Jawaharlal Nehru Port Trust

JAWAHARLAL NEHRU PORT TRUST

Detailed Project Report for Deepening and Widening of Mumbai Harbour Channel and JN Port Channel (Phase II)

DETAILED PROJECT REPORT ‐ EXECUTIVE SUMMARY (FINAL)

March 2016

HOWE INDIA HOUSE, 81 NEHRU PLACE, NEW DELHI – 110 019, INDIA Phone : +91(011) 49508000 ; Fax : +91(011) 26467557 ; E-Mail : [email protected] Web : www.howeindia.com

Table of Contents

1.0 EXECUTIVE SUMMARY 5

1.1 Introduction 5 1.2 Data Collection 5 1.3 Feasibility of Deepening Approach Channel for 18 m Draft Vessels and Setting up a Deep Water Terminal 6 1.3.1 Deepening of the Channel to Cater to 18 m Draft Vessels 6 1.3.2 Setting up a Deep Water Terminal in Mumbai Offshore Region 6 1.4 Project Environment 7 1.4.1 Temperature 7 1.4.2 Wind Speed and Direction 7 1.4.3 Rainfall 7 1.4.4 Wave Height 7 1.4.5 Currents 7 1.4.6 Tides 7 1.4.7 Bathymetry 8 1.4.8 Sub‐soil profile 8 1.4.9 Siltation in the Existing Channel 8 1.5 Traffic Forecast 9 1.5.1 Container Traffic Forecast 9 1.5.2 Liquid Cargo Forecast 11 1.6 Design Vessel Size 11 1.7 Vessel Traffic 12 1.8 Channel Design and Alternatives 13 1.8.1 Channel Depth 13 1.8.2 Channel Width 13 1.8.3 Anchorage 14 1.8.4 Emergency Anchorage near Karanja 14 1.8.5 JNP Anchorage near Uran Patch 15 1.8.6 Shifting of MbP Anchorage 15 1.8.7 Preferred Alternative 15 1.9 Dredging Volume 16 1.9.1 Capital Dredging 16 Capital Dredging for Alternative I 16 Capital Dredging for Alternative II 17 1.9.2 Maintenance Dredging 17

Deepening and Widening of Mumbai Harbour Channel and JN Port Channel (Phase II) 2 Final Detailed Project Report – Executive Summary March 2016

1.9.3 Dredged Material Management 18 1.9.4 Disposal of Dredged Material 18 1.9.5 Environmental Aspects 18 1.10 VTMS and Navigational Aids 19 1.10.1 Navigational Aids 19 1.10.2 VTMS 19 1.11 Fenders and Bollards 19 1.11.1 Fenders 19 1.11.2 Bollards 19 1.12 Capital Costs 19 1.13 Project Implementation Schedule 20 1.14 Financial Analysis 20 1.14.1 PPP Model 20 1.14.2 Annuity Model 21 1.14.3 Development by JNPT 21 1.15 Economic Analysis 22 1.16 Conclusion 22

LIST OF TABLES Table 3: Bathymetry Details of JNP Navigational Areas Table 4: Design Vessel Size Table 5: Year‐wise Total Vessel Traffic in Approach Channel Table 6: Alternatives for Channel Depths Table 7: Channel Depth for Various Alternatives Table 8: Width of Approach Channel for Various Design Vessels Table 9: Design of Bends for Alternative I to Alternative IV Table 10: Diameter and Depth of the Emergency Anchorage near Karanja Table 11: Multi‐Criteria Analysis of the Channel Design Alternatives Table 12: Estimated Quantity of Capital Dredging: Alternative – I (12500 TEU Vessel and Tidal Window of 2.2 m) Table 13: Estimated Quantity of Capital Dredging: Alternative ‐ II (16000 TEU Vessel and Tidal Window of 2.2 m) Table 14: Capital Cost Estimates for Alternatives I & II Table 14: Summary of Financial Results for PPP Model Table 16: Summary of Financial Results for Annuity Model

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Table 17: Summary of Financial Results for Development by JNPT Table 18: Results of Sensitivity Analysis Table 19: Total Economic Benefits

LIST OF FIGURES Figure 1: Container Traffic Forecast (million TEU) Figure 2: Constrained and Unconstrained Traffic Forecast Figure 3: Liquid Cargo Traffic Forecast at JNP Existing BPCL Traffic

LIST OF DRAWINGS I‐514/JNPT/115 Proposed Dimensions and layout of the approach channel

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1.0 Executive Summary

1.1 Introduction

Jawaharlal Nehru Port (JNP) is one of the twelve major ports of India and has a cargo handling capacity of about 64 MTPA. JNP is located adjacent to Mumbai Port and shares a common navigation channel with Mumbai Port for a substantial part of its length. Till 2012, the depth of the channel was (‐) 11 m CD and the depth alongside berth at JNP was (‐) 13.50 m CD. With increasing cargo handling requirements, consequent expansion in its capabilities and competition from neighbouring ports, JNP has been called upon to handle new generation container vessels with wider beam and deeper drafts.

