various

structures are as follows:

Left side of the road

Police Camp to Kochuplamoodu Bridge Junction

1. S.P. Office - 1 number

2. Tiled roof residential Building – 5 numbers

3. Two storied shop – 6 numbers

4. Two storied residential building – 8 numbers

5. Three storied commercial building – 1 number

6. Three storied big hotel – 1 number

7. Banyan Tree – 1 number

Kochuplamoodu bridge junction to Kollam Port

8. Two storied co-operation building - 1 number

9. Empty Area - 1 number

10. Fishermen’s single storied residential building - 38 numbers

Right side of the road

S.P Office to Kochuplamoodu Bridge Junction

1. Temple

2. YMCA Office with empty frontage

3. S.N. Trust School with empty frontage

4. Congress Bhavan with empty frontage

5. Corowther Masnic hall with empty frontage

6. Vijayalekshmi Cashew’s Office with empty frontage

7. Tiled roof small shop - 8 numbers.

8. Two storied residential building – 2 numbers.

9. Tiled residential building – 1 number.

10. Indian Red Cross Society two storied with empty frontage

11. Empty Land

12. Two storied shopping complex

Kochuplamoodu bridge junction to Kollam Port ( May kindly check if the following structures fall

in the stretch of Kochuplamoodu junction to Kollam port)

13. Empty Land

14. Tiled residential building - 2 numbers.

15. Fishermen’s Single storied residential building - 28 numbers.

16. Empty land

17. Fishermen’s Single Storied residential building - 72 numbers.

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2.2. Cost estimates

The approximate cost details for the proposed rail line would be as follows

Sr

No

Heading Parameter Cost factor

In Rs.

million

Project cost factor

in Rs. million

1 Rail track cost Cost of developing the rail track per km 80.00

Indicative project cost for covering 1.8 km

from existing rail head to Thankassery

port

144.00

2 Land

acquisition cost

Cost of acquiring land at market rate per

acre

30.00

Cost of acquiring the indicative 8.80 acres

at market rate

266.70

3 Site

development

cost

Cost of site development per km 5.00

Cost of site development per 1.8 km 9.00

4 Miscellaneous

cost

Any other miscellaneous cost per km 1.00

Any other miscellaneous cost per 1.8 km 1.80

5 Total Project Cost in Rs. Million 421.50

Table 46: Rail connectivity cost details

2.3. Conclusions

Presently the inland movement of the cargo type being generated from the hinterland identified for

Thankassery port is mainly through road since the primary cargo generators are within the radius of 150-

200 kms from the port. Cargo generators in the secondary hinterland of Tamil Nadu if at all will use the

rail connectivity, though this cargo expected is not very significant due to the same being routed

towards Tuticorin port.

Factors such as the suitability of the alignment, connectivity to the rail mainline, safety aspects etc. are

under the purview of Indian Railways, no comments can be given regarding its feasibility at this stage.

The proposed alignment indicated is purely on the basis of availability of land and its connection to the

Thankassery port. Irrespective of whether the State Government develops the rail corridor directly or

through a BOT operation, it will be totally subject to approval by rail authorities.

The development of a railway line usually comes under the purview of Indian Railways (under the

Central Government). The state government assists in the land acquisition process and other clearances

required. Alternatively, the rail line could be developed by the Private Developer (through JV / SPV

route). If the Developer bears the entire costs, there would be a certain impact on the viability of the

project.

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Accordingly, three scenarios has been worked out wherein the rail connectivity cost is apportioned to

various entities and the financial viability has been so calculated. The revised financial viability is

indicated in the financial analysis section of this note.

