Development of Water Sports Facilities

Tourism Government of Contents

Project Concept 3 Growth Drivers 4 Market Potential 5 Gujarat – Competitive Advantage 6 Project Information 10 - Location/ Size - Infrastructure Availability/ Connectivity - Raw Material/ Manpower - Key Players/ Machinery Suppliers - Potential Collaboration Opportunities - Key Considerations Project Financials 16 Approvals & Incentives 18 Key Department Contacts 20

Page 2 Project Concept

Water Sports Activities – Overview Water sports include all adventure sports or sporting activities that involve water such as skiing, motor rides, water scooters and speedboats. These rides are attaining popularity in India. Some popular water sports activities are discussed below:

1 Speed boating

Speed boating is the recreational activity of operating or traveling in a motorboat, speedboat, or powerboat, which is a boat powered by an engine.

2 Water Scooter

Water scooter is a recreational watercraft of two categories. The first is a sit down, where the rider drives the watercraft mainly sitting down and typically holds two people. The second is a stand up, where the rider uses the watercraft standing up.

3 Parasailing

Parasailing is a recreational activity in which a person is towed behind a boat with specially designed parachute known as parasail. The boat then drives off, carrying the parascender into the air. The parascender has no control over the parachute.

4 Banana Boat Ride

Banana boat is an unpowered, inflatable recreational boat meant for towing. Different models usually accommodate three to ten riders sitting on a larger, main tube and resting their feet on two laterally flanking tubes which stabilize the boat. The main tube is often yellow and banana-shaped.

5 Snorkelling

Snorkelling is the practice of swimming at the surface of a body of water while equipped with a diving mask, a shaped tube called a snorkel and usually swim fins.

6 Scuba Diving

Scuba diving is a mode of underwater diving in which a scuba diver uses a self- contained underwater breathing apparatus (scuba) to breathe underwater.

Page 3 Growth Drivers

Potential Market Size Water sports primarily caters to the needs of adventure tourists, as well as other adventure enthusiasts. The target market for this facility are the domestic and foreign adventure tourists and the youth population. The local/weekend tourists can also generate substantial demand.

Adventure sports market The global adventure sports market is (in INR billion) estimated at nearly INR5,340 billion (US$89 billion), while the Indian market is Global 5,340 estimated to be around INR5 billion (US$83 million). India 5 There is a significant potential to drive growth and cater to the growing demand for adventure sports in India.

Growth Drivers

66% of the population in India is below 35 years, with 0-14 >34 years, the median age of 27 years driving consumption. years, 34% Demographic 31% Adventure sports are a huge attraction among the age dividend 15 - 34 years, group of 15-34 years. 35%

By 2020, 35% of the population will reside in urban centres, with nuclear Greater households. Higher incomes would drive growth of adventure sports. urbanisation The proportion of the working-age population is expected to rise to 46% by 2020, raising the amount of income per household.

India’s per capita income at the current market price is estimated to increase Rising per at a CAGR of 15% to INR190,000 in 2014-2020E. capita income Moreover, share of discretionary spend is expected to increase from 59% in FY10 to 67% in FY20. Within discretionary spend, the share of leisure is expected to increase at a CAGR of 6.4%.

Campaigns such as Khushboo Gujarat Ki, Incredible India, Athithi Devo Bhava Policy were launched to harness the tourism industry’s potential. FDI under the support automatic route in tourism and hospitality is allowed up to 100%, subject to applicable regulations and laws. Tourism and hospitality had a cumulative FDI inflows of US$8.45 billion in FY15.

The GoI has made concerted efforts to improve and upgrade infrastructure Improved facilities at important tourist destinations, thereby, improving accessibility. The infrastructure FY16 Union Budget allocated INR14.8 billion toward infrastructure development for destination and circuits, domestic / overseas promotion and publicity, etc.

