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List of Abbreviations
ACC
APEDA
APPROX
AVT
BPCL
C
CAGR
CCHAA
CCoCI
CED
CEPC
CEPZ
CFS
CHA
CIAL
CII
CNSL
CRZ
DoP
DPR
DSCR
DTTIPL
DWT
EDI
EIA
EICL
EMP
EXIM
FACT
FEU
FT
GDP
GoK
GPS
GRT
H0
HDI
Page 2 of 158
HUF
ICD
ICT
INR
IPA
ISPS
KG
KM
KMML
KSIDC
KV
KWA
LCL
LPCD
LTD
M
MAX
MLHW
MLLW
MHHW
MHLW
MSL
MM
MMTG Act
MoP
MPEDA
MSL
MT
MV
MW
NA
NCR
NH
NOS.
NOx
NPV
NW
NW-SE
O-D
OECD
Page 3 of 158
P
P.A.
PABX
PESTLE
PPP
QTY
R.M
RFID
RfP
SEZ
SO2
SPC
SPM
SQ. MTS
SWOT
T&C
TEU
THC
TTPL
UOM
US$
VKUY
WLL
WMS
Y-O-Y
Page 4 of 158
Probability
Per Annum
Private Automatic Branch Exchange
Political, Economic, Social, Technological, Legal, Ecological
Public Private Partnership
Quantity
Raw Materials
Radio frequency identification
Request for Proposal
Special Economic Zone
Sulphur dioxide
Special Purpose Company
Suspended Particulate Matter
Square meters
Strengths, Weaknesses, Opportunities, Threats
Textile and Clothing
Twenty-foot equivalent unit
Terminal Handling Charges
Travancore Titanium Products Ltd
Unit of Measurement
US Dollar
Vishesh Krishi Upaj Yojana
Wireless local loop
Warehouse Management System
Year on year
Contents
Executive Summary ................................................................................................................. 9
1.
2.
3.
4.
5.
Introduction ......................................................................................................................14
1.1
1.2
PESTLE analysis...........................................................................................................17
2.2
3.2
3.3
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
3.7
3.8
4.2
Land ............................................................................................................................51
4.3
Connectivity .................................................................................................................51
4.4
Topography ..................................................................................................................53
4.5
Bathymetry ...................................................................................................................54
4.6
4.7
4.8
4.9
Utilities ........................................................................................................................59
Introduction ..................................................................................................................61
5.2
5.3
5.4
5.5
5.6
Page 5 of 158
6.
5.7
5.8
5.9
5.10
Navigational aids...........................................................................................................67
5.11
5.12
5.13
7.
8.
9.
Determination of tariffs....................................................................................................75
7.1
7.2
Introduction ..................................................................................................................78
8.2
8.3
8.4
Page 6 of 158
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
Page 7 of 158
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 countrys raw cashew nuts .......................................................................... 104
Figure 11 : Import trends of raw cashew nuts through Cochin Port ........................................................ 104
Figure 12 : Export trends of countrys cashew kernels ............................................................................. 105
Figure 13 : Export trends of raw cashew nuts through Cochin Port ......................................................... 105
Figure 14 : Export trends of countrys 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--vis India) ....................................................... 111
Figure 18 : Exports trends of Cashew Nut Shell Liquid ( Kerala vis--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
Page 8 of 158
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--vis the other existing and upcoming ports in
the region.
Acceptability of the relevant stakeholders ( shippers) on diverting their cargo to Thankassery port.
Page 9 of 158
A detailed commodity profiling was undertaken and was categorized into containers and bulk / breakbulk 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
Low
Medium
High
2015
2,024
2,207
2,306
2020
2,215
2,718
3,073
2025
2,445
3,388
4,140
2030
2,695
4,255
5,596
2035
2,966
5,343
7,505
2040
3,275
6,806
10,281
2025
44,992
62,907
70,574
2030
50,298
77,173
89,208
2035
56,548
95,364
115,293
2040
63,773
118,300
149,651
2015
37,122
43,568
44,332
2020
40,429
51,863
55,879
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:
Page 10 of 158
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
Page 11 of 158
Year
2015
2020
2025
2030
2035
2040
Revenues
176.43
423.20
596.75
1077.54
1945.62
2411.78
Profitability Year
2015
2020
2025
2030
2035
2040
In Rs. Million
EBIDTA
91.53
253.17
365.20
689.53
1525.75
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
Internal Rate of Return (IRR) in %
Net Present Value (NPV) in Rs. Million
Payback period in years
DSCR Phase I
DSCR Phase II
Amount
12.51
205.09
15
1.82
2.81
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
Page 13 of 158
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
Shipping Industry Update - September 2009
Page 14 of 158
Evaluate the possibility for establishing alternate source of revenue like commercial complexes, SEZ
etc.
Topics Covered
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
Chapter 6
This chapter provides details of capital costs and operation & maintenance costs for
the various facilities so planned
Page 15 of 158
Chapter
Chapter 7
Topics Covered
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
Page 16 of 158
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
Page 17 of 158
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:
Indias 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 economys 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.
Keralas economic performance is driven by the secondary and tertiary sectors. The states 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 Keralas economy, grew at a rate of 12.5 per cent in 200708, 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.
Page 18 of 158
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 ports 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.
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, proactiveness & commitment of State Maritime Boards / Port departments can go a long way in helping the
sector sail through regulatory hurdles. Gujarats success in developing a good port sector was also
possible due to phased privatization followed by fully private ports.
Page 19 of 158
2.1.6 Environmental
Keralas 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 regions 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.
2.2.1 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, Keralas
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.
Page 20 of 158
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.
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 ports 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.
Page 21 of 158
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 (OD) 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--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.
