Development of Smart Industrial Port City at

Port, Port Services and Logistics Government of Contents

Project Concept 3 Market Potential 4 Growth Drivers 7 Gujarat – Competitive Advantage 8 Project Information 11 - Location/ Size - Infrastructure Availability/ Connectivity - Smart Components for SIPC - Key Considerations / Key Players/Potential Collaboration Opportunities Project Financials 15 Approvals & Incentives 16

Page 2 Project Concept

What is Smart Industrial Port City?

►Smart City Reference Framework is driven by the following Similar projects in principles : ► Well-being ► Equity ► Smart ► Efficiency Industrial Port City ► Foresight Project, Gujarat ► Smart cities also have an element of ICT as a remedy to economic ►Cochin Smart and environmental problems Industrial Port City ► SIPCs would consists of Port-led industry and townships along with Project, Kerala green initiatives like wind and solar energy parks around the ports.

Mundra Port: Brief Overview

► Mundra Port is the largest private port of India located on the north shores of the near Mundra, Mundra , Gujarat ► It is a deep draft, all-weather port with a high degree of mechanisation. ► It is the only port in the country with handling and storage facilities for crude oil, containers, dry bulk, break bulk, automobiles and liquid cargo. ► Mundra can berth the largest post panamax vessel and can handle four million TEUs or Twenty feet Equivalent Unit. Smart Industrial Port Cities at Gujarat

► Smart Industrial Port City as a concept is being driven by the Government of India through the Ministry of Shipping which endeavors to create a smart city around every major port city such as Kandla, and Paradip ► The SIPCs would seamlessly integrate the Smart City concept with port cities to bring in more industrialization in these areas and support the labour and employment as a result ► The smart city would be self sustainable with clean and green environs, disciplined development, responsive to people’s needs, planting of substantial green cover (indigenous trees mainly) to mitigate rising CO2 levels and the urban heat island effect ► The mitigation of Carbon footprint will also involve installing Smart Street Lighting, Incentivising the use of renewable energy sources like solar and wind energy, tidal power ► Recycling of goods and waste will also be incentivised ► These cities comprise of wide roads, green energy, advanced townships and greenery. ► In addition, these smart cities and ports have e-governance links, international standard facilities, special economic zones, ship breaking and ship building centers besides allied things. ► These smart cities would also house schools, commercial complexes and other amenities. Source: Reconceptualising Smart Cities: A Reference Framework for India

Page 3 Market Potential

Overview of Port Sector

► India has 12 major ports and 200 notified non major ports. ► In 2014-15, out of 200 non major ports, 69 ► India is the seventeen in terms of world tonnage in the world ports handling cargo traffic. ► From April 2015 to December 2015, India’s ► India has the coastline which accounts than major and non major ports handled around 7,517 km long 786 million tonnes (MT) of total cargo ► Most of the cargo ships which navigates to ► Major ports of India handled a traffic of East Asia and America, Europe and Africa 447.05 million tonnes (MT) from April 2015 to passes through Indian territorial waters December 2015 ► Major ports of India have improved their efficiency of operation particularly in terms of turnaround (TRT). The average turn around Gujarat Port Sector time (Port A/c) improved from 2.4 days in 2000-01 to 2.13 days in 2014-15. ► Gujarat has an advantage of longest ► India has invested around US$ 2.6 Bn in port coastline account approximately 1600 km in and shipping sector between 2011-2014 India ► Gujarat accounted around three fourth of the total traffic handle by non major ports followed by Andhra Pradesh and Maharashtra ►Gujarat has the highest number of operational ports & commercial cargo ports ► First State to take up Port Privatization in the Country ► First State in India to have a dedicated Chemical Terminal ► State has also World’s largest ship Kandla Kolkata recycling yards at Alang Haldia Mumbai Paradip JNPT Vishakhapatnam Marmagoa Ennore New Mangalore Chennai

Cochin Tuticorin

Source: Ministry of Shipping, GoI , Annual Report 2015-16

Page 4 Market Potential

Industry Profile in the Region

► Between 2006 and 2014 – the cumulative MSME units was 1636 while the cumulative investment during the same period stood at INR 143889.28 lakhs ► Employment generated in the district in the MSME sector including manufacturing and service totaled (~50 kms) 26,988 (2006-2014) Morbi (~180 kms) ► Manufacturing units set-up in Kutch during the period Mundra Surendranagar 2006 to 2014 stood at 1288 amounting to a total (~260 kms) investment of INR 121466.32 lakhs. While employment generated during the period was 22,312 Rajkot ► Service sector in Kutch during 2006-14 stool at 348 (~240 kms) with an investment of INR 24422.96 and employment generated was 4,676 ► As of June 2016 INR 377 crore investment in large projects were commissioned in Kachchh district and an investment of INR 674 crores in large projects were under implementation

