River Cruise Karnataka

Development of Cruise Tourism in Karnataka
GOVERNMENT OF KARNATAKA INITIATIVE
GOVERNMENT OF KARNATAKA
INITIATIVE
DEVELOPMENT OF RIVER CRUISE IN KARNATAKA
PROJECT REPORT
TOURISM PROJECTS FOR INVESTMENT

OPPORTUNITIES
INVEST KARNATAKA 2016

January 2016

Table of Contents
1.
INTRODUCTION ............................................................................................................................................. 4
PROJECT IDEA ................................................................................................................................................................4
OBJECTIVE ....................................................................................................................................................................5
SCOPE ..........................................................................................................................................................................6
APPROACH AND METHODOLOGY .......................................................................................................................................6
LIMITATIONS .................................................................................................................................................................7
2.
SECTOR PROFILE ............................................................................................................................................ 8

INDUSTRY OVERVIEW ......................................................................................................................................................8
INDIAN CASE STUDIES ...................................................................................................................................................13
REGIONAL PROFILE .......................................................................................................................................................16
NEED FOR THE PROJECT .................................................................................................................................................18
KEY ISSUES ..................................................................................................................................................................18
3.
PROJECT CONCEPT....................................................................................................................................... 20
DESCRIPTION OF THE PROJECT ........................................................................................................................................20
COMPONENTS OF THE PROJECT .......................................................................................................................................21
SITE ...........................................................................................................................................................................23
DEVELOPMENT NEEDS, PUBLIC NEEDS AND PLANNING CONSIDERATION .................................................................................27
4.
MARKET ASSESSMENT ................................................................................................................................. 28

INDUSTRY OUTLOOK MARKET DEMAND .........................................................................................................................28
SWOT ANALYSIS .........................................................................................................................................................29
5.
STATUTORY AND LEGAL FRAMEWORK ........................................................................................................ 31

DRAFT RIVER CRUISE POLICY, 2009 ................................................................................................................................31
INLAND WATER POLICY .................................................................................................................................................32
GUIDELINES FOR PRIVATE INVESTMENT IN INLAND WATER TRANSPORT (IWT) SECTOR..............................................................32
INLAND VESSELS ACT 1917 (I.V. ACT) .............................................................................................................................33
INLAND WATER AUTHORITY OF INDIA ACT 1985 (IWAI).....................................................................................................33
RIVER BOARDS ACT, 1956.............................................................................................................................................34
RECOMMENDATIONS FOR RIVER CRUISE DEVELOPMENT ......................................................................................................34
6.
ENVIRONMENTAL & SOCIAL IMPACTS ......................................................................................................... 36

ENVIRONMENTAL IMPACT ..............................................................................................................................................36
SOCIAL IMPACT ............................................................................................................................................................37
MITIGATION MEASURES ................................................................................................................................................37
7.
PROJECT FINANCIALS ................................................................................................................................... 38

GENERAL ASSUMPTIONS ................................................................................................................................................38
COST ESTIMATION ........................................................................................................................................................39
REVENUE STREAMS.......................................................................................................................................................41

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

SCENARIO ANALYSIS .....................................................................................................................................................42
8.
OPERATING FRAMEWORK ........................................................................................................................... 43

RISKS AND MITIGATION .................................................................................................................................................43
INDICATIVE PROJECT STRUCTURE .....................................................................................................................................44
INDICATIVE QUALIFICATION AND SELECTION CRITERIA .........................................................................................................46
9.
WAY AHEAD ................................................................................................................................................ 48

GOVERNMENT OBLIGATIONS FOR DEVELOPMENT ...............................................................................................................48
PROJECT DEVELOPMENT FRAMEWORK .............................................................................................................................48
10.
CONCLUSION ........................................................................................................................................... 50
ANNEXURE 1 ........................................................................................................................................................ 51
ANNEXURE 2 ........................................................................................................................................................ 62
List of Tables
TABLE 1: TOURIST ARRIVALS FOR CRUISING IN INDIA..................................................................................................................9
TABLE 2: INDICATIVE TARIFF FOR HOUSE BOATS IN KERALA .......................................................................................................15
TABLE 3: COMPARATIVE ANALYSIS OF RIVER COURSES IN KARNATAKA .........................................................................................17
TABLE 4: CRUISE LINERS IN INDIA .........................................................................................................................................21
TABLE 5: POTENTIAL MARKET DEMAND FOR RIVER CRUISES IN KARNATAKA..................................................................................29
TABLE 6: SWOT ANALYSIS .................................................................................................................................................29
TABLE 7: DEMAND ASSUMPTIONS ........................................................................................................................................38
TABLE 8: TRIPS ASSUMPTIONS .............................................................................................................................................39
TABLE 9: OCCUPANCY OVER THE YEARS .................................................................................................................................39
TABLE 10: FINANCING ASSUMPTIONS ...................................................................................................................................39
TABLE 11: COST ESTIMATES ................................................................................................................................................39
TABLE 12: OVERALL INVESTMENT REQUIREMENTS FOR RIVER CRUISE TOURISM IN THE STATE ...........................................................40
TABLE 13: O&M EXPENSES ASSUMPTIONS ...........................................................................................................................40
TABLE 14: O&M EXPENSES ...............................................................................................................................................41
TABLE 15: REVENUE STREAMS ............................................................................................................................................41
TABLE 16: SENSITIVITY ANALYSIS .........................................................................................................................................42
TABLE 17: RISK MATRIX ....................................................................................................................................................43
TABLE 18: PROJECT STRUCTURES.........................................................................................................................................46

1. Introduction
Department of Tourism (DoT) Government of Karnataka (GoK) is determined to boost the tourism
industry in the state. The Tourism Sector has been identified as one of the key sectors propelling the
countrys economic growth. Karnataka State has been ranked as the 3rd preferred destination among
domestic tourists in the tourism sector. Karnatakas thriving economy has created many opportunities
across the State in the last decade.
For GoK, the tourism sector constitutes a real priority because it is an important sector for the
generation of employment, therefore various initiatives are been undertaken with the involvement of all
stakeholders, both public and private, that will foster a more favourable environment for the
development and consolidation of the tourism sector. One of the initiatives in this direction is the
formulation of Karnataka Tourism Policy for 2015-20.
GoK intends to encourage the investors to invest in the tourism sector. A host of incentives and
concessions are provided to the investors in tourism sector, in the New Tourism Policy for 2015-20. A
large emphasize has been laid on enhancing hospitality services and standards, promoting innovative
developments and rejuvenation of older tourist attractions, with the aim of offering visitors the
experience that will commensurate with higher expectations.
With this background, DoT has prepared a shelf of Project Reports of potential tourism projects which
could be undertaken for development along with collaboration with the Private sector. One of the
projects identified for development of River Cruise in Karnataka.
Project Idea
River Cruise Tourism is a distinctive tourism experience which is an amalgamation of luxury, comfort
with state-of-the art exclusive facilities. The unique features of cruise tourism can be summarized as
follows:
Highly service-oriented
Cruises provide exclusive hospitality services and other facilities including pool, Jacuzzi, sauna, gym,
on-board lectures, card rooms, ayurvedic spa, organized games and contests, lounges, nightclubs,
movies, dancing and more.
Home away from Home feel

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

including in cabin ship-to-shore phones (mandatory for marine cruises) make the passengers feel
comfortable and feel at home in the cruise.
Multiple Destination visits

Cruising offers multiple destinations, without the hassles of packing and unpacking. Itineraries
include visits to 8 to 10 destinations (depending on length of cruise).
As per various surveys conducted, the feature of visiting various destinations by traveling through
rivers makes cruise tourism attractive and fascinating. In the Indian scenario, since the concept of
cruises is not yet popular, people would travel for the experience of cruise and not really for
destination. Hence, for a cruise to be successful and attract the local as well as foreign tourists, the
complete package should include a floating resort feel on the ship/ boat/ vessel combined with the
array of exotic destinations.
River cruises are liners that carry tourists aboard, travel in the inland waterways and usually dock
along the river in the cities. River cruise ships are usually smaller vessels, generally accommodating
between 100 and 200 passengers. Depending on the river course (feasibility to navigate ships) and
the demand for cruise travel, river cruising vessels vary in size (those catering for smaller groups of
5-6 passengers and the capacity of catering to more than 1000 passengers).
Due to their smaller size and low draft, river vessels sometimes can go where no other
transportation can, taking passengers to the heartlands of countries where rivers are the only way
to reach many attractions. River cruises are the best way to experience the wilderness in reserve
forests, for instance, the Amazon river cruise which moves through the dense jungles of the region.
Objective
GoK intends to develop cruise tourism related infrastructure in Karnataka to:
i.
ii.
iii.
Attract footfalls, encourage extended stays and provide a wholesome experience to the tourists.
Encourage entrepreneurship and livelihood opportunities for the locals.
Encourage and promote Private Sector Participation in the development of tourism sector.

Scope
The scope of the assignment includes review of inland waterways in Karnataka, analysis of the present
status of river cruise tourism in India, identifying possible issues for development and implementation of
the project and estimation of broad project costs and financial feasibility assessment.
Approach and Methodology

The approach and methodology adopted for the project are given below:
Prioritisation of
locations
Secondary
research review of
inland
waterways
Financial
Analysis
Cost,
Revenues,
O&M
Assessment
Identification
of Key Issues
Environmental
Social
Implementatio
n Structure
Review of
legal and
statutory,
project
structuring
Secondary Research
The objective of this study would be to assimilate the available information and assess the existing
facilities and arrive at relative advantages, constraints, issues for identification/ finalization of project
requirements. The potential for river cruises in various waterways in Karnataka would be studied on the
basis of discussions held with the stakeholders and potential locations would be identified. The
infrastructure requirements for the project development would also be assessed.
Past studies conducted, similar projects developed on a PPP model and growth directions would be
examined in order to review the findings. The legal issues in the development of river cruises would be
addressed.
Financial feasibility analysis
Based on the data collection, analysis and discussions with stakeholders concerned; a financial model
would be prepared. Suitable assumptions regarding the cost, revenue sources and expenses would be
made. A preliminary financial feasibility would be undertaken to assess the development potential of

the site. The financial feasibility analysis would consist of cost and revenue streams estimation, viability
assessment and scenario analysis.
Identification of Key Issues
The economies of the project would be reviewed to identify the key risks associated with the financial
viability of the project and indicative mitigation strategies and risk sharing arrangements would be set
out. Other issues relating to project development would also be highlighted.
Implementation Structures
Based on the market assessment and preliminary financial feasibility analysis, the type of PPP
frameworks best suited for development would be identified. For the suitable PPP option, the risk
analysis and mitigation measures would be studied. Indicative qualification and selection criteria for the
private developer would be set out.
Limitations
The limitations of this assignment are listed below:
1. Findings of the assignment would be on the basis of secondary research.
2. Financial model for a standard model of river cruise would be prepared which could be replicated
in the different river cruises.
3. Technical studies such as hydrographic studies for feasibility of river cruises would have to
undertaken apart from this study before venturing into river cruise development.