Page 22 of 158
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:
Primary hinterland
Kollam
Pathanamthitta
Thiruvanthapuram
Secondary hinterland
Kanyakumari
Theni
Madurai
Parts of
Alappuzha,
Kottayam and
Idukki
Table 1: Regions in the primary and secondary hinterland
Virudunagar
Tirunelveli
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,
Page 23 of 158
Logistics service providers including inland container depots, container freight stations.
Secondary
Commodities considered
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)
1. Marbles / tiles,
2. Timber logs,
3. Rubber,
4. Food & agri products,
5. Cement
Page 24 of 158
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.
The logs are imported both in bulk and in FEU containers depending on the importers 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.
Page 25 of 158
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
Page 26 of 158
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
297,600
18,600
500
50
298,100
18,650
Cashew Kernels
59,400
3,832
15,120
1,260
7,200
400
400
18
6,500
325
88,620
5,835
386,720
24,485
Titanium di-oxide
Sillimanite
Cashew nut shell liquid
(B)
Total [(A) + (B)]
Table 4: Potential open cargo from Kollam district
Annual Qty in
TEUs
50
50
Annual Qty in
TEUs
148
667
110
925
(c) 2010 Deloitte Touche Tohmatsu India Private Limited
13,220
975
243
231
26,371
25,052
90%
70%
208
14
10%
21
1
17,537
1,169
10%
1754
117
5,802
5,512
32,416
30,795
50% 2,756
138
10%
276
14
20,501
1,321
10%
2050
132
Particulars
Page 28 of 158
1
Export
( Natural
rubber)
2
Exports
(Reclaimed
rubber)
3
Imports
( Natural
rubber)
4
Imports
(Synthetic
rubber)
Total
Particulars
1
Export
( Natural
rubber)
2
Exports
(Reclaimed
rubber)
3
Imports
( Natural
rubber)
4
Imports
(Synthetic
rubber)
Total
46,926
4,317
5,037
NA
NA
46,472
4,317
4,381
37,184
92,354
55%
55%
39%
55%
25,604
2,374
1,709
20,451
50,138
1,348
5%
125
5%
90
26%
1,076
5%
2,639
-
1,280
119
444
1,023
2,866
23
54
150
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 isnt 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--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, Keralas export of reclaimed rubber has been calculated by applying the proportion of
Kerala based manufacturing units vis--vis all India units to countrys total exports of reclaimed
rubber.
Page 29 of 158
5. In (4) above, Keralas import of synthetic rubber is calculated by applying the proportion of states
relative share in national consumption to countrys 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.
Page 30 of 158
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)
Page 31 of 158
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.
Primary
Hinterland (
Kerala)
Container Traffic
Kollam
Thiruvanthapuram
Idukki &
Pathanamthitha
Kottayam
Coastal movement (
Clay)
Import cargo
( newsprint /
wastepaper)
Coastal movement (
Cement)
Coastal movement (
sand)
Page 32 of 158
In TEUs
24,485
975
192
In Tonnes
386,720
13,220
2,909
150
2,000
2,866
30,000
440
5,280
1,100,000
72,000
Description
Container Traffic
In TEUs
Import cargo (
finished ferilizers Urea & Muriate of
Potash)
Import cargo
( timber logs)
Indicative open cargo from Kerala (
primary) hinterland - A
In Tonnes
48,000
28,243
440,995
1,345,000
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.
Page 33 of 158
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.
Districts
Export Commodities
1.
Madurai
2.
Tirunelveli
3.
Theni
4.
Virudhunagar
5.
Kanyakumari
Coir pith blocks and coir products, sands & minerals, rubber/latex
gloves, sea food, Fish nets, cashew kernels, etc.
6.
Dindigul
Page 34 of 158
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-TirupurKarur 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
Page 35 of 158
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
Food /
agricultural
products & spices
Textiles, yarns &
fabrics
Cement
Timber & wood
EXIM status
Hinterland
districts
Export
Madurai,
Kanyakumari
Export
Madurai,
Theni
Madurai
Kanyakumari,
Thirunelveli
Import
Import
Containerised baseline
open figure (base year
2008-09)
in TEUs
in Tonnes
1,160
17,400
Total
1,520
22,800
1,067
16,000
Bulk / Break
bulk
baseline
open figure
( base year
2008-09)
in Tonnes
128,000
3,747
56,200
128,000
Description
Primary
Hinterland
( Kerala)
Container Traffic
Kollam
Thiruvanthapuram
Idukki &
Pathanamthitha
Kottayam
Coastal movement (
Clay)
Import cargo
( newsprint /
wastepaper)
Coastal movement (
Cement)
Coastal movement (
sand)
Import cargo ( finished
ferilizers - Urea &
Muriate of Potash)
Import cargo
( timber logs)
Indicative open cargo from Kerala (
primary) hinterland - A
Secondary
Export cargo
Hinterland (
Import cargo
Tamil Nadu)
Indicative open cargo from Tamil
Nadu ( secondary) hinterland - B
Total indicative open cargo from the
identified hinterland of Kerala and
Tamil Nadu ( A + B)
In TEUs
24,485
975
192
In Tonnes
386,720
13,220
2,909
150
2,000
2,866
30,000
440
5,280
1,100,000
72,000
125,000
48,000
28,243
440,995
1,345,000
2,680
40,200
1,067
3,747
16,000
56,200
128,000
128,000
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.
Page 38 of 158
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 governments assistance towards a particular commoditys 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.
Page 39 of 158
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Page 45 of 158
2015
2,024
2,207
2,306
2020
2,215
2,718
3,073
2025
2,445
3,388
4,140
2030
2,695
4,255
5,596
2035
2,966
5,343
7,505
2040
3,275
6,806
10,281
2025
44,992
62,907
70,574
2030
50,298
77,173
89,208
2035
56,548
95,364
115,293
2040
63,773
118,300
149,651
2015
37,122
43,568
44,332
2020
40,429
51,863
55,879
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).