2.4. Road connectivity

In the draft DFR, under section 5.13 of Port Planning Chapter, evacuation of cargo by 4 possible

approach road options were indicated of which one option was through the Port gate via

Kochuplamoodu junction and then to Police camp ( around 2.5 km). Harbour Engineering Department

have initiated work in the above mentioned route including proposed acquisition of 1 acre of land near

proposed Kochuplamoodu bridge ( being built by PWD) for easy access of trucks from port road to the

proposed bridge. The indicative costing for the approach road has been worked out as under

Sr

No

Heading Parameter Cost factor

In Rs.

million

Project cost factor

in Rs. million

1 Approach road

cost

Indicative cost of construction of

approach road to National Highway per

km

36.00

Indicative project cost for covering 2.5 km

from port gate to

90.00

2 Land

acquisition cost

Cost of acquiring land at market rate per

acre

30.00

Cost of acquiring the indicative 1 acre at

market rate

30.00

3 Site

development

cost

Construction of road drain and foot path

(LS)

7.70

Electrification of port road ( L.S)

7.50

4 Total Project Cost in Rs. Million 135.20

Table 47: Approach road cost estimates

The cost estimates obtained from road / rail connectivity has been worked out in the revised financial

analysis and the same is enclosed in the subsequent section.

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Query 4 - Reducing the time to start second phase – ( in the draft report it has been indicated as 2025).

Query 5 - If 20,000 or more DWT vessels need to come what need to be done and costs as the future requirements are larger vessels to reduce cost of transportation

Findings for the query 4 and 5 is given below -

1. Reducing the time to commence second phase The traffic projections presented in the draft DFR has taken into account cement traffic of around 6 lakh

tons from Ultra Tech Cement to start with. The cement so projected in the draft DFR could cater to the

South Kerala market.

After the submission of the draft DFR, there has been a proposal of interest from Mehta Group for

setting up a cement terminal of 5 lakh tons per annum at Thankassery port.

Presumably the cement traffic indicated by both Mehta Group and Ultra Tech individually will be

sufficient to cater to the South Kerala market and hence the traffic projections so indicated in the draft

DFR should hold good inspite of the additional cement cargo so indicated by Mehta Group.

However if we consider the cement traffic projected by Mehta Group as the additional cargo which

would also be supplied to the immediate hinterland it is observed that phase 2 which was earlier

estimated to commence from 2025 would commence from 2020.

Accordingly the revised traffic projections considering the additional cement traffic of 5 lakhs is

indicated in the table 4 below. The traffic projections indicated in the draft DFR has also been indicated

in Table 5 for comparative purpose.

2015 2020 2025 2030 2035 2040

Low 2,024,156 2,215,084 2,444,550 2,694,710 2,965,614 3,275,218

Medium 2,207,468 2,718,296 3,387,763 4,255,490 5,343,259 6,805,717

High 2,305,530 3,073,216 4,139,866 5,596,144 7,504,658 10,280,692

Table 48: Revised traffic projections in tonnes

Table 49: Traffic projections in tonnes as indicated in the draft DFR

2015 2020 2025 2030 2035 2040

Low 1,524,156 1,715,084 1,944,550 2,194,710 2,465,614 2,775,218

Medium 1,707,468 2,218,296 2,887,763 3,755,490 4,843,259 6,305,717

High 1,805,530 2,573,216 3,639,866 5,096,144 7,004,658 9,780,692

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2. Additional cost to be incurred in the event 20,000 dwt or more vessels berth at Thankassery.

Presently, the wharf has an available draught of 6.30 m but the structure is designed for a draught of

10.00 m after dredging, where by vessels of size upto 20,000 DWT can be directly berthed at wharf.

In the draft DFR, the vessel size that would call on Thankassery port has been kept at around 10,000 to

15,000 DWT due to the following reasons.

Thankassery port is primarily positioned as a feeder / coastal port. We do not envisage direct

berthing of international container vessels at Thankassery port given the existence of Cochin port in

the vicinity and the lack of adequate container cargo to attract an international container vessel to

call on Thankassery. Through Thankassery port, the container cargo coming from the hinterland of

Kollam and Trivandrum would be transshipped to Cochin port via feeder vessels of around 10,000

DWT. This would be good example of the hub and spoke arrangement where in the synergies of

both the ports would be utilized to eliminate the surface transportation cost and reducing the

logistics cost of the shipment

Cement is presently accounting for a dominant chunk of the bulk traffic cargo for Thankassery port.