2. Sector Profile
River cruises have been predominantly present in rivers that have excellent navigation systems. Cities
like Venice and villages in the backwaters of countries like China and India (western coastline and the
north-eastern States) thrive on river and canal cruises for livelihood. Some of the best examples of river
cruises come from river Amazon, river Nile and river Thames. This chapter discusses the overview of
river cruises industry in India and abroad.
Industry Overview
The following statistical highlights that reveal the growth trends in the global cruise tourism industry:
Over the last decade, the cruise industry has been one of the fastest growing sectors in the
international tourism industry and during the course of 1990s, the industry tripled in size. As of
January 1, 2004 there were 339 active ocean cruise vessels operated by cruise lines around the
world, with the global fleet amounting to a total of 10.9 million gross tons.
Statistics reveal that by the year 2000, the cruise sector alone was carrying an estimated 9
million passengers on 243 vessels. By 2001, it was carrying 10.3 million passengers which
constituted 1.5% of global travelers who used cruise liners making it a $15 billion industry.
Cruise Lines International Association (CLIA) reports an unprecedented 16.8 per cent annual
growth in passenger numbers in US market alone.
Following the events of 11 September 2001, passenger numbers fell dramatically due to
resistance to air travel (to reach cruise-ship ports). However, as per WTO reports, the industry
returned to its previous buoyancy, but with a more moderate growth rate. Cruise ship
passengers currently represent 1.4% of international arrivals and are producing increasing
amounts of revenues in all locations.
Cruising in the Indian Tourism market is growing and there has been an increasing interest in cruise
tourism activities over the past decade. The absence of an affordable cruise along the Indian coastline
and inland rivers is one of the critical reasons for the lack of popularity of cruises among masses. Given
below is the table which sets out the tourists for cruise:

Table 1: Tourist arrivals for Cruising in India

Year
Cruise Tourists
Increase in Cruise
(in millions)
Tourists (%)
2000-01
2001-02
2002-03
2003-04
2004-05
0.041
0.019
0.012
0.025
0.022
70.83
-53.66
-36.84
108.33
-12
International
Arrivals (in
millions)
2.54
2.38
2.73
3.36
3.73
Cruise Tourists as a
% of International
Arrivals
1.61
0.8
0.44
0.74
0.59
Indian ports have been able to attract substantial number of cruise vessels and tourists in recent years.
This trend of cruise tourist arrivals, mainly since 1996, has grown each year. However, the years
immediately after year 2000-01 show a marked decline. This is similar to trends observed
internationally. A percentage of international tourists arriving into a country are generally interested in
undertaking short exploration cruises in and around the country as part of their overall travel plans.
However, due to practically non-availability of facilities for cruise activity in India, this segment has been
untapped as yet.
India has over 7,500 km of coastline with places of great interest for the cruise guest. Government of
India, as part of its Cruise Tourism development initiatives has identified 6 Indian ports to be developed
as world class cruise terminals and to be promoted as integrated Indian cruise circuit. These identified
Ports include Mumbai, Goa, Cochin, New Mangalore, Tuticorin and Chennai. Mangalore port lies in
Karnataka with Goa and Cochin in the vicinity. Presently Mangalore port shares a small portion of cruise
tourists compared to other ports as cruise tourism has not been promoted in Karnataka. At the same
time, Mangalore port has the technical competence, Locational advantage as well as good inland and air
connectivity to be showcased as a call port for Karnataka.
However, all the studies pertaining to cruises are limited to the international marine cruises, the market
for river cruises in India is still a small segment. It is in its nascent stages and requires development in
terms of infrastructure development.
For better understanding of river cruises and their mode of functioning/ operations; some of the notable
international case studies in river cruises are discussed herein below:
Amazon River Cruises

There are many cruises that operate along the river cruise of Amazon which is world famous for the
presence of rainforests and wilderness along its course. Details of few of the cruises that operate along
Amazon are given herein below:
9

Manatee Amazon Explorer Riverboat in Ecuador

The Amazon River system is the one which flows through the
world's largest primeval forest, containing 10% of all existing trees,
70% of all pharmaceutical compounds, and native Indians that live
symbiotically with their unique bio-systems. This is the habitat of
wildlife comprising freshwater dolphins, 500 species of birds, half a
dozen species of monkeys, caimans, tapirs, 2500 species of
butterflies. The new Manatee Amazon Explorer riverboat has been
specially built for cruises in the Ecuadorian rainforest on the Rio Napo.
It visits the Monkey Island, Yasuni National Park and Biosphere Reserve, walk jungle trails and explore virgin
rain forest. The Manatee Amazon Explorer is 90 feet long (27 m) 24 feet wide (7 m) and accommodates 30
passengers in comfortable cabins with private bathrooms and running hot water, individual air conditioning,
on board laundry service, large dining room, inviting bar and lounge area, panoramic terrace, delicious
cuisine and multilingual naturalist guides. It is also equipped with the highest safety standards, personable
service and efficiency.
Manaus cruise in Brazil
The cruise offers an exciting cruise along the Negro and
Amazon rivers with all the comfort and excellent service. The
adventure begins in the city of Manaus, capital of Amazonas,
famous for its spectacular Opera House, designated as
Brazilian historical heritage. Departing from Manaus, the
expedition vessel stops at several points along the amazing
Amazon jungle, and offers excursions on small boats or zodiacs
to explore the dense, virgin vegetation. Adventure seekers
during the cruise come into contact with the most exuberant species of trees, plants, exotic animals and
the local river communities, friendly and hospitable people. Activities proposed during the cruise are
bird-watching, National park visits, wildlife reserve visits, Piranha fishing, trekking, nature hikes, canoe
rides, night excursions and lectures.
Mamore river expedition on board the Flotel Reina de Enin in Bolivia
It is a four day Amazon Riverboat expedition which is a hands-on
discovery of remote Amazon rainforest and rivers near the
Bolivia/Brazil border. The newly renovated, air-conditioned Reina de
Enin Riverboat, explores Bolivia's remote wilds on horseback, hikes,
nature-walks, motorized launch excursions, and from the comfort of
the Reina's viewing decks. Equal in size to California and Texas
combined, Bolivia holds thousands of unexplored Inca and pre-Inca
ruins, thousands of square miles of Amazon rainforest, unsurpassed wildlife viewing, and very few
10

tourists. It is the least populated, least explored of the nine South American countries that comprise the
Amazon Basin. Annual flooding in the Bolivian Amazon ensures minimal human presence and allows
over 1,300 bird, 220 reptile, 100 amphibian, 20 primate, 316 mammal, and thousands of plant species to
dominate. That is the case in the Beni area of Bolivia, where the 2000-mile long Mamore River, the
longest tributary on Earth, floods annually and keeps the region wild.
Iquitos Amazon cruises: Pacaya Samiria reserve, Tres Fronteras & Yurimaguas in Peru
The cruise offers an itinerary of seven days which primarily
would be in the wilderness. The reserves in the region provides
critical habitat for the grey and pink river dolphins, Amazonian
manatees, the black and spectacled caiman, giant South
American river turtle, saddleback tamarin and many monkeys
including the spider, capuchin, and squirrel species. A
preliminary survey of birds has listed over 350 species, of the
eight species of macaw recorded in Peru, five are found in the reserve. This protected area contains 85
lakes which are home to 250 species of fish and the largest variety of flora in Peru, including 847
different species of plants and trees (22 recorded species of orchids). The cruise would take the
passengers amidst the reserves and make them experience nature.
Nile River Cruise

There are many cruises that operate in river Nile and its tributaries, a few of which are discussed herein
below:
River Tosca Cruise
The River Tosca cruise sails the Nile River in luxury and style.
The ship features 42 suites with French balconies, hotelstyle beds and a private bathroom. Each suite is furnished
with a direct dial telephone, a flat-screen TV and an iPod
docking station. Gourmet cuisine is prepared fresh daily
using only the fresh and finest ingredients, often brought onboard from the local markets. Bottled water
and 24-hour specialty coffees and teas are provided in the suite. The cruise offers sunbathing in the
Egyptian sun at the cabana-lined pool or observing the banks of the Nile on the sun deck. At night, there
is onboard local entertainment in the stylish lounge with full-service bar.
11

M S Miriam Cruise
The cruise has a spacious, tastefully furnished lobby
provides a warm welcome into the hospitable vessel. Cabins
are roomy and comfortable, and a 24-hour reception desk
ensures security. The main lounge bar features a dance floor
for evening entertainment which includes an Egyptian
folklore show and discotheque at night. A separate bar area with comfortable Chesterfield sofas offers
panoramic views and a restful place to relax with a book. It has 56 cabins with a passenger capacity of
110.
M S Medea
It is cruise with a passenger capacity of 118 and 60 cabins.
A spacious, elegantly furnished lobby area with 24-hour
reception desk and safe deposit box is both welcoming
and reassuring in the cruise. Currency exchange is
available on board and the lounge is an ideal spot for
relaxing. In the late evening, the Lounge bar serves as discothque emerges as a venue for live evening
entertainment. All cabins feature en-suite bathrooms and views of the Nile.
Thames River Cruise

River Thames of England is also known for its river cruises, a few of which are mentioned herein below:
Princess Thames Cruise
The cruise navigates along the river Thames and is best suited to
organize events such as disco parties and also to enjoy the life along
the banks of river Thames. It has a passenger capacity of buffet dance
for 200 guests in closed saloon or 250 when the open top deck is
utilized. Dinner dance could be arranged for 130 guests and sightseeing for 250 passengers. It has dimensions of length, 115 feet and
breadth of 18 feet.
Old London Cruise
This cruise is having dimensions of length 66 feet and breadth of 16 feet. It is smaller than the Princess
Thames Cruise vessel but is also put to similar use. The life on the banks of the river Thames can be
12

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

130 guests for buffet dance, 106 guests on two decks for dinner
dance or sight-seeing for 140 passengers.
City Cruises also operate on river Thames that offer day cruising
packages such as lunch cruise, dinner cruise, sight-seeing cruise
along the river.
Indian Case Studies

There are many river cruises operating in India, primarily in the northern plains which are home to large
perennial rivers of like the Ganga and the Brahmaputra. In addition to the cruises in the northern plains,
backwater cruises in Kerala and the Mandovi river cruise in Goa are equally popular among the tourists.
An account of the major river cruises that are in operation or under development, in India is given
below:
Brahmaputra River Cruise

Brahmaputra River Cruise is maintained by a private company in the
name of Brahmaputra Cruise Private Limited (BCPL). The
Brahmaputra cruises provide tourists with unprecedented chance of
getting up close and personal with the only male river in the Indian
subcontinent. The cruises features visits and attractions such as the
elephant and jeep safaris at Kaziranga National Park, tea gardens,
visits to Majuli (largest river island), visits to temples (Maa Kamakhya,
Shiv Temple - Sivasagar) and forts which once belonged to the Ahom
Kingdom and many more.
Passenger Capacity
The cruise vessels of Brahmaputra Cruises vary in size. The smallest vessel caters to 24 passengers
whereas the largest vessel caters to 308 passengers.
Itinerary and Duration
13

Cruises go north from Calcutta on river Hoogli, and can be linked with other cruises on the Ganges
proper from the Bangladesh border up to the historic city of Patna. The duration of this package is of 3
nights and 4 days.
Another package is the Cruise in Assam on the Brahmaputra the course of this cruise is beautiful with
marvellous bird life and occasional spotting of Gangetic Dolphin. The cruises here also give access to a
number of Indias National Parks, including Kaziranga and Manas, a Project Tiger reserve on the Bhutan
border. The duration of this package is of 7 nights and 8 days.
Tariff
On twin sharing basis 350 USD per passenger per night and for single supplement is 210 USD.
Ganga River Cruise