► Kachchh is rich in non-metallic minerals

► Focus industry sectors include – minerals, port based industries, marine chemicals, engineering, infrastructure projects, chemicals, ceramics, and textiles

► Kandla and Mundra are the two ports present in the district to support the industrial and commercial activities in the state and accounts for very high cargo movement

► Accounting for over 60% of the toital salt production in the state – Kachchh has large reserves of limestone, bauxite, lignite and bentonite and is a preferred destination for mineral based industries. Nearly, 75% of the total minerals of the state are produced in Kachchh

► With 12 SEZs, 13 industrial estates and 3 industrial parks, the district is poised to become one of the most attractive destinations for industries in Gujarat Close proximity to Mundra Special Economic Zone (SEZ), India’s largest port-led multi-product SEZ

► The Mundra SEZ has a variety of industrial clusters specializing in Light engineering, Auto & Auto Ancillaries, Textile & Apparel, Chemicals & Pharma, Plastic Processing, Stone & Minerals, Food & Ago, Timber & Furniture and Minerals

► The Mundra port supports these industries and growing export volumes through multiple services such as Dry Bulk Cargo (Fertilizer, Agri, Minerals, Coal), Break Bulk Cargo (Steel), Liquid Cargo (Crude), Container Cargo (Roll on & off – RoRo), Dredging and Marine Services.

Source: Industries in Gujarat – Statistical Information – 2014, Government of Gujarat ‘Brief Industrial Profile of Kutch District’, MSME – Development Institute, Government of India http://www.globalgujarat.com/images/kachchh-district-profile.pdf

Page 5 Market Potential

Demand Scenario - Industrial

► The demand for land requirement has been arrived at accounting for different methodologies

► A study conducted on the Mundra Industrial Park City has divided the development over a 25 year period in to Phase I (2001-2010) and Phase II (2010 to 2025)

► Accordingly, share of industrial demand for Mundra has been estimated as a share of the total industrial demand into the state of Gujarat

► The Land requirement in Phase I is estimated to be 680 ha by computing the current trends of spatial distribution of industrial investments in the Gujarat and Kutch. Land requirement for Phase II is estimated to be 1,360 ha

► The Land requirement in Phase I is estimated to be 750 ha by computing the investments in Mundra into Chemical industries, Engineering industries, Mineral industries and other industries derived separately. The estimate for Phase II using the same methodology is 1,015 ha

► Based on both the methods of demand estimation a the final estimates for land requirement in Miundra for Industrial purpose is:

► Phase I: Industrial Demand – 680 Hectares

► Phase II: Industrial Demand – 1000 Hectares Demand Scenario - Non-industrial

► Based on a primary survey conducted by taking the initial interest expressed by potential investment the residential township estimates were derived

► In Phase I – the proposed investment is estimated to be INR 140 crores with the investment to area ration at 750,000

► In accordance with this calculation – the total employment to be generated is estimated to be 1,830

► After factoring for dependent population – the total population in the residential township will be around 3,700

► The average density of 80 persons per hectare is assumed for the township which would translate into 50 Hectares of land requirement for residential township in Phase I of the project

► Additionally, Ecologically sensitive areas will be developed and an offshore aquatic conservation park is proposed to be developed in the Gulf of Kutch

► Located just off the State Highway that connects the towns of Mundra, Anjar and Gandhidham, the industrial park is approximately 35 kms from the nearest rail facility at Gandhidham

► A project for rail connectivity from the Port of Mundra to Anjar / Gandhidham is underway

► The average cost of infrastructure provision at the estate is INR 125 per sqm

► The infrastructure components for the industries will include internal roads, drainage, compound wall, landscaping, waste treatment system, sewerage system, bus terminals, fire stations, police station, post and communication

Page 6 Growth Drivers

► Gujarat non-major ports handled 339.78 million tons of traffic in 2015-16, with CAGR of 11% in the last decade Abiding Growth 1 ► Gujarat ports (including Kandla) account for 41% of traffic in the Traffic in Gujarat total national port traffic - more than any other State ► Captive jetties contribute the largest share of 45.6% followed by private ports with 44.1% in total traffic handled by Gujarat non- major ports.