Activity
Cochin
Port by
Road
11,000 Road
freight
movement till Kollam
Page 46 of 158
Activity
In Rupees
Cochin port
via proposed
port at
Kollam
2,000
Sr.
No
Activity
Cochin
Port by
Road
3
4
Terminal Handling
Charges at Cochin Port
Coastal Sea Freight
Transshipment charges
Activity
1,500 CHA
Charges
/
customs clearance at
Kollam
4,955 Terminal
Handling
Charges at Kollam
- Coastal Sea Freight
(Kollam- Cochin)
Cochin port
via proposed
port at
Kollam
1,500
2,500
4,000
- Transshipment
3,309
charges
6
Documentation charges
1,500 Documentation
1,500
charges
7
Storage charges ( if
2,000 Storage charges ( if
2,000
required)
required)
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.
Rs. 20,955
Total logistics cost Kollam - Thankassery (road) and Kollam - Cochin (coastal)
Rs.16,809
Rs.4,146
Trivandrum hinterland
Sr.
No
Activity
Terminal Handling
Charges at Cochin Port
Page 47 of 158
Cochin
Activity
Port by
Road
14,500 Road freight
movement till
Trivandrum
1,500 CHA Charges /
customs clearance at
Jaigad
4,955 Terminal Handling
Charges at Kollam
In Rupees
Cochin port
via proposed
port at Kollam
5,082
1,500
2,500
Sr.
No
Activity
Transhipment charges
Documentation charges
Storage charges ( if
required)
Total
Cochin
Port by
Road
Activity
Cochin port
via proposed
port at Kollam
4,000
3,309
1,500
2,000
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.
Rs. 24,455
Total logistics cost Kollam - Thankassery (road) and Kollam - Cochin (coastal)
Rs.19,891
Rs.4,564
S
Sr.
No
1
Activity
Terminal Handling
Charges at Cochin Port
4
5
6
Documentation charges
Storage charges
Inland transportation to
Page 48 of 158
Cochin
Activity
Port by
Road
38,000 Coastal shipment
charges from Mundra
to Kollam
1,500 CHA Charges / customs
clearance at
Thankassery
4,955 Terminal Handling
Charges at
Thankassery Port
1,500 Documentation charges
2,000 Storage charges
Inland transportation
In Rupees
Cochin port
via proposed
port at Kollam
40,000
1,500
2,500
1,500
2,000
Activity
Sr.
No
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
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
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.
Page 49 of 158
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.
Page 50 of 158
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
Loading / Unloading area
Storage area
Building and utilities
Internal roads and miscellaneous areas
2064 sq.m
2990 sq.m
20,220 sq.m
629 sq.m
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.
Page 51 of 158
The State Highways namely, Main Central Road, Kollam-Shencottah Road and Punalur-PalaMuvattupuzha (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.
Page 52 of 158
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
4.4 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
Page 53 of 158
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
+1.30 m
+1.20 m
+0.90 m
+0.80 m
+0.40 m
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.
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.
Page 55 of 158
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 networks
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.
Page 56 of 158
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 States 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.
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.
Environmental Attributes
Project Activity
Nature of Impact
Landscape
2.
3.
Land Reclamation
Construction work
Transportation
Civil works
Waste Disposal
Oil Leakage
4.
Air Quality
5.
Noise Quality
6.
Natural Vegetation
Transportation
Civil Works
Unpleasant Smell of fish
Dredging & Reclamation
Civil Works
Transportation
Working Phase
Site Clearing
7.
Natural Fauna
8.
Transportation
Construction works
Site clearing
Increased access for
transportation of Port
10.
Economy
Increased economic
activities
11.
Tourism
Minor degradation
Minor degradation
Minor degradation
No major effect
Major impact
Major impact, but
infrequent
Temporary effect
Temporary effect
Permanent effect
Temporary impact
Temporary impact
Temporary impact
Permanent impact
Permanent impact, but not
significant
Permanent impact, minor
Permanent impact, minor
Degradation due to
emission of exhaust from
transportation vehicles and
vessels
Financial status of the local
people as well as
government will improve
Negative, but minor
Page 58 of 158
Sr.
No.
12.
Environmental Attributes
Project Activity
Nature of Impact
Employment
Positive
13.
Aesthetic
14.
Hazard
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
1.
2.
3.
4.
5.
6.
7.
8.
Name of substation
Edamon
Kundara
Ambalappuram
Kavanadu
Kottarakkara
Kottiyam
Punalur
Sasthamcotta
Page 59 of 158
Voltage level
220 KV
220 KV
110 KV
110 KV
110 KV
110 KV
110 KV
110 KV
(c) 2010 Deloitte Touche Tohmatsu India Private Limited
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.
Page 60 of 158
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.
Page 61 of 158
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.
Page 63 of 158
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.
Page 64 of 158
Page 65 of 158
Page 66 of 158
Page 67 of 158
2015
2.0
2020
2.2
2025
2.4
2030
2.6
2035
2.9
2040
3.2
Medium
High
2015
2.2
2.3
2020
2.7
3.0
2025
3.3
4.1
2030
4.2
5.5
2035
5.3
7.5
2040
6.8
10.2
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
Page 68 of 158
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.
Page 69 of 158
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.
Costs incurred
In Million Rs.
2.
Year of construction
2.
Costs incurred
Extension of wharf
Page 70 of 158
In Million Rs.
Year of construction
S.
No.
3.
Costs incurred
Yard development
In Million Rs.
Year of construction
3. Works under State Government (Port Sector) under State Plan Scheme
S.
No.
1.
Costs incurred
In Million Rs.
Year of construction
Construction of wharf
Page 71 of 158
Costs incurred
In Million Rs.