Ganga River Heritage Cruise (GRHC) Circuit is being proposed to experience the Ganges. This would
bring a unique experience to tourists and avoid the usual hassles/bustles of rail or road transport with
multi-point transfers and transits. To provide the tourists/pilgrims with the right and tranquil
environment, even the land based stay will not be in Hotels or Guest Houses but at Pilgrimage Park
being exclusively provided to the tourists to enjoy the facilities like yoga, meditation, dharma sabha,
vegetarian meals, library and auditorium under one roof compatible with pilgrimage activities and
ambience.
Project Cost
Is an on-going project with an Estimated Project Cost of Rs. 130 Crores.
The GRHC Circuit is made out of selective tourism destinations covering the pre-colonial, colonial and
post colonial era on the river Ganga with Kolkata as the gateway. The modes in the proposed circuits are
Kolkata, Belur, Dakshineswar, Chandannagar, Chinsurah, Bandel, Kalna, Krishnanagar, Nabadwip,
Mayapur, Palashi, Baharampur, Murshidabad-Lalbag and Azimganj.
Houseboats in backwaters of Kerala

Keralas luxury packed house boats offers to tourists, a cherished and unforgettable backwaters
experience. It would be a blend of tradition with modern amenities. It would cruise over the
14

breathtakingly beautiful backwaters where the tourists enjoy amazing

sightseeing with nature abundant beauty. Often the local cuisines of
Kerala are served on these house boats.
Passenger Capacity
There are single bedroom houseboats for two people and two
bedroom houseboats for four people and three bedroom houseboats
for six, and five bedroom houseboats for ten people.
The cruise covers the beautiful rivers and canals with palm trees and small houses near to it, villages,
paddy fields, churches, etc, the duration will depends on the packages tourist used to select.
Tariff
Table 2: Indicative Tariff for House boats in Kerala
Type of Houseboat
A/c (9PM-6AM) Houseboat
A/c( full time)
Non A/c Houseboat
(in Rs.) / Night

15, 000/
19,000/
14500/-
in (USD) / Night
395
440
355
in (EURO) / Night
315
355
285
Cost for an additional person (above 4 yrs) in the same room: Rs 1000
River Cruises in Goa

Goa is not only about golden beaches spread for miles but also about scenic rivers that make it the best
possible destination for long river cruises. Goa is well known for cruise tourism in India and people who
visit Goa generally make it a point to experience the river cruises there. River cruises contribute
immensely to the State's tourism industry and the river cruise industry in Goa is expanding day-byday. The different types of packages offered by river cruises in Goa on the Mandovi River are as follows:
Sunset Cruise: to enjoy cultural programs including the various types of dances. Sightseeing is also the
part of the sunset cruise.
Time: 6:00 pm to 7:00 pm
Sundown Cruise: Similar to Sunset cruise.
15

Full Moon Cruise: trip offers a good chance to get a magnificent view of the moon.
Pleasure Cruise: is a long trip which starts off by 10.00 am and ends at 3.00 pm. The trip includes
sightseeing. On the way you can enjoy the music along with sun bathing.
Passenger Capacity
About 25 50 people
The itinerary and duration will depend on the packages.
Tariff
This varies according to the package offered.
Regional Profile
Apart from the backwater cruises, Karnataka also has tremendous potential for development of river
cruises along the river courses of some major rivers such as Cauvery and Tungabhadra. The same has
been discussed in this chapter.
Karnataka had introduced a house boat which cruised the backwaters in the coastline. It was
commissioned by the Jungle Lodges and Resorts Limited, Department of Tourism, Government of
Karnataka located at Kemmannu-Hoode backwaters of Udupi taluk. However the project as shelved due
to lack of proper marketing efforts.
Major Rivers of Karnataka
Karnataka is blessed some of the large rivers in India such as Cauvery, Krishna and Tungabhadra. These
major rivers would have potential for cruise tourism which would depend on the river itself as well as
other externalities. An account of the major rivers of Karnataka is set out as Annexure 1 to this report.
16

A comparison of the river courses of the major rivers in Karnataka is given herein below:
Table 3: Comparative analysis of river courses in Karnataka
River
Cauvery
Length
approx
(in km)
765
Krishna
1300
Tungabhadra 531
Sharavathi
128
Kali
Kabini
Sita
River Course
Tourism Potential
Theme
Waterfalls, reservoirs,
flows through reserve
forests and valleys,
perrineal river
Waterfalls, fast flowing
river, perrineal river
Formed by Tunga and
Bhadra, perrineal river
Waterfalls
(Jog),
reservoirs,
dense
underwater vegetation,
flows along the reserve
forests, perrineal river
Waterfalls, fast flowing
river with rapids, dense
perrineal river
Tributary
of
river
Cauvery, relatively slow
moving river, perrineal
river
Waterfalls,
dense
non-perrineal river
Coorg, Mysore, Srirangapatnam, Wildlife,

Bangalore
Religious
Prospects
cruise
for
river
Nature, Conducive in few of its

tributaries
Leisure
Not very conducive

Conducive
Shimoga, Jog, SAgar
Religious, Heritage,
Leisure
Nature, Wildlife
Dandeli
Wildlife, Nature
Not Conducive
Mysore, Nagarhole, Coorg
Wildlife, Nature, Leisure
Conducive
Agumbe, Udupi
Wildlife, Nature, Leisure
Not very conducive
Shimoga, Hampi, Koppal, Haveri
Conducive

The factors that determine the conduciveness of the rivers depend on the type of river course, the
depth of the river, its length, river bed, quantum of water flow round the year and also the width of the
river. The suitability of the river for cruising is also dependant on the urban life along the rivers like
presence of industries, factories, reserve forests, temples, etc. The above table is based on discussions
with the PWD IWT Department and Department of Tourism.
Need for the Project

The need for the project is felt owing to the following reasons:
Availability of more that 3000 kms of rivers in the State

Need to boost up the Tourism Industry in Karnataka
Rising middle class & Increased Affordability
Providing an unique experience to the visitors
Expected Increase in Tourist Footfalls
Encourage livelihood opportunities for the local population.
Key Issues
The key issues in the project are set out in the following figure:
Connectivit
y of Rivers
Basic
Infrastructu
re
Conducive
River
Course
River
Cruise
Low Return
on
Investment
Rationalisati
on of laws
Tourism
potential
18

There are certain factors that determine the feasibility of river cruise which are given herein below;
1.
2.
3.
4.
5.
Availability of related infrastructure for river cruises,

Connectivity of major rivers for longer navigation,
Tourism potential along the river course,
Topography along the river course,
Long gestation period and high operational costs with low return on investment in the business
and
6. Rationalization of laws relating to river cruises.
19

3. Project Concept
The chapter discusses the infrastructure development proposed for development of river cruise in the
four backwaters referred to in the earlier chapter. Two models of development are proposed as part of
this assignment which can be thought through and implemented in any of the backwaters in the State
after undertaking a technical feasibility study.
Description of the Project

Based on the analysis of the existing river cruises in the country and abroad, the following two models of
river cruises are proposed as part of this project:
1. Day Cruise
2. Day and Night Cruise
The rivers in Karnataka cannot support cruises of longer duration owing to the unsuitable terrain and
topography. Hence, a day cruise and utmost a day and night cruise is proposed in certain rivers to begin
with for river cruises in Karnataka.
Day Cruise
The day cruise is proposed to be a cruise along the river which would have more of onboard
entertainment facilities which may include discotheque, billiards and pool table, indoor gaming room,
ayurvedic spa, yoga and recreation centre, a fine dining restaurant, a wildlife lecture, library, etc. The
day cruise would generally be cruising the rivers day time for a maximum of 7-8 hours a day. The idea of
entertainment in day cruise is the facility within the cruise liner rather than journey. The start and end
point of a day cruise would be one point where the tourists/ passengers assemble to embark and
disembark. The cruise would generally be devoid of luxury cabins as the objective of the day cruise is to
experience the facilities on the cruise rather than stay overnight in the cruise. The river cruises in Goa
are generally day cruises.
Day and Night Cruise
The day and night cruise is proposed to be a cruise which would cruise along the river for a day and
night (minimum of 24 hours). The purpose of this cruise would be transportation along with
20

experiencing the facilities on the cruise. The cruise would have cabins for people on board to be
accommodated overnight. The vessel for a day and night cruise would be more expensive owing to extra
facilities that are required. Apart from the cabins, it would also require facilities such as restaurant,
ayurvedic spa, salon, meeting hall, etc. Ideally the cruise would commence at one point and end at
another point (destination). The Brahmaputra river cruise is a day and night cruise which has different
packages with duration as long as 15 days.
Components of the Project

The project components for both the models of river cruises are as follows;
1. Cruise liner
2. On board facilities
3. Off-board infrastructure
Cruise liners
The cruise ship specifications depends on the potential for cruise traveling, cruise travel circuit, number
of trips and the facilities to be provided for amusement of passengers on board. For the purpose of this
project, to estimate the demand references have been made to other similar river cruises operating in
the country. As discussed in the earlier chapters, the other river cruises operating in India, with their
passenger capacity is given herein below:
Table 4: Cruise liners in India
No.
1.
River Cruise
Goa on Mandovi River
Duration of Itinerary
Day cruise
2.
Brahmaputra River Cruise
Upto 15 days
Shorter itineraries available
3.
4.
Ganga Cruise (proposed)

7 days
Kerala backwater cruise Day and Night Cruise
(houseboats)
Passenger capacity
Many vessels with passenger
capacity ranging from 25-50
Smallest vessel carries 24
passengers to the largest
carrying 308 passengers
NA
Upto 16 passengers per
houseboat depending on size
A point to be noted is that of all the river cruises in India, two belong to northern India which ply on the
rivers in the northern plains. The same is conducive for cruising as well. The river cruises on Mandovi
21

river in Goa are day cruises for leisure. The backwater cruises in Kerala are cruises with shorter itinerary
of a day and a night that offer recreation and relaxation. However, the rivers in Karnataka offer a distinct
scenario, the rivers in Karnataka flow through the Western Ghats and the Deccan Plateau; both of these
regions have rugged and tough topography. Hence, the following observations:
1. The itinerary for the river cruise (wherever feasible) cannot be very long. It is ideal to have an
itinerary of a day and night.
2. The capacity of the vessel could be approximately in the range 50-75 passengers.
3. The same vessel could also undertake day cruising as well on certain days of the month.
Apart from the points set out above, the river cruise could also be designed as per the theme of the
cruise (such as heritage, religious, leisure, nature, wildlife, etc.)
On-board Facilities
The on-board facilities, to be provided for the amusement of passengers, are classified as mandatory
and optional facilities as listed below:
Mandatory Facilities
Cabins are required in the event of a day and night cruise to accommodate the passengers
overnight.
Children play area would consist of small area on the deck which would have slides, see-saws,
swings and other facilities for the children to pass time and play
Indoor games parlour provision for playing indoor games like carom, chess, other board games,
etc.
Restaurant/ Fine dining restaurant overlooking the river side is required to be developed. The
restaurant could serve local cuisine as well international cuisine. The ambience of the restaurant
could suit the theme of the cruise.
Optional Facilities
Social dancing evening dancing in the moonlight or a discotheque may be provided on the
deck overlooking the river.
Ayurvedic Spa, Yoga and Meditation Wing which would provide panchakarma and relaxation
techniques for passengers on board.
Magic shows/ entertainment magic, cultural shows, etc. can be organized on board the cruise
for the recreation of passengers.
22