The cement will be sourced from Gujarat. As a general practice, coastal movement of cement

usually occurs in vessel sizes of around 10,000 DWT mainly due to the draft restrictions of the jetties

where cement is loaded in Gujarat. Accordingly for the coastal movement of the cement from

Gujarat to Thankassery, vessels of maximum 15,000 DWT were considered.

In addition, the vessel sizing has also been arrived based on the principle that the existing

infrastructure facilities should be utilized to its full potential. Accordingly, the future investments for

strengthening of jetty, etc has been worked out based on the available operating constraints of the

existing facilities which has a limiting factor on the type of vessels it can accommodate.

In the event a 20,000 DWT vessel berths, the additional cost to be incurred is indicated below. However

the feasibility of the project vis-à-vis the cost to be incurred and the cargo volume to be generated also

has to be considered.

Sr

No

Parameter Project cost factor in

Rs. million

1 Additional cost for strengthening of the existing berth 44.00

2 Cost of dredging in Phase 1 76.00*

3 Total 120.00

Table 50: Additional cost to be incurred for berthing of 20,000 DWT vessels.

Maintenance cost of dredging per year ( @ 5% of capital dredging cost)

* - Cost pre-poned from Phase 2 to Phase 1

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6. Financial viability analysis

The financial analysis of the project has been re-worked based on:

the revised traffic as indicated in table 48-

Addition of the rail and road connectivity cost as indicated in table 46 and 47

Addition of cost for strengthening and dredging to accommodate 20,000 DWT vessels as indicated in

table 50.

While the additional cost to accommodate the 20,000 DWT vessels would be required to be borne by

the Developer, the rail / road connectivity cost can either be fully incurred either by the State

Government or by the private developer. Alternatively the rail / road connectivity cost can be

apportioned equally between the government agency and the private developer. In case the private

developer needs to invest for the road / rail connectivity, the same will be routed through a SPV.

Accordingly, based on the various permutations / combinations of the investment pattern for road / rail

connectivity, the following scenarios have been considered.

Scenario 1 The rail and road connectivity cost to be borne by 100% by the Private Developer

through a SPV

Scenario 2 50% of the rail and road connectivity cost is to be borne by the Private Developer

through a SPV and the balance 50% will be incurred by the Government.

Scenario 3 50% of the rail connectivity cost to be borne by the Private Developer through a SPV,

while the 100% road connectivity cost would be borne by the government

Scenario 4 100% of the rail and road connectivity cost is borne by the Government

The financial viability analysis for the revised traffic figures based on the above four scenarios has been

worked out. In addition, a comparative analysis has been undertaken for the above referred scenarios

considering the following two options -

1. Option 1 - Maximum vessel size berthing at the jetty is 20,000 DWT

2. Option 2 - Maximum vessel size berthing at the jetty is 15,000 DWT.

A diagrammatic representation of the financial analysis so undertaken is indicated below

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The summarized financial viability findings and our recommendations are indicated below. The detailed

financial workings (Profit & Loss account, financial indicators statement) are enclosed as Annexures 3.1

to 13.8 at the end of this section.

3.1. Scenario 1 - The rail and road connectivity cost to be borne by 100% by the Private Developer

through a SPV

Description Option1

( maximum vessel size of

20,000 DWT)

Option 2

( maximum vessel

size of 15,000 DWT)

Internal Rate of Return (IRR) in % 8.70 9.35

Net Present Value (NPV) in Rs. Million (440.52) (298.08)

Payback period in years 17 17

DSCR Consolidated 1.29 1.43

3.2. Scenario 2 - 50% of the rail and road connectivity cost is to be borne by the Private Developer

through a SPV and the balance 50% will be incurred by the Government.

Description Option1

( maximum vessel size of

20,000 DWT)

Option 2

( maximum vessel

size of 15,000 DWT)

Internal Rate of Return (IRR) in % 9.77 10.61

Net Present Value (NPV) in Rs. Million (190.31) (46.59)

Payback period in years 16 16

DSCR Consolidated 1.55 1.69

3.3. Scenario 3 - 50% of the rail connectivity cost to be borne by the Private Developer through SPV,

while the 100% road connectivity cost would be borne by the government.