Year of construction
Transit shed
Port road
Dredging cost
TITLE
Phase1
( till
2020)
LAND
1.1 Private/ Government
0.00
ESTIMATED COST
Phase-2
( 2020 onwards)
0.00
Total
0.00
For the purpose of the financial projection, the cost of breakwater has not been taken into account
since it would make the project unviable.
Page 72 of 158
ITEM
TITLE
Phase1
( till
2020)
SURVEYS
2.1 Land Survey
2.2 Confirmatory Geotechnical Investigation
7
8
9
10
11
12
Page 73 of 158
ESTIMATED COST
Phase-2
( 2020 onwards)
Total
0.00
0.00
0.25
0.75
0.25
0.75
0.60
0.00
0.60
36.00
0.00
0.00
40.00
40.00
41.00
54.00
58.00
76.00
41.00
54.00
98.00
36.00
0.00
0.00
1.60
0.00
500.00
0.00
3.00
36.00
500.00
0.00
4.60
1.80
2.80
1.40
3.00
3.20
5.80
0.00
0.00
4.50
0.90
1.10
1.50
0.00
0.00
4.20
0.00
0.00
1.70
8.70
0.90
1.10
3.20
0.00
0.00
0.40
2.40
0.40
2.40
1.60
0.00
1.60
0.60
0.75
1.35
1.20
0.00
1.20
200.00
210.00
410.00
ITEM
TITLE
Phase1
( till
2020)
13
14
15
16
17
18
12.1 Transportation
ELECTRIFICATION & INSTRUMENTATION
13.1 Electrical installation & distribution
COMMUNICATION
14.1 Communication network
DREDGING
15.1 Dredging (Provisional)
15.2 Navigational Aids
TUGS & OTHER FLOATING CRAFT
16.1 Tugs & floating crafts
PROFESSIONAL FEES
17.1 Project reports & approvals
17.2 Detailed engineering and project monitoring
17.3 Other professional fees
MISC. COSTS & CONTINGENCIES
18.1 Misc costs
18.2 Contingencies
ESTIMATED COST
Phase-2
( 2020 onwards)
Total
Through
subcontract
20.00
25.00
45.00
0.50
0.50
1.00
0.00
0.00
190.00
3.80
190.00
3.80
Through
subcontract
6.00
4.00
0.50
10.00
16.50
1.25
16.00
20.50
1.75
2.50
36.30
3.25
78.85
400.00
1250.00
5.75
115.15
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.
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.
Page 74 of 158
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
Unit of measurement
Port dues
INR/GRT
Pilotage
INR/GRT
INR/GRT/Hour
INR/TEU
INR/TEU
Similarly, the cargo related charges for bulk and dry-bulk cargo shall consist of the following
components as shown in the table below:
Particulars
Average wharfage charges
Composite handling charges
Page 75 of 158
Vessel related
charges
Cost parameter
Port dues
Pilotage charges
Berth hire charges
Cargo related
charges
Wharfage charges
Cargo handling charges
Table 32: Tariff for container vessels
Heading
Vessel related
charges
Page 76 of 158
Cost parameter
Port dues
Pilotage charges
Unit of
Measurement
Unit of
Measurement
Container vessels
4.00
5.00
0.10
250.00
250.00
4.00
5.00
Heading
Cost parameter
Cargo related
charges
Wharfage charges
Cargo handling charges
Table 33: Tariff for bulk coastal vessels
Unit of
Measurement
0.10
25.00
15.00
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.
Page 77 of 158
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.
Bulk ( Mn Tonnes)
2015
1.527
2020
1.904
2025
2.398
2030
3.040
2035
3.839
2040
4.937
Table 34: Projected traffic for financial modeling8
Container ( Mn Tonnes)
0.680
0.814
0.989
1.215
1.504
1.868
Total Cargo ( Mn
Tonnes)
2.207
2.718
3.387
4.255
5.343
6.8057
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
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.
Page 78 of 158
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.
Phase
Time frame considered
9
Existing infrastructure
Till 2020
Phase I
Till 2020
Phase II
From 2020 onwards
Total
Table 35: Summary of phase wise investment details
Unit
70%
30%
49%
51%
10%
13%
8%
40%
11%
10 years
2 years
2 years
0.5 month
Page 79 of 158
0.5 month
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
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.
1
Description
5% of total revenue
Page 80 of 158
Sr.
No.
4
Description
15
10
11
5%
Description
1.
12 months
2.
270
3.
16 hours
4.
5.
6.
7.
Page 81 of 158
Sr.
No.
Description
8.
75%
9.
10.
11.
12.
15.33 hours
13.
14.50 hours
14.
15.
16.
17.
Page 82 of 158
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
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
Year
2015
2020
2025
2030
2035
2040
Table 43: EBITDA
In Rs. Million
EBIDTA
91.53
253.17
365.20
689.53
1525.75
2273.77
Page 83 of 158
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
Page 84 of 158
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.
Page 85 of 158
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 )
Page 86 of 158
Place
Cochin
Cochin
Cochin
Alleppey
Commodity Boards
Sr. No Name of organization
5.
Rubber Board
6.
Tea Board
7.
Coir Board
8.
Coconut Development Board
9.
Spices Board
10.
Coffee Board
Place
Kottayam
Cochin
Cochin
Cochin
Cochin
Bangalore
Customs Entities
Sr. No Name of organization
11.
Cochin Custom House Agents Association
12.
Cochin Customs House
13.
Cochin Clearing House Pvt Ltd
14.
Paul Abrao & Sons
15.
Aspinwall
16.
Jai Narayana Shipping
17.
Oriental EXIM Agency
Place
Cochin
Cochin
Cochin
Cochin
Cochin
Cochin
Cochin
Shipping Companies
Sr. No Name of organization
18.