Parties - parties and events can be organized on the liner

Video game parlors would include the video and computer gaming facilities for the youngsters
to enjoy their time on cruise.
Games ad hoc games may also be organized on board.
The extent and the number of on-board facilities required for the project would depend on the river
cruise (scenery), the theme of the cruise and the type/ profile of passengers who travel in the said
cruise. Accordingly suitable modifications may be made to the on-board facilities.
Off-board Infrastructure
The off-board infrastructure that are required for the project include the following:
1.
2.
3.
4.
5.
Jetty facilities in the start and end points (base stations) of the river cruise.
A lounge area and a counter facility close to the jetty.
Dredging (if required) along the river bed.
Connectivity to the base stations of the river cruise.
In Case of Emergency (ICE) units along the river cruise.
Wherever the river cruise terminates or starts at a marine port, then the port infrastructure for
embarking and disembarking can be utilized. In other cases, where the base station happens to be a
river bank then, a jetty facility at the river bank would be required. Dredging would again be required on
a case to case basis. End mile connectivity to the base station would also have to be taken care of by the
concerned government departments. ICE units are advised to be in place at all times during the
operation of the cruise along the river cruise at specified intervals.
Site
On the basis of the analysis of the major rivers in the State, the following sites have been identified to be
the ones that have potential for river cruise:
1. Kabini Reservoir
2. Back-waters of Tungabhadra dam
3. Backwater of Linganamakki dam on River Sharavathi
23

Kabini Reservoir
River Kabini the tributary of river Cauvery which flows through the reserve forests of the wildlife
sanctuary in the south eastern parts of the Nagarhole Wilddlife Sanctuary would be a very promising site
for river cruising to experience the exotic wildlife in the region. The surroundings of River Kabini and the
reservoir is set out in the picture given below. The said site would be conducive for a day cruise or a
night cruise or a day and night cruise as well. The Jungle Lodges and Resorts on the banks of river Kabini
could also provide the required thrust to the development of the river cruise.
The features of the river cruise in Kabini reservoir are as follows:
Annual tourist visits to Kabini River Lodge of Jungle Lodges and Resorts is about 1500 and the
resort enjoys 100% occupancy and has advanced bookings for the resorts
A day or a night cruise (full moon) would be suitable for the Kabini river with a deck passenger
capacity of 50-75.
The cruise would have facilities like the ayurved spa and massage centre, restaurant serving
local cuisine and a canopy overlooking the banks.
The map showcasing the Kabini reservoir and

the existing Jungle Lodges and Resorts is given
herein below;
JUNGLE LODGES
& RESORTS
24

Backwaters of River Tungabhadra

River Tungabhadra formed by the joining of two rivers, the Tunga and the Bhadra is another potential
spot for river cruising. Tungabhadra flows close the world famous ruins of the Vijayanagar Empire at
Hampi, Bellary. Being in proximity to the World Heritage Site, the potential for river cruising in the area
would attractive. A day cruise would be ideal in the backwaters of the Tungabhadra dam and also at the
river course in proximity to the Hampi ruins. Though, the cruise proposed in proximity to Hampi ruins is
to be of smaller passenger capacity and size owing to the low draft and terrain. A houseboat would be
an ideal cruise in the area. River Tungabhadra is a chief tributary of River Krishna and though the general
opinion is that River Krishna is a destructive river due to its silting capabilities, River Tungabhadra still
possesses certain potential for river cruising.
The features of the river cruise in river Tungabhadra is as follows;
River Tungabhadra flows along the ruins of the World Heritage Site at Hampi. The annual
tourists visits to Hampi is about 15 lakhs hence, there is ample demand
The river cruise could ideally be a day/ a night cruise overlooking the Hampi ruins with a
commentary on the history and heritage of the erstwhile Viajyanagar empire and Anegundi. The
passenger capacity of the cruise on the deck could be about 50-75
The cruise vessel is to be ideally such that it can sail for a smaller draft and sustain the rocky bed
of the river. The facilities on the deck would be an ayurved spa, indoor games parlour that
facilitate local games like Channamane, Choukabara, etc, commentary/ video on the Hampi
heritage and culture.
The map given below shows the river course and the site for cruising in River Tungabhadra.
25

Backwater of Linganamakki dam

River Sharavathi is well known in India for the high plunge it takes of the gorge at Jog, Shimoga forming
the highest waterfalls in India. In Shimoga there are two dams constructed across this river both which
give way to reservoirs. The Linganamakki reservoir is formed in an area which is rich in wildlife hence,
this area has tremendous potential for river cruising. The backwaters of the reservoir and the tract
which leads to Honnemaradu would be a hotpot for cruising.
The features of Sharavathi river cruise is as follows;
The annual tourist flow to Jog falls is 4.5 lakhs of which 99% are day tourists. The river cruise
proposed in the region would enhance the duration of tourist stays in the region. The idea is to
propose for a cruise of one day and one night duration in the backwaters of Sharavathi.
The passenger capacity of the vessel on deck would be about 75 and a cabin capacity of around
25-30 tourists.
26

The facilities on board the vessel would include cabins, canopy area, ayurved spa and massage
centre, wildlife movie shows, commentary on the culture of Malnad region and a fine dining
restaurant serving local cuisines.
The map given below sets out the site for river cruising in along Sharavathi.
Development Needs, Public Needs and Planning Consideration

The developmental requirements for the project shall be in conformity to the existing by-laws and
regulations from time to time. The cruise vessel to be deployed shall be safe and secure, approved by
the appropriate authority for commutation of public.
27

4. Market Assessment
This section would discuss the market for river cruises, the pros and cons of development, opportunities
and threats for river cruises in the State. A SWOT analysis for the same is also set out in this section.
Industry Outlook Market Demand

The market for river cruises in India is latent and river cruising itself in India is in its nascent stages. The
Inland Waterways Authority of India has identified six National Waterways in the country but none of
these waterways are in Karnataka. All except one of the National Waterways lie in the northern India
and the one in southern India lies in Andhra Pradesh along river Krishna.
The River Cruises industry comprises the following stakeholders:
1.
2.
3.
4.
5.
6.
Department of Inland Water Transport

Department of Tourism
River Cruise Operators/ Cruise Liners
Ship Agents
Tour Operators
Provision suppliers
Development of infrastructure along the river cruise and provision for safe navigation would have to
ensured for the progress of river cruise in the country. In Karnataka, owing to the rugged terrain and
topography along the river cruise, safety of the vessels and the passengers is a matter of great concern.
The demand for cruise tourism in Karnataka is nascent and undeveloped. Hence, the market for cruise
tourism in rivers is determined by the segment in which the river cruises are proposed. The river cruises
are proposed in the lines of Jungle Lodges and Resorts. It would target international tourists and urban
middle and higher income domestic tourists who have a flair for eco-resorts, wildlife, heritage or leisure
activities.
The total number of international tourist arrivals in the State is approx 5.97 lakhs per annum and the
total number of domestic tourist arrivals in the State is approx 4.3 Crores per annum. On the basis of the
profile of tourist visits and the reason for their visits, the market demand for cruise tourism in Karnataka
is estimated at 55,000 per year. This is the indicative number of people who would be interested in the
cruise and also have the potential to undertake the activity.
The table given below sets out the demand estimation for river cruise tourism in the State.
28

Table 5: Potential Market demand for river cruises in Karnataka
Particulars
International Tourists visits in Karnataka in 2007
% increase in Foreign Tourist Arrivals
Estimated number of International arrivals in Karnataka in 2009
Average Cruise Tourists as % of all international arrivals
Expected International Tourists
Karnataka Domestic Tourists in year 2007
% increase in Domestic Tourists
Estimated number of Domestic Tourists in Karnataka in 2009
Higher and Middle Income Group
Travel for Leisure
Cruise Tourists as % of Leisure and Travelers
Expected Domestic Tourists
Arrivals
5,34,563
5.6%
5,97,240
1.4%
8361
3,78,25,953
6.9%
4,32,26,024
21.0%
38%
1.4%
48292
Source: Cruise Tourism Potential and Strategy Report and India Tourism Statistics, Ministry of Tourism, Government
of India, 2005-06
The numbers given in the table above comprise the potential tourists that visit Karnataka who would
also be interested in experiencing river cruises in the State.
SWOT Analysis
On discussions with the stakeholders and undertaking preliminary research on the project, a SWOT
matrix is developed for the project which is set out herein below:
Table 6: SWOT Analysis
Strengths
Karnataka accounts for 3.6% Domestic
tourist visits & 3.7% of foreign tourist visits
of national total for cruise tourism
Karnataka has well developed infrastructure
Major rivers in southern India like the

Cauvery and the Krishna flow in Karnataka
Stable weather during the post monsoon

season
Weaknesses
Involves considerable set up cost.
Competition from the other tourism activities

in Karnataka.
Non co-operation from locals due to cultural

threats posed by Cruise Tourism.
Limited access to international tourists due

to under developed air networks.
Poor promotional activities could lead to loss

in business opportunities.
29

Increasing inflow of people into the state on

account of work & education
Large perrineal rivers found in the State
suitable with potential for cruising
Opportunities
Non availability of basic amenities and

necessary infrastructure at the base stations
Threats
Since it a government initiative, necessary

regulatory framework and policies can be
suitably amended.
Inadequate waste disposal measures

resulting in protests from environmental
activists.
Demographics of the local market is under

going a change & people are more open to
the idea of weekly and monthly vacations
Low return on investment from the Cruise

Business.
Competition from Mumbai, Goa and Kerala

cruise networks could pose a threat.
Competition from macro players in other

tourism segments, national as well as
international
Through appropriate promotional activities,

tourists who frequent Mumbai, Goa and
Kerala can be lured to Karnataka.
It will result in overall economic
development of the region
30

5. Statutory and Legal Framework

Inland Water Transport (IWT) is an economic, fuel-efficient and environment friendly mode of transport.
India has an extensive network of rivers, lakes and canals which, if developed for shipping and
navigation, can provide an efficient network of inland transportation. An optimal mix of road, rail and
River Cruise or IWT will provide an efficient transport infrastructure with mobility, flexibility and cost
effectiveness.
Inland Waterways Authority of India (Ministry of Shipping, Government of India) is formulating River
Cruise Policy to promote River Cruise activities on Inland Waterways in the country by providing policy
support and fiscal incentives for creation of state of art infrastructure, and fleet augmentation of inland
tourism vessels in a sustainable manner.
The following are the policy and acts applicable to River Cruise are:
1.
2.
3.
4.
5.
Draft River Cruise Policy, 2009

Inland Water Policy
Guidelines for Private Investment in Inland Water Transport Sector
Inland Vessels Act, 1917
Inland Water Authority of India Act, 1985
Draft River Cruise Policy, 2009

Inland Water Transport is operationally cheaper, high in fuel efficiency and environment friendly. It has
a vast potential to act as an alternate and supplementary mode of transportation in certain conditions.
In spite of a strong case for development of inland water transport, this sector has remained neglected.
Most of the inland waterways of the country suffer from lack of Inland Water Transport (IWT)
infrastructure namely navigational channel, terminals, and navigational aids. The difficulty in providing
navigable channel with targeted depth and width, many of the smaller waterways could not be
developed.
The development of navigational channel with adequate depth for navigation is more challenging since
it mainly depends on the availability of water in the waterway, particularly during the lean water
months.
Major bottlenecks identified include:
1. Insufficient fairway with depth less than 1.2 m in many waterways
31