► 9 of the 12 SIRs of Gujarat lie within the immediate influence area of Delhi - Mumbai Industrial Corridor (DMIC). Delhi Mumbai 2 ►38% of the Dedicated Freight Corridor (DFC) passes through Industrial Corridor Gujarat in Gujarat ► 18 out of 26 districts fall within the Influence Area of DMIC ► Major cities on DMIC : Ahmedabad, Vadodara, Surat ► 60% of total investment in the DMIC is likely to be in Gujarat

. ►In Sagarmala National perspective plan, over 150 projects have been identified across in the areas of Port Modernisation, Port connectivity, Port-led industrialization and costal community development. Sagarmala ► These 150 projects need an investment of INR 4 lakh crores 3 National ► Sagarmala projects could add USD 110bn to India’s merchandise perspective plan exports ► 40 Lakh new direct jobs and 60 lakh indirect jobs would be generated under this plan

► Gujarat is a national leader in 15 of the 25 sectors identified Make in India under the Make in India program, and is also focusing on 6 more 4 Program sectors ► Thus, with a strong base in 21 out of the 25 sectors under Make in India, Gujarat can take strong leadership in this prestigious program of the Government of India

► The new policy is more focussed on key areas like infrastructure development, simplification of labour laws and motivation of new New Industrial innovations through technology transfer. 5 Policy 2015 ► Assistance to micro, small and medium enterprises (MSME) sector for upgrading technology ► It focuses to reduce pollution by promoting use of clean and green energy as well as setting up zero-effluent discharge plants ► Assistance to new start ups

Source: http://www.gmbports.org/assets/downloads/port_sector_outline_25122014.pdf, http://currentaffairs.gktoday.in/gujarat-government-announces- industrial-policy-2015-01201517033.html, New Industrial policy 2015, Sagarmala National perspective plan document

Page 7 Gujarat - Competitive Advantage

State has the highest number of Operation ports and commercial cargo ports

Gujarat credited with India’s First LNG chemical port terminal at Hazira

Ease of Doing Business: Only state which comply 100% with Environmental procedures. Gujarat fares highly when it comes to “Gujarat ranked first in setting up a business, allotment of land and obtaining a ease of doing business as construction permit per DIPP report 2015”

Gujarat ranked as Best Performing State as per NCAER State Investment Potential Index

Strategic location: Located on the west coast of India,, Gujarat is well connected to the major cities of thee Europe world by air and sea routes. MiddleMiddle EastE Well connected to the major cities of the world by airr and sea routes. The state has 45 operational ports,s, Africafricaa 12 domestic airports and 1 International airport inn addition to an extensive rail and road network.

Nearest maritime outlet to Middle East, Africa andd Europe

Handled 40% of national maritime trade in FY15

Gujarat is one of the leading Industrialized States in India and the State has attracted cumulative FDI worth US$ 12 billion from April 2000 to March 2015

Flourishing Economy: State contributes 7.2% of the Nation’s GDP and shows leadership in many areas of manufacturing and infrastructure sectors. Gujarat’s SDP (State Domestic Product) at current price registered a growth of 11% during the year 2014-15.

Source: Socio Economic review of Gujarat (2015-16)

Page 8 Gujarat - Competitive Advantage

Location advantage of Gujarat

Gujarat acts as a gateway to West and to major states across India

► 41 minor and 1 major port are strategically located across a 1600 kms coastline, which is the longest among the Maritime States of India ► Nearest maritime outlet to Middle East, Africa and Europe ► Highest number of commercial cargo ports ► Acts as a gateway to northern and central India; connecting them via road, rail and air - thereby providing immense trading opportunities ► Handled 41% of national maritime trade in FY14

Robust future development of ports in Gujarat

► Port capacity enhancement: Gujarat’s non-major ports capacity is expected to reach 864MMTPA by FY20, which will be 52% of the total capacity enhancement at all non-major ports of India. ► Development of port cities and port based SEZs: Government of Gujarat (GoG) and GMB have planned to develop port cities and SEZs at Mundra and Pipavav . ► Maritime cluster and university development to promote positive synergies between participating entities (both port and non-port based), enhance competitiveness and grow the local maritime economy. ► Shipbuilding parks: Gujarat contributes 89% of the total shipbuilding orders in India (in DWT terms). 10 shipbuilding yards are already operational and 9 have been approved with a proposed investment of ~INR 21 billion.

Page 9 Gujarat - Competitive Advantage

Location advantage of Mundra Port

► Strategically situated on international maritime routes, Mundra Port on the Gulf of Kutch offers multiple benefits for global trade. The Gulf acts as a natural shelter for the port, facilitating 24x7 safe berthing, un-berthing and vessel operations.