Page 4 Market Potential

Demand – Supply

1 Growing popularity of adventure sports

Adventure tourism is one of the most popular segments of tourism industry. It includes a wide range of adventure sports activities. India’s adventure tourism industry nearly doubled in size between 2009-2014, driven by a key shift in interest towards adventure sports, primarily from domestic tourists who are looking beyond usual holidays for new experiences. The demand for adventure sports by Indian tourists increased 400% between 2008- 2013, indicating a strong domestic market for adventure sports, including water sports. Out of nearly 2 million adventure tourists, international tourists contribute up to 10% or 0.2 million, while the rest 1.8 million are domestic tourists. According to an analysis by industry chamber, PHDCII, adventure tourism is growing at 20% YoY, and is expected to emerge as one of the biggest foreign exchange earners — surpassing US$27 billion market size by 2018, provided that key policy initiatives are undertaken by state governments.

2 Increasing monetization opportunities

Opportunities to monetize water sports activities are now better than ever. With internet users in India set to grow to 500 million by the end of 2016, the online space and social media is becoming a key source to promote and monetize water sports. Gujarat has a youth population (15-24 years) of around 12 million. This youth population provides a significantly large target market for water sports in Gujarat. Promotions and monetization methods may include offering water sports as weekend getaway packages, partnering with online travel and coupon portals to offer deals on water sport activities, striking corporate tie-ups, as well as partnering with foreign tourism boards.

3 Rise in water sports training institutes

India is seeing a rise in water sports training institutes across states. Most recently, two new water sports institutes are being established. In December 2015, Haryana Govt. announced the establishment of Adventure Sports Academy that would be set up on 5 acres of land at Morni in Panchkula district, and will offer adventure sports training, including aero sports, ground sports, and water sports. In January 2016, Gujarat Govt. started the Water Sports Academy at Narmada Park to impart water sports training on sailing, water skiing and wind surfing, knee boarding, wake boarding, fly boarding, jet ski and speed boat.

Page 5 Gujarat - Competitive Advantage

Mapping Gujarat Tourism

Business Tourism

High presence of Indian and global companies Archeological and Heritage Adventure Tourism 18 SEZs operational Tourism Longest shoreline of 1,600 km - beaches, forests, hills, Variety of historical forts, Science City, theme parks, palaces, dargahs, temples Gujarat zoos, lakes Proactive Government and aggressive marketing Untapped tourism opportunity Strategic location Unique blend of pilgrimage, adventure, hill station, beaches, Cultural Tourism Wild Life Tourism heritage and desert Handicrafts such as Rarest and large number bandhani, patolas, kutchi of flora and fauna Fairs and festivals like Four national parks and navratri, makarsankranti Religious Tourism 21 sanctuaries Home to multitude devotional centres and temples like , Dakor, Ambaji, Somnath

Key Initiatives to Promote Gujarat Tourism by the Government

The Gujarat government granted industry status to tourism and unveiled a new tourism policy in 2015, providing incentives to boost the sector. Investment in Gujarat’s tourism sector is expected to grow five-fold from INR54 billion (US$0.8 billion) to INR269 billion (US$4 billion) during 2014–2025.

Eight tourism hubs have been created for the convenience of tourists visiting Gujarat. These are in metro, Ahmedabad (); (), (), , and () and (Kutch).

Gujarat Infrastructure Development Board has prepared concession agreement model under PPP for the development of tourism sector projects in Gujarat

The state government has implemented Panchavati Yojana, with the objective of providing facilities for recreation in villages and encouraging environment friendly activities to develop natural sites with tourism potential.

Emerging areas in Gujarat’s tourism industry are spiritual tourism, heritage tourism, cultural tourism, event based tourism, water and adventure sports, nature tourism, cruises, theme parks, convention centres for meetings and conferences.

Page 6 Gujarat - Competitive Advantage

Gujarat stands at an excellent business opportunity for domestic and international tourists

Domestic Tourists (in lakhs) International Tourists (in lakhs)

1,233 22 CAGR: CAGR: 14.1% 13.2%

637 12 376 7 194 4

FY11 FY16 FY20E FY25E FY11 FY16 FY20E FY25E

Source: Tourist Flow Information System- Annual Report 2015-16 The total flow of tourist is expected to record an increase over the years

This is attributed to the growing prominence of the state as a major business hub.