2. Lack of safe landing facilities
3. Inadequate shore facilities like ticket booking centers, information bureaus, rest rooms,
restaurants etc,
4. Non availability of amenities like toilet facilities, drinking water facility etc,
5. Absence of Night navigation aids
6. Bridges/Structure with insufficient clearances
7. Non availability of sufficient Inland River Cruise vessels with State of Art facilities
Inland Water Policy

In order to provide an impetus to the development of inland water transport mode, an Inland Water
Transport Policy has been announced. It includes several fiscal concessions and guidelines for
encouraging private sector participation in development of infrastructure and ownership and operation
of inland vessels;
1. To actively promote the Inland Water Transport sector for it to take a reasonable share in the
inter-modal mix of inland transport.
2. Provision of necessary infrastructure for shipping and navigation and in augmenting the Inland
Water Transport fleet.
3. Large-scale private sector participation both for creation of infrastructure and for fleet
operations to supplement the government efforts.
4. For development of waterways for navigation with the necessary infrastructure such as
terminals, navigational aids and fleet so that the Inland Water Transport mode becomes
competitive.
5. Government to act as a provider, facilitator and regulator and, at the same time, offer various
concessions to the private sector for their effective participation by way of investment for
creation of enhanced Inland Water Transport infrastructure.
6. Interlinking waterways and ports holds good prospects in respect of several river systems in
India.
Guidelines for Private Investment in Inland Water Transport (IWT) Sector

The development of infrastructure and services in the IWT sector needs mobilization of substantial
resources to improve the efficiency and quality of services. The IWT sector has been thrown open to
private sector participation. It is expected that private sector participation in the development of
infrastructure and services in the IWT sector would result in reducing gestation period for setting up of
the new facilities and services and bring the latest technology and improved management techniques.
32

Areas of Private Participation
The areas of private sector participation identified by Government are listed below:1.
2.
3.
4.
5.
6.
7.
Ownership and operation of vessels for cargo and passengers

Fairway development and maintenance
Construction and operation of river terminals or river ports
Provision and operation of mechanized cargo-handling systems
Putting up and maintenance of navigational aids
Provision of pilotage services
Setting up and running of IWT training institutions
Inland Vessels Act 1917 (I.V. Act)

The Inland Vessels Act, 1917 has been enacted to consolidate the enactments relating to Inland Vessels.
The Act empowers the State Governments to appointment surveyors and places of survey. For the
purposes of a survey, the surveyor has been authorized to go on board and inspect the vessel and every
part thereof.
This act provides for the State Governments to frame Rules regarding the survey and registration of
Inland Water Transport vessels. Any Indian National can own and operate the vessel anywhere in the
country if registered under the I.V. Act.
Inland Water Authority of India Act 1985 (IWAI)

The Inland Waterways Authority of India Act, 1985 empowers the Government to declare waterways
with potential for development of shipping and navigation as National Waterways and develop such
waterways for efficient shipping and navigation. The development of the IWT sector, equally important
would be large-scale private sector participation both for creation of infrastructure and for fleet
operations.
Section 12 empowers the Inland Waterways Authority to enter into and perform any contract necessary
for the discharge of its functions under the Act.
Section 14 empowers the Authority to provide or permit setting up of infrastructure facilities for
National Waterways.
Section 17 provides for the Authority, with the previous approval of the Central Government to levy fees
and charges at such rates as may be laid down by regulations made in this behalf for services or benefits
33

rendered in relation to the use of the National Waterways or Inland Waterways for the purposes of
shipping, navigation infrastructural facilities including facilities relating to the berthing of vessels. The
fees and charges levied shall be collected in such manner as may be determined by regulation.
("Regulations" means regulations made by the Authority under this Act).
Section 19 (1) (c) provides for crediting to the "Inland Waterways Authority of India Fund" all sums
received by the Authority from such other sources as may be decided upon by the Central Government
or State Government.
The Central Government, with a view to promote IWT, has launched several schemes. The schemes are
listed hereunder:
1.
2.
3.
4.
5.
6.
7.
Vessel Building Subsidy of 30%

Equity participation by Govt. in BOT Projects up to 40%
Viability Gap Funding
Tax exemption similar to National Highways
Enhancement in depreciation rate for inland vessels
Joint Venture by IWAI
Customs Duty concessions
River Boards Act, 1956

This is a Central Act to provide for the establishment of River Boards for the regulation and development
of inter-State rivers and river valleys.
Section 13A empowers the river board to promote and regulate navigation. It also empowers the
Authority to prepare schemes, including multi-purpose schemes, for the purpose of regulating or
developing the inter-State river or river valley and advising the Governments interested to undertake
measures for executing the scheme prepared by the Board.
Recommendations for River Cruise Development

1.
Study should be carried out to estimate the river cruise potential and study inter-alia will
suggest the types of IWT infrastructure required to be developed on specific stretches along
with mode of implementation (i.e. public funding or PPP) and incentives to be provided by the
Central Government/ State Government to the private sector.
34

Department shall consider tourism component in land acquisition while acquiring the land for
setting up terminals. For land requirement at other specified locations for tourist activities, the
State Government shall formulate proposals and submit to Ministry of Tourism.
3. The State Government should develop river cruise related infrastructure on Inland Waterways
and embarking/disembarking facilities and other shore structure e.g. waiting halls with
tourists/passenger amenities, shops etc should be provided by the private sector for which
some fiscal incentives would be provided by State Government.
4. A Centrally Sponsored Scheme for providing financial assistance by the Central Government to
the State Government in developing river cruise specific inland water transport infrastructure
may be formulated.
5. Ownership and operation of cruise vessels will primarily vest with the private sector. Inland
Vessel Building Subsidy Scheme will be propagated to provide capital subsidy of 30% for
construction of vessels by domestic companies for river cruise purposes.
2.
6.
7.
8.
9.
10.
Safety will be given high priority, the design of every cruise vessels shall be approved by Indian
Register of Shipping (IRS). Cruise vessels shall also be equipped with life saving and fire fighting
appliances and the vessel shall also be fitted with adequate communication facilities.
State Government shall have facilities of salvage and rescue of vessel, men and material before
permitting the operation of cruise vessels. Every tourist traveling on these vessels should be
insured by the operator.
The Ports having Inland Waterways link would develop a jetty exclusively for berthing of river
cruise vessels so that tourists can visit the scenic places and variety of flora and fauna in the
vicinity connected with the port through inland waterways.
To avoid pollution of the waterways due to tourism activities, the tourism vessels will be
mandatorily asked to be equipped with pollution control requirement.
The terminals to be developed/ upgraded for tourism facilities will be allowed to avail the
financial assistance, wherein assistance up to 25% of the project cost subject to a ceiling of Rs.50
crores is provided by State Government or Department of Tourism (DoT). Necessary
infrastructure like Rail and Road Connectivity will be developed.
35

6. Environmental & Social Impacts

This section discusses the environmental and social impacts of development of river cruise and suggests
measures to mitigate such damage/ impact.
Environmental Impact
River Cruises as the name suggests would operate on rivers. A river is a natural watercourse, usually
freshwater, flowing toward an ocean, a lake, a sea, or another river. A river is part of the hydrological
cycle. Water within a river is generally collected from precipitation through surface runoff, groundwater
recharge, springs, and the release of stored water in natural ice and snowpacks. Rivers are also the chief
source of drinking water and a mode of navigation.
The flora and fauna of rivers use the aquatic habitats available, from torrential waterfalls through to
lowland mires. There are many organisms which are restricted to the fresh water in rivers such as
salmon and hilsa thus forming a fresh water aquatic life. However, in rapidly migrating streams,
ecological successions develop in accordance with the prevailing patterns of erosion and deposition.
Development of river cruise would have an impact on the ecological balance in the aquatic life in the
rivers. A few of such impacts are listed below:
1. Operations of cruises would give way to generation of wastes on board and the tendency is to
dispose the waste in water
2. Leakage of fuel in the river body
3. Affects the aquatic life in the rivers
4. Cruises operating amidst the reserve forests and sanctuaries cause disruption of wildlife
The primary threat to environment in terms of river cruises would be in terms of its operations affecting
or disturbing the flora and fauna in the region due to human intervention.
36

Social Impact
The operations of river cruises would have both positive and negative impacts on the social life in the
region in the following ways;
1. Inflow of tourists/ passengers in the region for availing of river cruises could disturb the social
life in the region
2. Introducing river cruise would provide opportunities for local employment in the region
3. River cruise would also popularize the destination and thereby lead to economic development
of the region
4. Development of infrastructure along the river course would facilitate navigation along the river
for the benefit of local population
Mitigation Measures
Though development of river cruises in the region would have adverse environmental and social
impacts, the same can be curbed by the following means;
1. Undertake Environment Impact Assessment study and act accordingly before actually
implementing the project
2. Carrying capacity for the region for development of river cruises needs to be undertaken to
ensure that there is no burden on the existing environment
3. The business plan prepared for the project shall take into account the socio-environmental
factors that affect the surroundings
37

7. Project Financials
This section discusses the financial viability of the project taking into account certain general
assumptions pertaining to costs, revenues and other contingencies. Based on the project financials,
scenarios would be drawn to showcase the diverse structures for project development.
On a macro level, three sites have been identified for river cruises in the State which are backwaters of
Kabini reservoir, backwaters of Tungabhadra and backwaters of the Linganmakki dam. The financial
model / feasibility set out in this chapter can be replicated with some modifications in each of the
destinations. The overall investment requirement in cruise tourism for the State across rivers is also set
out in the section.
General Assumptions
Based on the discussions with cruise operators and research on the existing cruise liners the following
assumptions have been made on the type of cruise to be deployed for the said project;
1. Cruise liner preferably a yatch, with a passenger capacity ranging from 50-75
2. Itinerary of the river cruise would be for maximum duration of one day and one night (24 hours)
3. On-board facilities would include the following
a. Restaurant
b. Discotheque
c. Ayurveda/ Yoga/ Meditation Wing
d. Indoor Games Parlour
4. Cruise liner could have cabin space for 24 passengers and on-board facilities for 36 passengers.
The demand assumptions for the project are given below:
Table 7: Demand assumptions
Maximum Trips Assumed Considering Seasons of Travel (5 days in a week

possible in 4 months, 4 days in a week in 2 months, 3 days in a week in 4
months and no trips in two months)
160
Maximum Trips Possible (Apart from around 3 days of travel, it requires 2

days of cleaning, considering 1 trip in 7 days)
260
The number of trips proposed in the first year and the escalation over the subsequent years is set out in
the table below;
38

Table 8: Trips assumptions
No of Trips in the First Year
35
Increase in the number of trips
5%
The occupancy over the years for the river cruise is set out in the table below;
Table 9: Occupancy over the years
Years
Occupancy
1
67%
2
75%
3
80%
4 and after
80%
The financing assumptions for the project are set out in the table below;
Table 10: Financing Assumptions
Particulars
Interest Rate (Term Loan)
IDC per Quarter
Working Capital Loan
Debt-Equity Ratio
Debt
Equity
Loan Tenure
Moratorium period
Loan repayment tenure
DSRA period
Values
17%
4%
17%
1.5
60%
40%
11 years
1 year
10 years
0.5 year
Cost Estimation
The capital cost for the project would include the cruise liner which with a passenger capacity of 75
passengers would cost Rs. 12 Crores.
The costs incurred by the private developer would include the following;
Table 11: Cost estimates
No.
1.
2.
3.
4.
Cost Heads
Cruise ship cost
Cruise ship (second hand cost)
Marketing costs
Other expenses
Cost (in Rs. Crores)