Shreyas Shipping & Logistics
19.
Seaways Shipping Limited
20.
Caravel Logistics
21.
Vikram Logistics
22.
Jindal Waterways
Place
Mumbai
Cochin
Chennai
Bangalore
Cochin
Industry / Companies
Sr. No Name of organization
23.
Kerala Balers
24.
William Goodacre & Sons India (P) Ltd
Page 87 of 158
District
Alleppey
Alleppey
Industry
Coir
Coir
Sr. No
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.
52.
53.
54.
55.
56.
Name of organization
Cocomats International
Ceyenar Chemicals Pvt. Ltd
Midas Treads (India) Pvt Ltd
Kailas Cashews
Rajan Cashew Co.
Lourdes Matha Cashew Industries
St. Pauls Cashew Factory
Asiatic Export Enterprises
Vijayalaxmi Cashew Co.
Capithans / Veronica Marine Exports
Indian Aquatic Products
Kerala Minerals and Metals Ltd
Indian Rare Earths
Kerala Ceramics
DCruz Navigation
Greenland Paper Mills
RPC Paper Mills
Travancore Titanium Products Ltd
English Indian Clays Ltd.
Terumo Penpol
Kerala State Industrial Development Corporation
A V Marbles
Variety Marbles
Gemwood
Bharat Petroleum Corporation Limited
Grasim Industries
ACC (Gujarat Ambuja Cement)
Sanghi Cement
Malabar Cements
Cochin Condiments
Leo Exports
Lords Flavours
District
Alleppey
Kottayam
Kottayam
Kollam
Kollam
Kollam
Kollam
Kollam
Kollam
Kollam
Kollam
Kollam
Kollam
Kollam
Kollam
Kollam
Kollam
Trivandrum
Trivandrum
Trivandrum
Trivandrum
Trivandrum
Trivandrum
Cochin
Cochin
Mumbai
Mumbai
Ahmedabad
Alleppey
Idukki
Idukki
Idukki
Industry
Coir
Rubber
Rubber
Cashew
Cashew
Cashew
Cashew
Cashew
Cashew
Marine Food
Marine Food
Titanium di-oxide
Sillimanite / ilmenite
Clays
Sand
Paper products
Paper products
Titanium di-oxide
Clays
Blood bags
Industrial Development
Marbles
Marbles
Wooden products
POL
Cement
Cement
Cement
Cement
Spices
Vehicles
Spices
57.
Idukki
Tea
58.
Idukki
Tea
59.
Idukki
Ayurvedic medicine
60.
Eastern Condiments
Idukki
Page 88 of 158
District
Tuticorin
Tuticorin
Tuticorin
Tuticorin
Tuticorin
Tuticorin
Tuticorin
Tuticorin
Tuticorin
Tuticorin
Tuticorin
Tuticorin
District
Tuticorin
Tuticorin
Tuticorin
Madurai
Coimbatore
Tirupur
Tirupur
Tuticorin
Industry / Companies
Sr. No
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Page 89 of 158
Name of company
Peacock Apparels Pvt. Ltd.
Fenner (India) Ltd.
Thiagarajar Mills Ltd.
T V S Srichakra Ltd.
Global Poly Bags Inds. Ltd
TVS Interconnect Systems
Vaigai Chemical Industries
JVS Export
S.S.N. Trading Company
Triumph Enterprises and Investment Pvt.
Ltd.
District
Madurai
Madurai
Madurai
Madurai
Virudhunagar
Madurai
Madurai
Madurai
Madurai
Madurai
Industry
Textiles
Rubber
Textiles
Tyres
Polyethylene bags
Electrical switches
Food processing
Made-ups, fabrics trading
Cement trading
Cement trading
Sr. No
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
Name of company
Concord Exports
Dunite Rocks Pvt. Ltd.
S. Jawaharlal & Co.
Aruna Alloy Steels Pvt. Ltd.
Prime Stones
Sundaram Industries Ltd.
Sourz Agri Food Processing (P) Ltd.
Arkay Rock Produce Pvt. Ltd.
Madura Stones Pvt. Ltd.
Kaltec Granites Pvt. Ltd.
Rajah Green Fields
Standard Granites
Stanco Traders
Standard Match Co
The Mehta Industries
Chellsons Packaging Pvt Ltd
Sripathi Paper & Boards Pvt Ltd
Lovely Offset Printers Pvt Ltd
Supreme Duplux Board Mills (P ) Ltd
Metal Powder Co. Ltd
Hi-Tech Arai Ltd.
Madura Coats Pvt. Ltd.
Hari & Co
Loyal Textiles Mills Ltd.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.
52.
Vigneshwar Exports
Harvell Cocopeat
A to Z Tiles Park
D Kamak Bathe Homes
Prabhat Saw Mills
Tata Coffee Limited
Sigma Agro Derivatives (P) Ltd.
Shri Renuga Textiles Ltd.
Azaad Timber
Kumar Dhall Mills
S. K. Aiyakkalai Nadar & Son
Sri Lakshmi Dhall Mills
Theni Guru Krishna Textile Mills (P) Ltd.
NVS Agro Derivatives
M. Muthuraj (HUF)
Menaka Cotton Mills Ltd.
Shri Renuga Soft-X Towels Ltd
Geetha Timbers Ltd.