Total contribution to GDP Total Investment (USD billion) Employment (in million)

CAGR: CAGR: 5.0% 3.00 5.76% 11.0% 4.00 CAGR: 15.63%

2.7%

0.95 0.81

2014 2025P 2014 2025P 2014 2025P

Source: Tourism Policy for state of Gujarat(2015-20)

Tourism in India accounts for 7.5% of the GDP and is the third largest foreign exchange earner for the country. Gujarat is expected to contribute 5% to the total GDP by 2025.

The business is expanding both in terms of turnover and boundaries and therefore contributions total investments by Gujarat are expected to increase.

Today worldwide, one in eleven jobs may be ascribed to the tourism industry. Gujarat is expected to generate 3 million jobs by 2025.

Page 7 Gujarat - Competitive Advantage

Initiatives – Gujarat Tourism Policy 2015-2020

Grant of Industry status First state to have accorded Industry status to Tourism sector. to Tourism sector

Development ofwayside Planning to develop wayside amenities at an interval of about 75 kms. on selected major arterial roads to be progressively amenities extended to other major trunk roads.

The implementation of PPP projects in coordination with GIDB and as per the Government Resolution dated 2nd March 2015 PPP in Tourism for tourism projects, which would be applicable to both Greenfield and Brownfield projects.

Special incentives for adopting ICT and emphasis on Promotion of ‘Make in promoting ICT-enabled technologies through mobile India’ and ‘Digital India applications, social networking, big data analytics, blogs and virtual tourism.

Participation in GoI Emphasis on active participation in GoI schemes like Swadesh Darshan, PRASAD, HRIDAY, AMRUT, LRGP and schemes other schemes.

Tourism development needs multi-departmental coordination. Active collaboration with The State Government plans to actively collaborate with MoT, the Central Government MoUD, MoC, MoEF, ASI and other GoI Ministries / Organizations.

Annual Tourism Awards would be instituted for recognition of Excellence awards excellence in tourism products and services as well as for contribution to the growth of tourism in the State.

Institution of Tourist Police to suitably assist, facilitate and Tourist Police guide the Tourists as also to safeguard their interests.

Page 8 Gujarat - Competitive Advantage

Water Sports Destinations in Gujarat

Gujarat is geographically well-located for water sport activities with a long coastline (1660 kilometres) and a multitude of beaches. The state offers a wide range of beautiful beaches and offers good potential for water sports. These beaches are the finest in India and attract a huge number of tourists every year. The pristine waters, soft sands and rich flora and fauna are their main attractions. Gujarat Tourism is actively looking to develop water sports activities in the state for the tourists, on the lines of those offered in Goa.

Popular beaches in Gujarat

Page 9 Project Information

Development of Water Sports Facilities in Gujarat

The is seeking investments to develop water sports facilities at select beaches in Gujarat,

Water Sports activities like parasailing, yachting, motor boating and water skiing should be suitably developed in collaboration with national and international operators. Project brief Water Sports activities will be duly supported for ancillary infrastructure development and marketing support by the Government. Infrastructure works like development of pathway, illumination, renovation of fishery jetty, tourist reception centre, food court and cafeteria, change room with cloak room, parking, landscape, beach furniture and site development have been proposed for development of the project.

Project size Support crowd capacity of around 300 – 500 people/day.

The target market for the Water sports activities are the domestic and foreign tourist. The major subsections are foreigners, NRG/NRI, upper class domestic tourists and week end tourists Target market from nearby areas.

Due to large number of local/weekend tourist, this demand is generally found to be high during weekends, festivals and public holidays.

Potential Destinations

Kutch Mandvi

Dwarka Shivrajpur

Surat Dandi

Valsad Tithal Tourist flow*

Valsad Umbergaon

Page 10 Project Information

Potential Destinations

Mandvi beach is located about 288 kms away from the city of Ahmedabad, close Destination-wise Tourist flow – Historical and projections Mandvi to the Gulf of Kutch’s northern coast. (in ‘000s) Considered to be one of the beautiful beach beaches in Gujarat, this beach offers a 64.2 99.7 136.9 211.1 362.7 perfect place for enjoying swimming and FY FY FY FY FY a leisurely beach walk. 2009 2012 2016 2020E 2025E

8,034 Located at a distance of nearly 10 km Shivrajpur from Dwarka, makes 3,978 2,267 an ideal holiday destination for travellers 1,436 beach with its picturesque view, blue water and 847 fine white sands. FY FY FY FY FY 2009 2012 2016 2020E 2025E