► Compared to other ports on West Coast, Mundra Port enjoys logistical advantage in reaching the North-West hinterland of India. This makes it the preferred port for the cargo hubs functioning in the Northern and Western states and union territories of India.

Source: http://www.adaniports.com/businesses/ports-and-terminals/mundra-port

Page 10 Project Information

Site plan

Location

► Mundra port is located at 22°85' N and 69°73’E in Kutch district, Gujarat. . It is ~50 kms from district headquarters, Bhuj and ~360 kms from state capital, Gandhinagar. Existing Infrastructure/Facilities

► Support infrastructure: Tugs, Dredgers, Railway Locomotives ► Terminal infrastructure at the port is capable of handling multiple vessels of different class. ► Dry cargo: Grab Ship Unloaders, Shore Cranes, Stacker-reclaimers ► A large fleet of support equipment such as excavators, pay loaders, dumpers, mobile cranes and cherry pickers ensures uninterrupted and smooth operations across the entire terminal. Additionally, the port has a fully integrated conveyor system for smooth and fast transit of cargo. ► Liquid cargo: Pipelines of varying size and type ► The multipurpose terminal has multiple covered godowns and open yards for storage of large volumes of cargo. ► Covered godowns capacity: 630,000MT of cargo ► Open yards: 1.06 million sq. meters ► Tank-farms capacity: 426,000 KL of products ranging from Oils, Petrochemicals, Chemicals and Vegetable oils. The entire tank farm is equipped with automatic radar gauging system for accurate and real time monitoring.

Source: http://www.adaniports.com/businesses/ports-and-terminals/mundra-port

Page 11 Infrastructure Availability

Utility

Water Power

► Water supply for industry is provided by ► Kutch district has 42 substations Gujarat Water Supply and Sewerage installed with a capacity of 215 MW. Board (GWSSB).

Logistics & Connectivity

Rail Road

► Connected with the Indian Railway ► Mundra Port is connected to the Indian network by a privately developed and National Highway (NH) network through maintained 76-km rail line from Mundra two State Highways(SH) - SH 48 via to . Anjar and SH 6 via Gandhidham. ► The rail infrastructure is capable of ► Mundra Port is well connected to handling 130 trains per day including National Highway No. 8 A (Delhi-Kandla) double stack container trains and long- up to Mandvi via Mundra town. haul trains

Air Port

► Mundra port has its own airport planned ► Close to Kandla and Navlakhi ports as an international air cargo hub. Presently the air runway strip is 900 meters which is to be expanded to 4500 meters. ► The nearest commercial airports are at Bhuj (50 km) and Kandla (60 km)

Source: http://www.adaniports.com/businesses/ports-and-terminals/mundra-port

Page 12 Project Information

Smart Components of the Port City

Future Proofed

Sustainable Smart Port City Intelligent

5 Mundra SIPC will offer State-of-the-art greenfield solutions to investors and workforce alike 5 Going beyond the concept of an industrial zone, the city will nuture new businesses and residential communities in areas that have limited investments to date 5 Therefore, the support infrastructure is designed such that the city stands on three pillars- namely, sustainability, Future Proofed Facilities and intelligent systems

Sustainable Future Proofed City Intelligent ► Zero waste discharge ► Disaster Management ► ICT Enabled ► 100% Recycle ► Water Management Infrastructure ► Renewable Energy ► E-Governance ► Analytics ► SCADA

Page 13 Project Information

Key Consideration

► Success of the project depends on prevailing market dynamics and International trade. ► Project execution depends on necessary approvals from regulators. ► The cost for the project is based on assumptions & benchmarking of similar project, subject to variation with change in any criteria. ► Port development depends on the existing type of industries, conducive environment for the investors, social infrastructure, etc. ► Environmental Concerns: ► Ecologically sensitive areas: The sensitive areas could include, but not limited to, archaeological monuments, historical places, resorts, estuaries, biosphere reserves, forest land, areas of scientific interest, seismic zones, tribal settlements, etc. The coastal area of Kutch has mangroves and fish breeding grounds within the influence zone of 25 kms radius. In addition, an offshore aquatic life conservation park is proposed to be developed in the Gulf of Kutch. ► Water bodies: These include rivers, natural lakes and swamps. No water body is found within 1.5 kms of the proposed SIPC. ► Coastal areas: Since the proposed park is more than 0.5 kms for high tide line of the coastal area, the stipulation made vide Notification (No. SO 14(E) dated 19/2/91) by Government of India, Ministry of Environment & Forests, pursuant to Environmental (Protection) Rules, 1986, does not apply.