Page 90 of 158
District
Madurai
Madurai
Madurai
Madurai
Madurai
Madurai
Dindigul
Madurai
Madurai
Hosur
Madurai
Virudhunagar
Virudhunagar
Virudhunagar
Virudhunagar
Virudhunagar
Virudhunagar
Virudhunagar
Virudhunagar
Madurai
Madurai
Madurai
Tuticorin
Tuticorin /
Tirunelveli
Tirunelveli
Tirunelveli
Tirunelveli
Tirunelveli
Tirunelveli
Theni
Theni
Theni
Theni
Theni
Theni
Theni
Theni
Theni
Theni
Theni
Theni
Theni
Industry
Agri/Food exports
Granite
Cement, timber trading
Steel products
Granite
Rubber
Food processing
Granite
Granite
Granite
Coir Pith
Granite
Granite
Matches
Slack & residual wax
PVC shrink film labels
Paper & related products
Books
Paper & related products
Aluminium
Rubber
Threads
Timber
Textiles
Food processing
Coco products
Marbles/ Tiles
Marbles / Tiles
Timber
Coffee
BBQ Briquette
Textiles
Wood & timber
Agri/Food products
Agri/Food products
Agri/Food products
Textiles
Coir pith & products
Agri/Food products
Textiles
Textiles
Wood & timber
Sr. No
53.
54.
55.
56.
57.
58.
59.
60.
61.
62.
63.
64.
65.
66.
District
Theni
Virudhunagar
Virudhunagar
Virudhunagar
Virudhunagar
Virudhunagar
Dindigul
Dindigul
Dindigul
Dindigul
Dindigul
Dindigul
Dindigul
Dindigul
Industry
Wood & timber
Paper
Polyethylene bags
Granite
Textiles
Textiles/Garments
Textiles
Granite
Food processing
Food processing
Chemicals
Food processing
Coir products
Textiles
67.
68.
69.
70.
71.
72.
73.
74.
75.
76.
77.
78.
79.
80.
81.
82.
83.
Name of company
Geetha Timbers & Plywoods Ltd.
Srinivas Fine Arts Pvt. Ltd.
Universal Polybags Inds
Vel Stonex Pvt. Ltd.
V T M Ltd.
SFA Technical Creations (P) Ltd
Ambica Cotton Mills
Arkay Glenrock Pvt. Ltd
Intl Agricultural Processing Pvt. Ltd.
Bnazrum Agro Exports (P) Ltd.
Tanmix Company
Veg N Table Food Processing Pvt. Ltd.
Sai Cocopeat Export Pvt. Ltd.
Bannari Amman Spinning Mills Ltd. / Shiva
Texyarn Ltd.
C A V Cotton Mills / Sangeeth Group
G V G Paper Mills Pvt. Ltd.
Danalakshmi Paper Pvt. Ltd.
Sudhan Spinning Mills Pvt. Ltd.
Gherkins Agro Exports (India) Pvt. Ltd.
St. Roche Exports
Nagammal Mills Ltd.
Kanam Latex Industries Pvt. Ltd.
APN Shell Craft
Kanyakumari Marine Foods
V. V. Mineral
M. S. S. Asan Exports
Kumaran Fishnets Limited
Indian Rare Earth Limited
Mercury Fishnet Limited
Suresh Marbles & Granites
Thiraviyam Coco Products
Dindigul
Dindigul
Dindigul
Dindigul
Dindigul
Kanyakumari
Kanyakumari
Kanyakumari
Kanyakumari
Kanyakumari
Kanyakumari
Kanyakumari
Kanyakumari
Kanyakumari
Kanyakumari
Kanyakumari
Kanyakumari
Textiles
Paper
Paper
Textiles
Food processing
Various
Textiles
Latex products
Seashells handicrafts
Fish export
Minerals
Agricultural products
Fishnets
Minerals
Fishnets
Marbles
Coco Products
84.
85.
86.
87.
88.
89.
Sabare & Co
Jeyram Marbles
Royal Marbles
Shine Marbles
Lebanon Christopher Enterprises Pvt Ltd
Jaya Timber
Kanyakumari
Kanyakumari
Kanyakumari
Kanyakumari
Kanyakumari
Kanyakumari
Medicinal herbs
Marbles
Marbles
Marbles
Timber
Timber
Page 91 of 158
Page 92 of 158
Table 1: Hypothesis test for Food & Agri Processing Cargo from Madurai
Summary Statistics on Food & Agri Processing Cargo from Madurai
Particulars
Value
Units / remarks
42
Nos.
Nos.
Total Traffic
34736.14
tons
14149.01
tons
1.0
Sample proportion
0.4044
Weighted sample
proportion
0.5
Assumed proportion
0.3470
From sample
-0.2753
From sample
0.8289
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
No. of players in the category
Value
Units / remarks
154
Nos.
13
Nos.
Total Traffic
27736.5
tons
16220.5
tons
Page 93 of 158
0.7317
Sample proportion
0.75
Assumed proportion
0.1231
From sample
-0.1624
From sample
0.8737
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
No. of players in the category
Value
Units / remarks
17
Nos.
Nos.
Total Traffic
9057.2
tons
8505.3
tons
0.2614
Sample proportion
0.30
Assumed proportion
0.1661
From sample
-0.2322
From sample
0.8240
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
Page 94 of 158
Value
Nos.
27978
tons
1220
tons
0.0526
Sample proportion
0.053
Assumed proportion
0.0998
From sample
-0.0041
From sample
0.9969
Units / remarks
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
Value
Units / remarks
4
Nos.
22160
tons
9850
tons
0.0629
Sample proportion
0.063
Assumed proportion
0.1214
From sample
-0.0004
From sample
0.9996
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
6
Nos.
Total Traffic
70000
tons
27931
tons
0.9474
Sample proportion
0.85
Assumed proportion
0.0912
From sample
1.0692
From sample
0.3338
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
Value
Units / remarks
1
Nos.
7813
tons
5000
tons
0.7246
Sample proportion
0.80
Assumed proportion
0.3159
From sample
-0.2386
From sample
0.8509
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
Value
Units / remarks
6
Nos.