Located very close to the Dandi village 9,593 is the beautiful . It is a huge beach and is known for its historic 4,197 significance. The historic Dandi beach 2,166 was led by in the year 681 1,411 1930 at this place. The natural beauty of the place attracts huge amount of FY FY FY FY FY tourists. 2009 2012 2016 2020E 2025E

Located in Valsad, Tithal Beach attracts local and international tourists. Unlike the other white or golden beaches of Tithal beach Gujarat, black sand is the main attraction point of this beach. Apart from 146.1 216.2 making a perfect weekend gateway for 61.7 92.1 106.8 travellers, this place is also home to two FY FY FY FY FY famous temples. 2009 2012 2016 2020E 2025E

Umbergaon is a village located in the of Gujarat state near to Umbergaon the border of Maharashtra state. The 3,034 1,309 beach serene beach attracts many tourists 206 259 668 from both Maharashtra and Gujarat for its calmness and peacefulness. FY FY FY FY FY 2009 2012 2016 2020E 2025E * For Shivrajpur, Dandi and Umbergaon, nearest major tourist destination’s tourist flow is being provided.

Page 11 Project Information

Basic Safety and Monitoring Requirements for Water Sports

The development of the project facilities shall be in accordance with safety and standards for rides 2003-04 formulated by Indian Association of Amusement Parks and Industries (IAAPI) along with BIS (Indian Standards). The applicable standards are IS 15475 – Amusement Parks Rides Safety Standards. For internationally manufactured equipment, TUV certification must be followed. On the operational front, Developer is required to obtain ISO 9001 (Quality) and OHSAS 18001 (Safety) certification to ensure the quality and safety of daily operations of the project. For water based adventure activities the operator must ensure compliance to “Basic Minimum Standards for Adventure Tourism Related Activities” issued by Ministry of Tourism. Water sports specifically have to comply with the “Safety Norms for Watersports” by National Institute of Watersports, Ministry of Tourism, Government of India. The selected water sports operators / agency/ individual will have to take insurance of the passengers to the extent of INR0.5 million per passenger. No permanent structure will be allowed on the beach. The selected water sports operators / agency/ individual shall promptly submit verified statements, reports, accounts, documents and any other particulars as required by the authority from time to time. Guidelines on Water Sports

All leaders or guides must possess a valid certificate or license from a recognized institution or association. All leaders and guides must be good swimmers and should be well trained in water rescue techniques, first-aid & CPR (Cardio pulmonary resuscitation). A rescue craft should always be in sight/in radio contact of persons engaged in water sports. For river sports, a minimum of two rafts or a raft and one/two safety/rescue kayaks is a must). All equipment should be inspected by an authorised person or the manufacturer once every season or six months, whichever is less. A log book should be maintained for each craft, which should be a record of usage, inspection, repairs and modifications. All craft which are away from the base of operations should carry a first-aid kit, emergency equipment and repair kit. They should, where appropriate, carry navigational equipment. All craft should display of the list of minimum equipment and accessories as recommended by the manufacturer. The capacity rating of the craft should be prominently displayed so as to be visible to the users along with a warning of potential hazards. The age limit for water sports should be prominently displayed in all literature and also base of operations. Life jackets must be on at all times while in the sea. A liability waiver should be signed by the client prior to the trip. This should clearly mention the inherent risks involved in the sport.

Page 12 Project Information

Project Components – Equipment for Water Sports

The following equipment from reputed firms are recommended for each water sports facility:

Sr. Equipment Numbers Numbers 1 Water scooters 6 2 Speed Boat 2 3 Banana Boat 2 4 Water Ski 3 5 Pedal surf 8 6 Parasail 1 7 Ski Boards 4 8 Life jackets 30 9 Lifeboats 2

Leading players and possible collaboration opportunities

Rae Sport

Praga Marine

Litmus Marine International

Yamaha Motor Corp.