12
0.25
0.10
39

No.
Cost Heads
Total
5.
Contingency Costs (2%)
Total
Cost (in Rs. Crores)

12.35
.185
12.53
Apart from the cost of the liner, for project development there is a requirement for construction of
jetties along the river banks, deployment of life saving boats along the river course, lounge areas close
to jetties for the benefit of the passengers. Houseboats can also be developed
The overall investment requirement for river cruise tourism in the State is given in the table below;
Table 12: Overall investment requirements for river cruise tourism in the State
Investment head
Cruise liners
Jetties
Lounges
Life saving boats
Houseboats
along
coastline
Total
Numbers
Costs (in Rs. Crores)
2 liners per site (3 sites) = 6
72
Atleast 2 per site = 6
3
Atleast 2 per site = 6
0.6
Atleast 2 per Cruise = 24
45
4 (backwaters of Mangalore,
8
Udupi and Kundapura)
128
Approximately, development of river cruises would require an amount of Rs. 130 Crores in Karnataka.
This investment requirement is excluding costs associated with land, dredging and other activities which
may be required on a case to case basis in different sites. However, this study would in detail discuss the
feasibility of one standard model of river cruise for any of the sites in the State.
The year on year O&M expenses for the project, is set out in the table below;
Table 13: O&M Expenses assumptions
Particulars
Passenger Handling Charges
Charges per passenger
Fuel Charges
Entertainment Charges per trip
Crew Charges
No. of crew members
Total Expense per Crew Member
Maintenance and Insurance
% of Ship cost
Values
15% of the ticket price
7% of revenues
Rs.10,000/12
Rs.1000
1
40

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

Table 14: O&M Expenses
O&M Expense Head

Passenger Handling Charges
Fuel Charges
Entertainment Charges
Crew Charges
Maintenance and Insurance
Total
Values (Rs. Lakhs)

8.7
4.0
3.5
4.2
12.0
32.4
Revenue Streams
The revenue streams for the project include the following:
1. Tariff collected from passengers for river cruise travel
2. License fee collected from the restaurants/ discotheques/ etc.
The revenues streams projected in the first year of operations are set out in the table below;
Table 15: Revenue Streams
Particulars
Number of Passengers
Occupancy
Tariff for Cabins
Cabin capacity
Tariff for being on-board
On-board capacity
Total no of Trips
Escalation in Price
Total tariff collection (in Rs. Lakhs)
Other Revenues (in Rs. Lakhs)
Restaurant licenses
Bar Licenses
Casino Licenses
Ayurveda Spa
Total Revenues
Values
60
67%
5000
24
3500
36
35
2%
57.7
5.0
5.0
2.0
5.0
74.7
41

Viability Assessment
Modern and reliable methods of capital budgeting like Net Present Value (NPV), Internal Rate of Return
(IRR) or discounted cash flow have been used to assess the viability of the project. Weighted Average
Cost of Capital (WACC) has been assumed to be the discounting rate for the purposes of calculation of
NPV.
The project seems viable for a project period of 20 years with a project IRR of 14.7% and an equity IRR of
14.2% where the project NPV is Rs.24 lakhs.
Scenario Analysis
The sensitivities have been calculated for the project the NPV and IRR calculation for the different
project period and the same is set out in the table below:
Table 16: Sensitivity analysis
Project
period
Project
NPV
10
15
20
25
30
(211.1)
(65.5)
24.0
74.9
103.9
Equity
IRR
8.9%
13.1%
14.7%
15.5%
15.8%
NPV
(222.7)
(95.8)
(6.3)
44.6
73.6
IRR
1.4%
11.1%
14.2%
15.3%
15.8%
42

8. Operating Framework
This section would discuss in detail the possible risks in the project development, mitigation measures,
indicative project structure, qualification and selection criteria for the project to be developed on PPP
framework.
Risks and Mitigation

The possible risks and the mitigation measures for the project is set out in the table below;
Table 17: Risk Matrix
Sl. No.
1.
2.
3.
Risk
Indicative Mitigants
Completion Risk
Delays in procuring or construction
Fixed price - Fixed time EPC Contract
of ship
Technical & Engineering Studies
Delays in supporting infrastructure
Equity stake from contractor
Delays in approvals
Sponsor support
Design and engineering risk
Construction technology
Availability of eco-friendly materials
Contractors delays
Operating Risk
Maintenance
Known and proven technology to be
Demand Management/ Quantity
preferred
Management
Quality assurances through
Shortfall in Output/efficiency
warranties
Safety Management
Annual Maintenance Contracts from
Quality of Management
equipment suppliers
Lenders Engineer Report
Professional and experienced
management
Sponsor strength and track record
O&M Contracts
Sensitivity analysis
Revenue Risk
Demand forecasts
Market studies
Historical data
Cost-benefit analysis
User charges/ willingness-to-pay
Contractual protection
Sensitivity analysis
43

Sl. No.
5.
6.
7.
Risk
Force Majeure Risk
Non-political events
Acts of God
Strikes or boycotts affecting
supplies and services
Indirect Political events
Strikes: Industry wide,
state/country wide public agitation
Environmental & Social Risk
Initial Environmental Consent
Access issues
Public Consultation, Compensation
Environmental & Social Compliance
Environment Management Plan
Political Risk
Granting of approvals
Change in law
HR issues, past history
Indicative Mitigants
Contractual provisions
Delays being condoned
Termination payments
Insurance
Public Consultation, Compensation

Environment Management Plan
Contractual mitigation
EIA Studies
Hydrographic studies
Contractual provisions
Political Risk Insurance, if applicable
Indicative Project Structure

The various options under which the development of cruise tourism can be undertaken under a PPP
framework are listed below:
Each model varies depending upon the extent of sharing of risk and returns along with ownership rights
as defined in the concession agreement entered into between the Government and the private
developer.
Generally in most of these structures, financing and construction is the sole responsibility of the private
developer. Equally all these structures pre-supposes the charging of user fee by the developer as return
for his investment.
1. Build Own Operate (BOO): In the BOO concession structure, privatisation is total with the onus
for investment & operation along with asset rights being handed over to the private operator.
Government would have no financial or commercial obligations. Essentially the transfer back of
the land to the government does not take place, and the project company continues to operate
the facility as though owned by it. The underlying land is either sold or leased to the project
company (with a continuous roll-over option for extension of lease).
44

2. Build Own Operate and Transfer (BOOT): The BOOT structure varies from BOO only to the
extent that the concession would be for a specified period at the end of which the land and the
assets thereon would transferred back to the Government at the end of the concession period
as per the terms of the concession contract. As such Governments interest in the land would be
protected. The onus for investment & operation would be with the private operator with
Government having no financial or commercial obligations. However, ownership rights during
the concession would rest with the operator and he would be in a position to securitize these
for raising finances with the attendant risk that in case of default the financiers would have
the right take over the facility including the land.
3. Build and Transfer: In the BT structure the construction of the facility would be financed and
carried out by the private sector after which the entire facility would be handed over to the
Government. Hence, it would be very limited privatization, and the entire ownership with
responsibility for operations, management and marketing would rest with the Government. This
would imply that the consequent commercial and marketing risk would lie with the
Government.
4. Build Operate and Transfer (BOT): The BOT is the typical and most widely used concession
contract and offers the flexibility to be structured either on the basis of a lease or a license. The
facility is financed, designed and built by the private operator in return for which he is given the
concession to operate the project, either on the basis of a lease of land or a license to operate,
for a specified number of years. The private developer operates the project for a specified
period bearing all the commercial and marketing risks and at the end of concession he is
required to hand over the facility to the government as per the terms of the contract.
Ownership remains with the Government during and after the concession period.
5. Build Lease and Transfer (BLT): In the BLT structure the construction of the facility would be
financed and carried out by the private sector after which the entire facility would be given on
lease to the Government for the purpose of operations. This structure is used in sectors where
the operations of a certain service have not been fully privatized, such as in the Railways.
6. Joint Venture (JV): In a JV structure, the project would be implemented by a Joint Venture
Company, (JVC), in which both the private developer and the Government would have
shareholding. The Government would invest in the project and, as shareholder, would be part
owner and consequently bear all the related commercial and marketing risk arising out of the
project. The financial returns to the Government would accrue in the form of dividends and
exit option would be available only through the divesting of Government shareholding in the
JVC.
45

While creating a robust PSP framework, Government should ensure that the privatization structure is
bankable (i.e. acceptable to financiers and bankers) wherein the concerns and risks of all the parties
The Government, the private sector & the lenders are suitably addressed. The private partner should
be able to deliver the expected requirements of the concession agreement. One alternative is that the
Government adequately addresses the concerns of the prospective bidders through an acceptable bid
Structure which addresses the following aspects:
Table 18: Project Structures
Concession structure
Revenue sharing model
Bidder paying the highest

concession payment is
the preferred Bidder
Government to specify sharing of revenue based on a certain minimum

number of passenger/ ship movements. In this scenario the bidder will
define a base amount payable to the Authority for a specified number of
tourist movements through the terminal. If there is an increase in the
number of tourist movements, the Authority receives a higher share of the
revenue and if there is a lower movement the port receives a specified
floor payment or alternatively shares in the loss.
Indicative Qualification and Selection Criteria

The possible private players who could be interested in the development of cruise tourism in Karnataka
are:
Cruise Lines/Cruise Operators: The most potential private sector player who would be interested
in developing and operating cruise terminals would be the cruise lines themselves. Some of
these players are Star Cruises, Royal Carribbean International (RCI), Princess Group and Louis
Group.
Port Operators: Operators of private sector ports in India could also be keen to explore the
synergy of having a cruise terminal.
Hoteliers/hospitality players: Big groups engaged in hotels/ hospitality business, like the Taj
Group, the Oberoi Group, Leela Palaces and Resorts etc. would explore the synergies of building
cruise terminals in Karnataka in which there presence is the strongest.
Large entrepreneurs in Tourism/other businesses: Large entrepreneurs also interested in the
tourism business would also like to consider investment in a cruise terminal especially close to
their tourism projects.
Private Airlines: There are a large number of private airlines in India operating in many regions.
Each of these may be interested in exploring the potential of cruise tourism and using their
46

position in the cruise ports as terminal operators to create backward integration & captive
passenger base for their suitably positioned airlines operations.
Other private stakeholders: Smaller stakeholders like tour operators, travels agents, shipping
services agent etc would also be interested in participating in cruise terminal development,
however, they may not have the finance to take it up independently. Accordingly, their
participation must be explored in a consortium model where they tie up with the larger player in
the investment while gaining special privileges in the development.
The selection criteria in terms of the financial bid could be the highest percentage share of revenue to
the Government, highest annual payment or an upfront payment.
47

9. Way Ahead
This section discusses the obligations of the government with respect to this project and the
development framework.
Government Obligations for Development

On finalization of the site, the government is required to undertake the technical feasibility studies in
the region to determine the possibility of the river cruise in the area, also to finalise the capacity and
tonnage of the cruise vessel that can be deployed in the region.
Government is also required to obtain the necessary approvals from the PWD IWT Department with
regard to operation of the river cruises in the inland waterways. Approvals are to be sought from the
Forest Department as some of the regions where the river cruises are proposed lie in the reserve/
protected forests.
Government would be solely responsible for development of infrastructure at the river banks for the
development of river cruise tourism, provide end mile connectivity to the base stations and ensure the
safety of the passengers who avail river cruise facility.
Project Development Framework

The project would be developed on a PPP framework such that it results in a win-win situation to both
the private developer as well as the Government. The obligations of both the parties during the project
development are set out in the figure below;
48