Description Option1

( maximum vessel size of

20,000 DWT)

Option 2

( maximum vessel

size of 15,000 DWT)

Internal Rate of Return (IRR) in % 10.10 10.99

Net Present Value (NPV) in Rs. Million (129.63) 14.49

Payback period in years 16 15

DSCR – Consolidated 1.62 1.77

3.4. Scenario 4 - 100% of the rail and road connectivity cost will be borne by the Government.

Description Option1

( maximum vessel size of

20,000 DWT)

Option 2

( maximum vessel

size of 15,000 DWT)

Internal Rate of Return (IRR) in % 11.35 12.51

Net Present Value (NPV) in Rs. Million 61.80 205.09

Payback period in years 15 15

DSCR – Consolidated 1.88 2.10

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3.5. Conclusions

Based on the above analysis, only in Scenario 4, the project becomes viable for a private developer.

Therefore the project will be viable to a private developer only if the connectivity cost of the road and

rail (if required) are borne by the Government. The developer will be required to put in the additional

investment required for strengthening the existing berth and dredging to accommodate 20,000 DWT

vessels. However from the financial analysis it is observed that the profitability of catering to a 15,000

DWT vessel is more attractive than for 20,000 DWT vessels.

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Annexure 13.1

Scenario 1 - The rail and road connectivity cost to be borne by 100% by the Private Developer through

SPV

Option 1 - maximum vessel size of 20,000 DWT

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Annexure 13.2

Scenario 1 - The rail and road connectivity cost to be borne by 100% by the Private Developer through

SPV

Option 2 - maximum vessel size upto 15,000 DWT

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Annexure 13.3

Scenario 2 - 50% of the rail and road connectivity cost is to be borne by the Private Developer through

SPV and the balance 50% will be incurred by the Government.

Option 1 - maximum vessel size of 20,000 DWT

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Annexure 13.4

Scenario 2 - 50% of the rail and road connectivity cost is to be borne by the Private Developer through

SPV and the balance 50% will be incurred by the Government.

Option 2 - maximum vessel size upto 15,000 DWT

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Annexure 13.5

Scenario 3 - 50% of the rail connectivity cost to be borne by the Private Developer through SPV, while

the 100% road connectivity cost would be borne by the government

Option 1 - maximum vessel size of 20,000 DWT

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Annexure 13.6

Scenario 3 - 50% of the rail connectivity cost to be borne by the Private Developer through SPV, while

the 100% road connectivity cost would be borne by the government

Option 2 - maximum vessel size upto 15,000 DWT

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Annexure 13.7

Scenario 4 - 100% of the rail and road connectivity cost will be borne by the Government

Option 1 - maximum vessel size of 20,000 DWT

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Annexure 13.8

Scenario 4 - 100% of the rail and road connectivity cost will be borne by the Government

Option 2 - maximum vessel size upto 15,000 DWT

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Caveats

1. Reports and communication are for the sole use of the client

All communications, reports and information provided by DTTIPL to the client, its employees or agents,

whether in writing or oral are provided solely for the use of the Client in connection with the services

specified herein, and shall not be used for any other purpose or referred to in any document or made

available to any other person. The report and the information are absolutely confidential and any

reproduction, copying or otherwise, quoting of the report or any part thereof can be done only with

prior permission in writing of DTTIPL. The report is intended only for the sole use and information of

Client, for the purpose set out earlier in this agreement. No other party is entitled to rely on the DTTIPL

reports or advice for any purpose whatsoever. DTTIPL disclaims any responsibility to any third party for

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reports shall take precedence over any advice and interim report. DTTIPL will not be responsible for

updating any opinions, advice or reports subsequent to the issue of a final version.

2. Traffic & financial projections

DTTIPL does not accept any responsibility or liability for the projections or any losses that may be

incurred by the client or any party as a result of reliance on the projections. DTTIPL does not provide any

assurance about the achievability of the financial projections.

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responsible for, among other things, making all management decisions and performing all management

functions.

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