Boat Craft India

Mahindra Ocean Blue Marine P Ltd

Key Water Sports Training Facilities in India

1. National Institute of Water Sports, Panjim, Goa

2. Regional Water Sports Centre, Pong Dam, Himachal Pradesh

3. Indian Institute of Scuba Diving and Aquatic Sports (IISDA), Tarkarli, Maharashtra

4. Water Sports Centre, Bilaspur, Himachal Pradesh

Page 13 Project Information

Estimated Manpower

The following equipment from reputed firms are recommended for each water sports facility:

Sr. Resource Numbers

1 Manager 2

Trainers – 5 nos. – one per each sport (one trainer 2 may specialize in multiple aro sports as well) 10

Other Staff (10 nos. (5 residential and 5 non- 3 residential) – cook, cleaner, other helpers) 10

Total 22

Key considerations

Gujarat would become the state which would The site could be enjoyed for surfing, jet uphold, host and develop various eco, skiing, kayaking or swimming, where the adventure sports and water sports initiatives beaches of Gujarat would serve as the perfect location for different water activities It is said to become one of the major tourists attractions and place Gujarat is on the global Integrated development of Tourism map with Adventure and Sports Tourism with infrastructure facilities is also being Proactive Governance promoting the growth of materialized the Sector

Page 14 Project Information

Infrastructure Availability - Logistics & Connectivity

Mandvi Dwarka Surat Valsad Mandvi does not Dwarka is a Surat is well Valsad is has a have a railway station on the connected with major railway station of its own. Ahmedabad-Okha Valsad, and station where However, Bhuj is railway line, with Mumbai towards almost all the the nearest railway trains connecting its south and with major trains stops station about 56 it to Jamnagar , km away. Several (137 km), Rajkot Vadodara and Rail trains run from this (217 km) and Ahmedabad in the station connecting Ahmedabad (471 north it to other parts of km) the country Mandvi is well Dwarka is on the Surat is well Valsad is located connected by state highway connected to on National road with other from Jamnagar to various locations Highway major cities of Dwarka. Direct through national connecting Surat Gujarat, including buses are and state to Mumbai. Ahmedabad, available from highways. NH 8 Valsad is 200 km Road Rajkot, Jamnagar, Jamnagar and connects Surat from Mumbai and via Ahmedabad with Mumbai (307 and 100 km from National Highway km) Surat 8 and 8A

There is no airport Nearest airport is Surat has a Nearest airport is in Mandvi and the Jamnagar (137 domestic airport Surat which is nearest airport is km) which is well well connected to Bhuj Airport which connected to different metros is 62 km away different metros. It with daily flights Air from Mandvi has daily flights to to Delhi, Jaipur, Delhi, Jaipur, and and Ahmedabad. Ahmedabad Mandvi is a port Magdalla & Hazira Nearest seaport is city in the Ports in Surat have located at Surat- Western India in good rail and road Hazira; and two the Kutch, Gujarat connectivity. new ports are region. Magdalla port is 2 proposed at Km away from the Nargol and at Port state highway and Vansi Borsi 15 Km away from NH-8

* For Shivrajpur, Dandi, Tithal and Umbergaon, nearest major city’s connectivity is provided. Shivrajpur – Dwarka, Dandi – Surat, Tithal and Umbergaon – Valsad. Page 15 Project Financials

Estimated Project Costs

The Gujarat government is seeking private operators that will carry out water sports activities at the above mentioned locations. Project investment will be through PPP model, with the government being responsible for developing supporting facilities.

The investment for this size of the project would be approx. INR30 million. Considering 5 locations, the total investment in this sector works to be approx. INR 150 million.

Cost parameters Total cost (INR million)

Land & site development 0.90

Boats / equipment 27.00

Office equipment 0.10

Furniture & fixtures 0.10

Preliminary & pre-operative expenses 0.90

Provision for contingencies 1.00

Total capital cost of project 30.00

Page 16 Project Financials

Project Structure & Implementation Model

The project shall be developed through a PPP model on BOT basis (Build, Operate and Transfer). The selected developer is required to provide infrastructure like Boats / Boating equipment of different capacities, thereafter, operate and manage the infrastructure and boats., while the ancillary infrastructure at the beach will be developed by the government. Following is a schematic diagram showing possible development model through PPP:

Tourism Corporation of Gujarat Limited / Local Project consultant Municipal Corporation