Cruise Deployment and O&M
Private
Operator
(PO)
Jetty facilities Development and O&M

On-board/ Off board services
Private
Operator
(PO)
Government
of
Karnataka
Other basic infrastructure

Commercial Risk
Marketing and Promotion
Government
of
Karnataka
Private
Private
Operator
Operator
(PO)
(PO)
GoK and
Private
Operator
As shown in the figure above, it is clear that there is a perfect demarcation in the activities to be
undertaken by both the private developer and the Government. Hence, the project can ideally be
developed under a PPP framework.
49

10.
Conclusion
The pre-feasibility report was presented to a panel chaired by the Principal Secretary, Infrastructure
Development Department (IDD), Government of Karnataka on October 29, 2010 for discussion and
approval. The presentation was attended by the probable stakeholders to the project, representatives
from Department of Tourism, Government of Karnataka; Public Works Department and Department of
Youth Services and Sports.
The members opined the following after the presentation of the pre-feasibility report;
1. There is a demand for river cruising in the State. However, due to the absence of options except
of houseboats in Udupi and smaller ferry services in the coastline; the demand is not fulfilled.
2. Clearance from environment and forests would be a key factor for development of river cruises
in certain areas and the same would need to be factored while developing the project.
3. The scope of this assignment did not include assessing the viability of the river course to
implement the project. As the process of undertaking technical studies (hydrographic) to assess
the viability of the river cruise is an elaborate and expensive affair and hence, no government
agency is inclined towards commissioning such a study.
The Chairman opined that the development of river cruise in the State could be undertaken under a PPP
framework but on a Swiss Challenge mode. iDeCK was requested to prepare a write up on the probable
locations for river cruises in the State, so that the same could be uploaded on the website of IDD, along
with an invitation to the private operators to propose river cruising activities under Swiss Challenge. The
write up on the promising sites for operating river cruises is set out as Annexure 2 of this report.
50

Annexure 1
1. Cauvery
Cauvery, also called Dakshina Ganga (the Ganges of the south), is one of
the sacred rivers of India. The river is considered to rise at Talacauvery in
the Brahmagiri hills in Kodagu. Cauvery is considered as one of the seven
sacred rivers (Sapta Sindhu) of India and is one of the most important
rivers in south India. The source occurs at a point where the Western
Ghats join the Bengunad range. The Kannike, another stream which rises
nearby joins Cauvery at the foot of the hill in a village named
Bhagamandala. A third river, the Sujyothi, is also said to join Cauvery here,
unseen. Cauvery forms the principal drainage of Kodagu, and is already a
major river when it leaves the Western Ghats near Kushalanagara.
After the river leaves the Kodagu hills and flows onto the
Deccan plateau, it forms two islands, Srirangapatna and
Shivanasamudra. At Sivasamudra island the river drops 320 ft
(98 m), forming the famous Shivanasamudra Falls known
separately as Gagana Chukki and Bhara Chukki. Asia's first
hydroelectric plant, built in 1902 was on this falls wherein it
supplied power to the city of Bangalore.
In its course through Karnataka, the channel is interrupted by
twelve dams (anicuts) for the purpose of irrigation. Near Srirangapatna, there is an aqueduct, the
Bangara Doddi Nala, which was constructed in the 17th century by the Wodeyar maharaja of Mysore,
Ranadhira Kantirava, in memory of his favorite consort. It is said to be the only aqueduct where the
water from a river, dammed upstream, is carried by the aqueduct over the very same river few miles
downstream. This aqueduct also served as a motorable bridge until 1964. In addition to providing many
ancient and modern canals with water from the river for irrigation purposes, Cauvery also serves as the
main drinking water source for many towns and villages. The cities of Bangalore, Mandya and Mysore
depend almost entirely on Cauvery for their drinking water supply. In fact, the river is called Jeevanadhi
which, in Kannada, means a river supporting life.
The map shown below shows the different tributaries of Cauvery. All the tributaries along the river
course of Cauvery significantly contribute towards the livelihood of local people. Kabini is one of the
many tributaries of river Cauvery; it originates in the Wayanad district of Kerala and flows eastward to
join the Cauvery at T Narasipur in Karnataka. The total length of the river is about 230 km most of which
is amidst reserve forests and wilderness. Cauvery is joined by several rivers, the most important ones
51

being Kakkabe, Kadanur, Kummahole, Hemavathi, Lakshmanatirtha, Shimsha etc, until it flows into the
Bay of Bengal in Thanjavur district in Tamil Nadu.
52

53

2. Krishna
River Krishna is one of the longest rivers in central-southern India
(about 1400 km in length). It is also referred to as Krishnaveni in its
original nomenclature. It rises at Mahabaleswar in Maharashtra in the
west and meets the Bay of Bengal at Hamasaladeevi in Andhra
Pradesh, on the east coast. In its course it flows through Karnataka.
The delta of River Krishna is one of the most fertile regions in the
country and was known to be the home to ancient Satavahana and
Ikshvaku dynasties. Sangli is the largest city on the river Krishna in
Maharashtra state while Vijayawada is the largest city on the River
Krishna.
Ecologically, this is one of the disastrous rivers in the world, for the
reason that it causes heavy soil erosion during the monsoon season.
The river flows fast and furious, often reaching depths of over 75 feet (23 m). Krishna causes a high
degree of erosion between June and August. During this time, Krishna takes fertile soil from
Maharashtra, Karnataka and western Andhra Pradesh towards the delta region.
Its most important tributary is the Tungabhadra River, which is formed by the River Tunga and River
Bhadra that originate in the Western Ghats. Other tributaries include the River Koyna, River Bhima (
River Kundali feeding into the Upper River Bhima Basin), River Malaprabha, River Ghataprabha, River
Yerla, Rvier Warna, River Dindi, River Musi and River Dudhganga.
The rivers Koyna, Vasna, Panchganga, Dudhganga, Ghataprabha, Malaprabha and Tungabhadra join
Krishna from the right bank; while the rivers like Yerla, Musi, Maneru and Bhima join the Krishna from
the left bank.
Krishna Basin extends over an area of 2,58,948 km
which is nearly 8% of total geographical area of the
country. The basin lies in the states of Andhra Pradesh
(1,13,271 km),
Karnataka
(76,252 km)
and
Maharashtra (69,425 km). River Krishna rises in the
Western Ghats at an elevation of about 1,337 m just
north of Mahabaleshwar, about 64 km from the Arabian
Sea and flows for about 1,400 km and outfalls into the
Bay of Bengal.
The map of River Krishna set out below shows the river course of the river along from its origin to the
Bay of Bengal.
54

55

3. Tunga Bhadra
River Tungabhadra is a sacred river in southern India
that flows through Karnataka to Andhra Pradesh, where
it serves as the chief tributary of the Krishna River. In
the epic Ramayana, the Tungabhadra was known by the
name of Pampa.
The River Tungabhadra is formed by the confluence of
two rivers, the River Tunga and the River Bhadra, which
flow down the eastern slope of the Western Ghats in
Karnataka. Along with Nethravathi (west flowing river,
joining the Arabian Sea near Mangalore), the Tunga and
the Bhadra rise at Gangamoola, in Varaha Parvatha in
the Western Ghats forming parts of the world famous
Kudremukh Iron Ores, at an elevation of 1198m. More
than a hundred tributaries, streams, creeks, rivulets and
the like contribute to each of these two rivers. The
journey of Tunga and the Bhadra is 147 km and 171 km
respectively, till they join at Kudali, at an elevation of
about 610 m near Holehonnur, about 15 km from
Shimoga. It is a confluence of both the Dwaitha and the
Adwaitha philosophies. From there, Thungabhadra
meanders through the plains to a distance of 531 km and mingles with the Krishna at Gondimalla, near
Alampur in Mahaboobnagar district of Andhra Pradesh. River Varada flowing through Shimoga, Uttara
Kannada and Haveri districts; River Hagari in Chitradurga and Bellary districts and River Handri in
Kurnool district of Andhra Pradesh are the main tributaries of the Tungabhadra.
There are many holy places all along the rivers; primarily temples of Saiva cult on the banks of the
Bhadra and all the cults on the banks of the Tunga. Sringeri, Sarada Petham established by the Adi
Shankarcaharya is the most famous one on the left bank of the Tunga, about 50 km downstream of its
origin. Manthralayam Sree Raghavendra Swamy Muth in Kurnool district and Alampur in
Mahaboobnagar district, known as Dakshina Kashi are the other important pilgrimage centres.
About 15km downstream from Shimoga at Gajanur across the River Tunga a dam is constructed. At
Lakkavalli about 15 km upstream of Bhadravati across the Bhadra a dam is constructed. Both are
multipurpose dams and irrigate lands in Shimoga, Chikkamagalur, Davanagere and Haveri. The
Tungabhadra dam is constructed across river Tungabhadra, a tributary of River Krishna. The dam is built
near the town of Hospete in Karnataka. It is considered as a multipurpose dam with storage capacity of
135 tmcft. Owing to siltation the capacity has been reduced by about 30 tmcft.
56

4. Sharavathi
Sharavathi originates at Ambuthirtha in Thirthahalli taluk, flows
north-west through the Western Ghats forming the Jog Falls before
joining the Arabian Sea at Honnavara. River Sharavathi originates
and flows entirely within the Karnataka and is one of the few
westward flowing rivers of India. A major part of the river basin lies
in the Western Ghats. The famous Jog Falls, Indias highest
waterfalls are formed by this river. The Sharavathi River plunges
253 metres into a deep gorge at Jog in four different segments
called as Raja, Roarer, Rocket and Rani. The volume of water that
reaches Jog Falls is controlled upstream by the Linganamakki dam and the falls are at their mightiest
when water is released from the dam. The total length of the river is 128km and the major tributaries of
the river are Nandihole, Haridravathi, Mavinahole, Hilkunji, Yennehole, Hurlihole, and Nagodihole.
The river itself and the region around it are rich in biodiversity and are home to many rare species of
flora and fauna. With a major part of the river lying in the Western Ghats, the Sharavathi basin receives
a large amount of rainfall. Mean annual rainfall ranges from 6000 mm in the western side to 1700 mm in
the eastern side of the basin. About 95% of the rainfall is
received during the month of June to September (July being the
rainiest) when the southwest monsoon is at its peak. There is
some rainfall in the post monsoon season in the form of
thundershowers mostly during October and some rainfall also
occurs during the summer months of April and May.
The Linganamakki dam located in the Sagara taluk (length of
2.4 km) and was constructed across the Sharavathi river in the year 1964. It was designed to impound
4368 million cubic meter of water in an area of around 300 km, submerging 50.62 km of wetland and
7 km of dry land, the remaining being forest land and wasteland. The dam's height is 1819 feet above
sea level. The total capacity of the reservoir is 152 TMC (Thousand Million Cubicfeet). It has a catchment
area of nearly 1991.71 km. It receives water mainly from rainfall and also from the Chakra and
Savahaklu reservoirs, which are linked to Linganamakki through a canal. The water from Linganamakki
dam flows to Talakalale Balancing Reservoir through a trapezoidal canal with a discharge capacity of
175.56 cumecs. The length of this channel is about 4318.40 m with a submersion of 7.77 km. It has a
catchment area of about 46.60 km. The gross capacity of the reservoir is 129.60 cu meters.
Another dam which is built across River Sharavathi is the Gerusoppa dam in Uttar Kannada. It has a
height of 56 metres and a length of 545 metres. The dam was built in the year 2002 for the purpose of
generating electricity.
The Sharavathi river basin is rich in biodiversity. In a survey conducted in the basin, 23 amphibians
belonging to the families of Bufonidae, Ichthyophiidae, Microhylidae, Ranidae and Rhacophoridae were
57