Source: Traffic Highlights of FY 2015 -16 and the 1st quarter of FY 2016 -17, Gujarat Maritime Board. Indian Ports Association (http://www.ipa.nic.in/index1.cshtml?lsid=60)

Key Players and Potential Collaboration Opportunities

Port Construction/ Engineering Procurement Construction (EPC) Companies

► Larsen & Turbo ► Lanco Infratech ► Reliance Infrastructure Limited ► GMR Infrastructure ► Punj Lloyd ► Hindustan Construction Company ► GVK Power and Infrastructure Limited ► Shriram EPC

Page 14 Project Financials

Project Structure & Implementation Models

► The equity participation scenarios for the development of the industrial park are as follow: ► Scenario 1: GIDC acting as facilitator by assisting the private developer and does not invest in the project ► Scenario 2: GIDC assumes the role of a developer and assumes the investment responsibility for the entire projects ► Scenario 3: GIDC enters into a joint venture and the investment responsibilities are shared between the GIDC and the private developer ► The sizing of he industrial plots and project mix are as follows:

N Components Plot Sizes Type of % share Land Area o. Industry 1 Chemical Components 1 ha to 10 ha Chemical 16 % 80 Components 2 Engineering 0.5 ha to 5 ha Engineering 34% 170 Component Component 3 Mineral based 1 ha to 10 ha Mineral based 30% 150 component component 4 General Component 0.5 ha to 10 General 20% 100 ha Component Project cost

► A market study conducted across the industrial estates in the State was done to determine the average pricing and based on this the pricing levels for Mundra Industrial Park have been determined: Pricing Level 1 – W.A.P Rs. 349 per sq.m Pricing Level 1 – W.A.P Rs. 390 per sq.m

No. Components Project Sale No. Components Project Sale Price (Rs. per Price (Rs. per sq. km) sq. km) 1 Chemical Components 400 1 Chemical Components 450

2 Engineering 300 2 Engineering 350 Component Component 3 Mineral based 375 3 Mineral based 400 component component 4 General Component 350 4 General Component 400

Source: Mundra Industrial Park Study

Page 15 Approvals & Incentives

Approvals required

► Entry & Exit Procedure: Port projects are funded through a PPP model, in which private players are invited via competitive bidding. ► Setting up of Business: The facility can be operated by the private player through a built-operate- transfer (BOT) model. ► Land Acquisition: The port is primarily owned by the GMB and can be rented or lease from them. ► Power & Water Connection: Additional power for the project can be procured from the existing supplier – Paschim Gujarat Vij Company Ltd. (PGVCL). Similarly, water for the project can be procured from the Gujarat Water Supply and Sewerage Board. ► Environmental Clearance: CRZ Clearance (Coastal Clearance) needs to be obtained from Gujarat Coastal Zone Management Authority (GCZMA). Additionally, pollution clearance from Gujarat Pollution Control Board (GPCB) is also required.

Incentives

► Ministry of Finance Department, Department of Economic affairs has introduced a scheme for support to public private partnership (PPP) in infrastructure. G.O.I.has made provision to financially support the viability gap to the tune of 20% of the cost of the project in the form of capital grant from its viability gap fund.

► The scheme is confined to Public Private Partnership projects taken by the Government or its agencies, where the private sector is selected through open competitive public bidding..

► Tax holidays: The benefits of tax holidays as provided under Section 80 (I) (A) of the Income Tax Act for development, operation and maintenance of power plants, airports, ports, waste management facilities, water treatment plants, etc. is available to the developer.

Page 16 Gujarat Maritime Board www.gmbports.org

Gujarat Infrastructure Development Board www.gidb.org

Industries & Mines Department www.imd-gujarat.gov.in

Gujarat Industrial Development Corporation www.gidc.gov.in

Office of Industries Commissioner

www.ic.gujarat.gov.in

Industrial Extension Bureau www.indextb.com

This project profile is based on preliminary study to facilitate prospective entrepreneurs to assess a prima facie scope. It is, however, advisable to get a detailed feasibility study prepared before taking a final investment decision.

‘SAGAR BHAVAN’ Sector 10-A, Gandhinagar - 382010. Gujarat (India) Phone: +91 79 23238346 +91 79 23238347 Fax: +91 79 23234703 Email: [email protected] www.gmbports.org