Government selects the The consultant undertakes private player through techno-economic feasibility competitive bidding study and master plan process and enters into preparation; assists with an agreement to form a SPV bid process management Special Purpose Vehicle and partner selection (SPV) process; and acts as a project management consultant during the implementation period until Private investor (project developer) one year of commercial operations The developer will create suitable facilities at the site mentioned considering site specific environmental and relevant factors on Design, Engineer, Procure, Construct, Operate, Maintain and Transfer concession format

Page 17 Approvals and Incentives

Approvals Required

Adventure Sports should have the requisite infrastructure, equipment and trained staff, along with appropriate safety-and-rescue set-up, that will provide tourists with an opportunity to undertake permissible adventure activities. All requisite permissions from various Competent Authorities as also a comprehensive insurance cover will have to be obtained beforehand. Establishing an water sports facility would require approvals from following government authorities:

Registration as commercial establishment with the required state/district authority

Adventure Tour Operator (ATO) registration with the Department of Tourism

Local body clearances

Clearance from Gujarat Maritime Board

No objection certificate from Gujarat Pollution Control Board

Any other approvals from Central or State Government or Local bodies or Statutory Authorities Incentives for Water Sports Activities

Central Government: The Central Financial Assistance is being extended to various State Governments/ Union Territory Administrations for development of adventure tourism destinations.

State Government: Adventure Sports (which includes water sports) has been classified as Tourism Unit under the New Tourism Policy. Following are some of the capital subsidy incentives on Tourism Units:

Capital Subsidy to the Eligible Tourism Units Eligible Capital Investment (excluding land cost) Admissible Maximum limit subsidy Investment upto INR500 million 15% INR75 million Investment above INR500 million 15% INR100 million Tented accommodation (with minimum investment of INR2 20% INR1.5 million million)

Equipment worth INR10 million and above for adventure & 10% INR5 million water sports

Page 18 Approvals and Incentives

Additional Capital Subsidy of 5% for New Tourism Units Within the Corporation limits of and falling within the radius of 20 kms. Owned and managed by women entrepreneurs (with minimum equity participation of 51% in the entity) SC/ST categories to an additional 5% subsidy over and above the ‘Admissible Subsidy’.

Interest subsidy to the eligible tourism units

@5% of the loan amount with maximum amount of INR2.5 million per annum for a period of five years in Municipal Corporation areas for eligible tourism units

@7% of the loan amount with maximum amount of INR3.0 million per annum for a period of five years in the areas other than mentioned above.

Other Exemptions

Luxury Tax - 5 years from the date of commencement of commercial operation

Entertainment Tax - 5 years from the date of commencement of commercial operation

Electricity Duty - 5 years from the date of commencement of commercial operation for New Tourism Units only.

100% reimbursement of stamp duty and registration fee on sale/lease/transfer of land for the first transaction only.

Special Package for Mega Tourism Units The State Government shall duly promote and facilitate Mega Tourism Projects that have a large multiplier effect on the economy, leading to employment generation and inclusive growth in the State. Any type of Mega Tourism Units like theme parks, amusement parks, water parks, etc. meeting the qualifying criteria of Mega Tourism Units will be eligible. Following incentives would be offered to eligible Mega Tourism Units:

100% reimbursement of stamp duty and registration fee on sale/lease/transfer of land for the first transaction only. Reimbursement of stamp duty and registration fee would be done after the commencement of commercial operations.

Capital subsidy of 15% of eligible capital investment (excluding the cost of the land) subject to a ceiling of INR200 million.

Exemption from luxury and entertainment tax for a period of seven years from the date of commencement of commercial operations.

Exemption in electricity duty would be for a period of five years from the date of commencement of commercial operations.

Mega tourism units shall not be entitled to any interest subsidy.

Page 19 Tourism Corporation of Gujarat Limited http://www.gujarattourism.com/

Department of Tourism, Gujarat http://www.gujarattourism.com/

Industries and Mines Department, Gujarat www.imd-gujarat.gov.in/

iNDEXTb - 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.

Tourism Corporation of Gujarat Ltd, H. K. House, Opp: Bata Showroom, Ashram Road, Ahmedabad, Tel: +79 26578044/46/26589172 Fax: +79 26582183 E-mail: [email protected]