100318
tons
8400
tons
0.1541
Sample proportion
0.15
Assumed proportion
0.1474
From sample
0.0280
From sample
0.9787
Total Traffic
Traffic handled by Sample entities
Proportion of respondents saying yes for diverting traffic to
Kollam
Estimate taken by Deloitte (Null hypothesis H0: p = 0.15)
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
Page 97 of 158
Value
Nos.
23938
tons
365
tons
0.1096
Sample proportion
0.125
Assumed proportion
0.1397
From sample
-0.1103
From sample
0.9175
Units / remarks
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
Value
Units / remarks
6
Nos.
372497
tons
65600
tons
0.7927
Sample proportion
0.80
Assumed proportion
0.1655
From sample
-0.0442
From sample
0.9664
Total Traffic
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
Value
Units / remarks
2
Nos.
8680
tons
6950
tons
0.7597
Sample proportion
0.70
Assumed proportion
0.3021
From sample
0.1976
From sample
0.8757
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
Page 99 of 158
No. of
players
Traffic
Handled
(tons)
Baseline figure
taken (tons)
Titanium Di Oxide
9200
Yes
9200
Selemanite
400
Yes
400
Blood Bags
140
Yes
140
Clay
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
Total traffic
potential (tons)
Baseline figure
taken (tons)
Timber ( Kerala)
24000
48000
48000
Timber ( Tamil
Nadu)
1500000
128000
25600
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
2010201620212026203120362015
2020
2025
2030
2035
2040
Low
5%
3%
3%
3%
3%
3%
Page 104 of 158
Medium
High
8%
10%
5%
6%
5%
6%
5%
6%
5%
6%
5%
6%
The growth of raw cashew nuts import cargo in Thankassery port has been worked out as under
In000 tonnes
Baseline
Scenario
2015
2020
2025
2030
2035
2040
open cargo
as on 2009
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
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.
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
2010201620212026203120362015
2020
2025
2030
2035
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
Baseline
open cargo
as on 2009
Scenario
In000 tonnes
2035
2040
2015
2020
2025
2030
49
42
36
31
27
23
Medium
56
53
51
48
46
43
High
59
59
59
59
59
59
59 Low
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
2010201620212026203120362015
2020
2025
2030
2035
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
2015
2020
2025
2030
2035
In000 tonnes
2040
Baseline
open cargo
as on 2009
Scenario
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
2010201620212026203120362015
2020
2025
2030
2035*
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
Page 107 of 158
In000 tonnes
2035
2040
Baseline
open cargo
as on 2009
Scenario
2015
2020
2025
2030
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 takenScenario
Growth Rate
in %
Low
Medium
High
3%
5%
8%
Scenario
2015
2020
2025
2030
In 000 tonnes
2035
2040
72
Low
86
100
116
119
123
126
Medium
96
123
157
165
173
182
High
114
168
247
266
288
311
Scenario
Growth Rate
in %
Low
Medium
High
5%
15%
20%
Accordingly the growth trends of waste paper / newsprint in Thankassery port is mentioned below
In 000 tonnes
Baseline
open cargo
as on 2009
5.3
Scenario
2015
2020
2025
2030
2035
2040
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
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
20102015
2%
4%
6%
Low
Medium
High
Baseline
open cargo
as on 2009
Growth rate
202120262025
2030
2%
2%
4%
4%
6%
6%
20162020
2%
4%
6%
Scenario
2.61 Low
2015
2020
20312035
2%
4%
6%
2025
20362040
2%
4%
6%
2030
In 000 tons
2035
2040
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
Baseline
open cargo
as on 2009
Scenario
0.30 Low
2015
2020
2025
2030
2035
In 000 tons
2040
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
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
Low
Medium
High
20102015
2%
5%
7%
20162020
2%
5%
7%
Growth rate
202120262025
2030*
2%
2%
5%
5%
7%
7%
20312035*
2%
5%
7%
20362040*
2%
5%
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
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
Figure 18 : Exports trends of Cashew Nut Shell Liquid ( Kerala vis--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
Low
Medium
High
20102015
2%
4%
6%
20162020
0%
0%
0%
Growth rate
202120262025
2030
2%
0%
4%
0%
6%
0%
20312035
2%
4%
6%
20362040*
0%
0%
0%
Scenario
2015
2020
2025
2030
In 000 tonnes
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
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.
10
Low
10
Medium
11
High
11
13
10
Clay ( Coastal)
Baseline
open cargo
as on 2009
30
Scenario
2015
2015
2020
2025
2020
2030
2025
2035
In 000 tonnes
2040
Baseline
open cargo
as on 2009
2030
2035
2040
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
In000 tonnes
Baseline
open cargo
as on 2009
Scenario
2015
2020
2025
2030
2035
2040
Titanium
Di-Oxide
(KMML)
7.2
Low
Medium
7.5
7.6
7.8
8.1
8.1
8.6
8.4
9.1
8.8
9.6
9.1
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
Scenario
Low
Medium
High
20102015
2%
5%
8%
20162020
2%
5%
8%
Growth rate
202120262025
2030
2%
2%
5%
5%
8%
8%
20312035*
2%
5%
8%
20362040*
2%
5%
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
In000 tonnes
Finished
Page 115 of 158
Baseline
open cargo
as on 2009
Scenario
2015
2020
2025
2030
2035
2040
125
Low
141
155
172
189
193
197
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
Low
Medium
High
20102015
3%
7%
9%
20162020
3%
7%
9%
Growth rate
202120262025
2030
3%
3%
7%
7%
9%
9%
20312035
3%
7%
9%
20362040
3%
7%
9%
Based on the above, the likely growth trends of cement is indicated below
Cement
2015
2020
2025
2030
In 000 tonnes
2035
2040
Baseline
open cargo
as on 2009
Scenario
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
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
In000 tonnes
Baseline
Scenario
2015
2020
2025
2030
2035
2040
open cargo
as on 2009
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.