recorded. Out of these 23 amphibians, 15 species are endemic to the Western Ghats. The river lends its
name to the following species of fish that have been discovered in its waters:
Batasio sharavatiensis: A bagrid catfish discovered near Jog Falls, Uttara Kannada district. [6]
Schistura sharavathiensis: A fish species discovered in Sharavathi river near Algod, Shimoga
district
A part of the Sharavathi river basin was declared as a wildlife sanctuary on 20 April 1972. Spread over an
area of 431.23 km, it has dense evergreen and semi-evergreen forests. Linganamakki reservoir spread
over an area of 128.7 km is a part of this sanctuary. The remaining area has been divided into core zone
(74.33 km), buffer zone (170.67 km) and tourism zone (57.53 km). The altitude in the sanctuary varies
from 94m to 1102m, the highest point being Devarakonda on the southern edge of the sanctuary.
Temperature in the area ranges from 15C to 38C and the mean annual rainfall is 4500 mm.
There are many places of interest along the river course, a brief on a couple of them are given herein
below:
Ramachandrapura Math is a Hindu religious institution located on the banks of the river
Sharavathi in the town of Hosanagara in Shimoga district. One of the goals of this institution is
the protection of Indian breed cattle (Bos indicus). A World Cattle Conference was organised by
this institution in the year 2007 to promote propagation and improvement of Indian breeds of
cattle.
Honnemaradu is an island on the reservoir formed by the Linganamakki dam. It is located in the
Sagara taluk of Shimoga district. This place is good for watersports and hence it attracts
enthusiasts. Some of the water sports possible here are canoeing, kayaking and wind surfing.
Bird-watching enthusiasts also visit this place.
5. Kabini
Kabini is also called Kabani and Kapila, is a river of
southern India which originates in Wayanad, Kerala
from the confluence of the Panamaram River and
Mananthavady River, and flows eastward to join
the Cauvery at Tirumakudal Narasipur in Karnataka,
which empties into the Bay of Bengal.
Close to the town of H D Kote in Mysore, it forms
the huge Kabini Reservoir. The backwaters of the
Kabini reservoir are very rich in wildlife especially in
summer when the water level recedes to form rich
grassy meadows. The Kabini dam is 2,284 feet (696 m) in height with a gross storage of 19.52 tmcft but
58

has reduced considerably due to silt accumulation. Kabini Dam is situated between villages
Beechanahalli and Bidarahalli having distance of 14 km from H.D.Kote.
Kabini is one of the most popular wildlife destinations of Karnataka, probably because of its easy
accessibility, lush green landscape surrounding a large picturesque lake, and fantastic sightings of large
herds of elephants. It is 80 km away from Mysore and 205 km from Bangalore, and comprises the southeastern part of Nagarole National Park. Situated on the banks of River Kabini, this forest reserve is
spread over 55 acres of forestland, steep valleys, and water bodies. The region was once the private
hunting lodge of the Maharaja of Mysore and a popular poaching hotspot for British Viceroys and Indian
royalty. Now it is considered to be one of the best wildlife sanctuaries in Karnataka, famous for its exotic
and endemic wildlife.
This wildlife sanctuary, situated on the banks of River Kabini, features a large quaint lake surrounded by
verdant landscape. This forest reserve is spread over 55 acres of forestland and water bodies. Tourist
can spot herd of elephants roaming in the area. Kabini is an ideal place for tourists to pitch their camps
and plan out a trek to Kumara Parvatha or Tadiyadamol nearby. Kabini back waters are an ideal camping
site for nature loving tourists.
The river course of Kabini is exciting and beautiful. Kabini originates from Pakramthalam hills at
Kuttyadi-Mananthavady road. River Makkiyad and River Periya join it near Korome and Valad
respectively. After flowing through Mananthavady town, River Panamaram joins Kabini near
Payyampally. One branch of Panamaram starts from Banasura Sagar reservoir near Padinjarethara and
its other branch starts from the Lakkidi hills. After traversing 2 km from the confluence of River
Panamaram, Kabini forms an island called Kuruva Island, spreading over 520 acres (2.1 km2) with diverse
flora and fauna. Within 20 km, it reaches the Kabini reservoir bordering Kerala and Karnataka. Between
Kabini reservoir and Kuruva island, River Kalindi joins Kabini. River Kalindi originates from Brahmagiri
hills which on reaching near Tirunelly temple the rivulet Papanasini joins it. Taraka and Nugu are the two
small rivers in H.D.Kote taluk that join Kabini.
6. Sita
River Sita rises in the western ghats at a place called the Kudlu teertha and flows through the thick
greens of the western ghats forming rapids in its course. The river finally empties into the Arabian Sea.
River Sita is known for its rapid flow which paves way for the adventure sports activities such as rafting
and kayaking in the river.
Other Rivers
Ghataprabha River- rises in the Western Ghats and flows eastwards for a length of 283 km
before joining river Krishna. The river debouches by 53 metres at Gokak falls in Belgaum district.
59

Malaprabha River- also rises in Western Ghats at an altitude of 792 metres in Belgaum district.
The river flows first in easterly and then in north-easterly directions and joins the Krishna at
Kudalasangama, about 304 km from its source.
Bhima River- originates in the forest of Bhimashankar in Pune, and flows through the States of
Maharashtra and Karnataka. It flows for 861 km before joining the Krishna near Kudlu in Raichur
taluk.
Hemavathi River- rises in the Western Ghats at an elevation of about 1,219 metres and joins the
river Cauvery near Krishna Raja Sagar dam.
The map of Karnataka with all its major rivers and four water bodies are set out below:
ALMATTI RESERVOIR
TUNGA BHADRA DAM
LINGANAMAKKI DAM
KRISHNA RAJA SAGAR DAM
60

The backwaters of the major dams such as Linganamakki across river Sharavathi, Krishna Raja Sagar
across river Cauvery, Tunga Bhadra across river Tunga Bhadra river and Almatti across river Krishna
would be targeted for river cruise tourism.
61

Annexure 2
PROMISING DESTINATIONS TO DEVELOP RIVER CRIUSES IN KARNATAKA
Backwaters of River Sharavathi at Honnemaradu
The backwaters of River Sharavathi is located at
Honnemaradu. River Sharavathi is famous for the water fall
at Jog, which is the highest waterfall in the Indian subcontinent. It is a promising destination for river cruising for
the following reasons;
The annual tourist flow to Jog falls is 4.5 lakhs of
which 99% are day tourists. The river cruise
proposed in the region would enhance the duration
of tourist stays in the region. The idea is to propose
cruise for a duration of one day and one night
duration in the backwaters of the Sharavathi at Honnemaradu.
Honnemaradu is surrounded by reserve forests that are a habitat to the some of the
endangered and endemic species of the western ghats. The major attraction of the cruise would
be witnessing the flora and fauna of the region.
The facilities on board the vessel could include cabins, canopy area, Ayurved spa, restaurant
serving the local Malnad cuisine.
Kabini Reservoir
River Kabini the tributary of the river Cauvery which flows

through the reserve forests of the wildlife sanctuary in the south
eastern parts of the Nagarhole Wilddlife Sanctuary would be a
very promising site for river cruising to experience the exotic
wildlife of the region. The Jungle Lodges and Resorts, a GoK
owned enterprise is located on the banks of river Kabini and
could also provide the required thrust for development of the
river cruise. Other factors that would make river cruises in the
said destination attractive are as follows;
Annual tourist visits to Kabini River Lodge of Jungle

Lodges and Resorts is about 1500. The resort enjoys nearly 100% occupancy. This also promises
62

adequate demand for any river cruise in the area wherein the river cruise could cater to the
excess demand for the wildlife tourism in the region.
The major attraction of the cruise would include watching the flora and fauna in the region
belonging to the wildlife sanctuary.
The cruise would have facilities like the Ayurved spa and massage centre, restaurant serving
local cuisine and a canopy overlooking the banks.
House Boats in Backwater in Udupi/ Mangalore
Department of Tourism through its Jungle Lodges and

Resorts has already identified prospects for houseboats
in the backwaters of the Kemmana-Hoode located in
Udupi district. Karnataka has a coastline of about 320 km
and has many estuaries, backwaters and lagoons that are
formed along the same. Many small rivers like River
Gangoli and River Sita that join the sea have their
backwaters in the districts of Udupi. The locations
around Gangolli and Kodi in Kundapura taluk are
promising destinations to undertake river cruises. The following components make river cruising
promising in the region;
Annual tourist visits to the districts of Udupi and Dakshina Kannada is about 8-9 lakhs.
Houseboats popular in the neighbouring State of Kerala would also draw tourists in Karnataka.
Also, the houseboats already under operation in the backwaters of Udupi are operating with
100% occupancy.
Each Houseboat, could house about 4 cabins for over-night stays and it could take the tourists
through the rich paddy fields and coconut plantations along the river. The houseboats could
also visit the various inhabited islands formed by these rivers thus offering the tourist a
snapshot of the village lifestyle.
Local cuisine may be served on these houseboats thus promoting the local culture.
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River Cruise Karnataka

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River Cruise Karnataka

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Development of Cruise Tourism in Karnataka

GOVERNMENT OF KARNATAKA INITIATIVE

TOURISM PROJECTS FOR INVESTMENT

INVEST KARNATAKA 2016

Development of Cruise Tourism in Karnataka

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

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

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

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

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

Development of Cruise Tourism in Karnataka

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

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

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

Development of Cruise Tourism in Karnataka

Home away from Home feel

Development of Cruise Tourism in Karnataka

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

Multiple Destination visits

Development of Cruise Tourism in Karnataka

Approach and Methodology

Development of Cruise Tourism in Karnataka

Development of Cruise Tourism in Karnataka

Development of Cruise Tourism in Karnataka

Table 1: Tourist arrivals for Cruising in India

Amazon River Cruises

Development of Cruise Tourism in Karnataka

Manatee Amazon Explorer Riverboat in Ecuador

Development of Cruise Tourism in Karnataka

Nile River Cruise

Development of Cruise Tourism in Karnataka

Thames River Cruise

Development of Cruise Tourism in Karnataka

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

Indian Case Studies

Brahmaputra River Cruise

Development of Cruise Tourism in Karnataka

Ganga River Cruise

Houseboats in backwaters of Kerala

Development of Cruise Tourism in Karnataka

breathtakingly beautiful backwaters where the tourists enjoy amazing

(in Rs.) / Night

River Cruises in Goa

Development of Cruise Tourism in Karnataka

Development of Cruise Tourism in Karnataka

Coorg, Mysore, Srirangapatnam, Wildlife,

Nature, Conducive in few of its

Not very conducive

Shimoga, Jog, SAgar

Mysore, Nagarhole, Coorg

Wildlife, Nature, Leisure

Wildlife, Nature, Leisure

Not very conducive

Shimoga, Hampi, Koppal, Haveri

Development of Cruise Tourism in Karnataka

Need for the Project

Availability of more that 3000 kms of rivers in the State

Development of Cruise Tourism in Karnataka

Availability of related infrastructure for river cruises,

Development of Cruise Tourism in Karnataka

Description of the Project

Development of Cruise Tourism in Karnataka

Components of the Project

Brahmaputra River Cruise