Baseline
open cargo
as on 2009
Scenario
2015
2020
2025
2030
18
Low
20
22
24
26
In 000 tonnes
2035
2040
29
35
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
2015
2020
2025
2030
In 000 tonnes
2035
2040
Baseline
open cargo
as on 2009
Scenario
17
Low
18
19
20
20
21
22
Medium
19
20
21
23
24
26
High
19
21
23
25
28
31
As a result, during Apr Dec 2008 Indias garment exports grew by 7% (y-o-y) as against a growth of
9% (y-o-y) in FY08 whereas Indias 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
Medium
24
25
25
27
26
29
28
31
29
34
31
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
16
Low
17
18
19
19
20
21
Medium
18
19
21
23
26
28
High
18
21
24
28
32
37
2015
2020
2025
2030
2035
2040
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
Option 110
13.1
Option 211
13.2
Option 1
13.3
Option 2
13.4
Option 1
13.5
Option 2
13.6
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
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
1. Any delay in approval and subsequent
resources (financial and technical) for building
disbursement of the allotted funds might lead
the facilities and hence would not have to
to possible postponement of the completion
depend on a third party.
of the facilities for phase - 1
2. For obtaining any approval / clearance from a 2. In the event of a third party developing the
particular state regulatory or government
facilities, there would have been checks and
agency, the same would be expedited earlier
penalties based on completion of certain
by the state government through its intermilestones, which would have enforced the
departmental connections. Comparatively the
timely completion of the project. In the
time taken for a private developer in obtaining
proposed scenario, the government cannot
the same set of clearances may be more.
impose a penalty on itself. In the absence of
any strict milestone completion schedule /
3. With the funds already been approved for
deadlines, there might be possibilities of
development of infrastructure facilities etc,
completion work getting delayed.
the disbursement might be faster for the
government than for a private party who
3. Any delays in the completion of the facilities
would be required to raise his own funds for
for Phase I might result into cost over runs
the project.
leading to the project cost increasing from
anywhere between 5 to 25%. This has
4. The entire port has been completed by the
happened in the past for Kollam port.
state government so far and only a Rs. 40
crore investment is pending for phase 1. It
4. In the event of purchase of material handling
makes sense that the government completes
equipments which is part of the Rs. 40 Cr
this (provided it is able to provide funds) and
investment, there might be delay in obtaining
Page 130 of 158
Strengths
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.
Opportunities
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.
Weakness
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
Threats
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..
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
The private party invests in the material
handling equipment of Rs. 20 Cr
handling equipment of Rs. 20 Cr
1. In the event the private party is made to invest 1. In the event the private operator is asked to
in the material handling equipment also, the
invest money on obtaining the material
application of private capital will free up
handling equipment and installing the same
government funds ( to that extent of the funds
at the port, the perceived costs are high for
infused by private party) for other priority
the government. Besides the borrowing cost,
projects including on access infrastructure and
there is a profit element in the equity portion
protective works relating to port extension
of the financing, which is higher than the debt
and on renovation projects
cost. That is the price the government will
pay for passing off the risk to the private
sector
2. The functions can be performed at a price that
is substantially lower than the cost of
conducting them in the public sector
Opportunities
The private party invests in the material
handling equipment of Rs. 20 Cr
Threats
The private party invests in the material
handling equipment of Rs. 20 Cr
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.
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 -
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
Sr. No
3- iv
3- v
3- vi
3- vii
3- viii
April,
May,
2010
2010
1.9
1.9
1.4
1.4
1.2
1.2
1.2
1.2
0.9
0.9
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 KMMLs
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.
Figure 22 : Overview map of Kollam to Kayamkulam area
Source: Google map
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
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.
Page 138 of 158
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.
Figure 23 : Proposed rail alignment from existing rail head to Thankassery port
Source: Survey conducted by Atlas Survey Engineering System, Kollam
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. Fishermens 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 Cashews 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. Fishermens Single storied residential building - 28 numbers.
16. Empty land
17. Fishermens Single Storied residential building - 72 numbers.
144.00
266.70
9.00
1.80
421.50
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
Approach road
cost
Parameter
Cost factor
In Rs.
million
36.00
90.00
30.00
30.00
7.70
7.50
135.20
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.
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 -
2015
2020
Low
2,024,156
2,215,084
Medium 2,207,468
2,718,296
High
2,305,530
3,073,216
Table 48: Revised traffic projections in tonnes
2025
2,444,550
3,387,763
4,139,866
2030
2,694,710
4,255,490
5,596,144
2015
2020
2025
2030
Low
1,524,156
1,715,084
1,944,550
2,194,710
Medium
1,707,468
2,218,296
2,887,763
3,755,490
High
1,805,530
2,573,216
3,639,866
5,096,144
Table 49: Traffic projections in tonnes as indicated in the draft DFR
2035
2,965,614
5,343,259
7,504,658
2035
2,465,614
4,843,259
7,004,658
2040
3,275,218
6,805,717
10,280,692
2040
2,775,218
6,305,717
9,780,692
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--vis the cost to be incurred and the cargo volume to be generated also
has to be considered.
Sr
No
Parameter
2
Cost of dredging in Phase 1
3
Total
Table 50: Additional cost to be incurred for berthing of 20,000 DWT vessels.
76.00*
120.00
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
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
Option 2
( maximum vessel size of
( maximum vessel
20,000 DWT)
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
Option 2
( maximum vessel size of
( maximum vessel
20,000 DWT)
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
Option 2
( maximum vessel size of
( maximum vessel
20,000 DWT)
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
Option 2
( maximum vessel size of
( maximum vessel
20,000 DWT)
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
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.
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
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
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.
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
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
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
Annexure 13.7
Scenario 4 - 100% of the rail and road connectivity cost will be borne by the Government
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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