JNPT conceptualized the capital dredging of channel in two phases to enable the movement of these new generation vessels. In Phase I, the channel depth was increased from (‐) 11 m CD to (‐)13.1 in JNP area and (‐) 14.20 m CD in outer channel to facilitate handling vessels of 14 m draft (about 6000 TEU) with utilization of tidal window. The channel length was increased from 29.5 km to 33.5 km. JNPT is contemplating to undertake the Phase II dredging of the approach channel to facilitate handling vessels with larger drafts.

JNPT has entrusted M/s Howe Engineering Project (India) Private Limited (HOWE) to provide consultancy services for preparation of DPR for “Deepening and Widening of Mumbai Harbour and Jawaharlal Nehru Port Channel (Phase II)”.

1.2 Data Collection

HOWE collected earlier Detailed Project and Feasibility Reports prepared for channel widening and deepening from JNPT during kickoff meeting. Apart from these various model study reports prepared by CWPRS, bathymetric survey and geotechnical survey reports prepared by various agencies were also collected. HOWE has observed data gaps in the field survey data provided by JNPT during kickoff meeting and suggested carrying out the following surveys:

 Bathymetric survey at dredge disposal grounds (DS3 and DS4) and in certain sections of outer approach channel (Section A‐B) & emergency anchorage area  Sub‐bottom profile survey and borehole investigations in Section B‐C of the approach channel and emergency anchorage area

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JNPT have appointed M/s Ocean Science and Surveying (OSAS) for carrying out the above surveys during April 2015. M/s OSAS submitted their survey reports during the third week of June 2015 and the survey results were used in preparation of the Detailed Project Report.

1.3 Feasibility of Deepening Approach Channel for 18 m Draft Vessels and Setting up a Deep Water Terminal

JNP desired to quickly explore the feasibility of deepening the approach channel to cater to vessels of 18 m draft and also for setting up a deep water terminal in Mumbai offshore region. Details of the same are presented below.

1.3.1 Deepening of the Channel to Cater to 18 m Draft Vessels

Deepening the approach channel to cater to 18 m draft ships is not feasible due to the following aspects:

 The existing container berths at JNP are designed to cater to ships of 15 m draft only.

 A review of the biggest container ships in order book or even at planning stage reveals that the draft is of the order of 15 to 16 m.  Deepening for 18 m draft ships would result in a cost of Rs. 14650 crores as against Rs. 2,029 crore for 15 m draft ships, but generation of any additional revenue is unlikely.

1.3.2 Setting up a Deep Water Terminal in Mumbai Offshore Region

Development of deep water terminal in Mumbai offshore Region is not suitable due to the following:

 At JNP and nearby coastal areas, deep water is quite far from shore i.e. 10 m contour and 20 m contour are at a distance of 4 to 8 km and 16 to 24 km from the shore, respectively.  Creation of offshore facility would require creation of breakwaters, berthing structure and approach trestle, having technical and cost implications. The entire cost of creating an offshore terminal with approach is likely to be much higher than dredging (including rock) for deeper depths at JNP or any other satellite port, which could be planned nearby the JNP.

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1.4 Project Environment

1.4.1 Temperature

The temperatures range between 11oC to above 40oC. April and May are the hottest months and January is generally the coolest month in a year.

1.4.2 Wind Speed and Direction

The nearshore wind blows from SW to W for 37% of the time and W to N for 55% of the time. The wind speed is less than 15 m/s (54 km/hr) for 87% of the time and 20 m/s (72 km/hr) for 95% of the time.

1.4.3 Rainfall

Annual rainfall is about 1800 mm. 94% of the annual rainfall occurs in the south‐ west monsoon season (June to September). On an average, there are 73 rainy days in a year, out of which about 67 days occur during the southwest monsoon season.

1.4.4 Wave Height

The predominant directions of waves in the nearshore zone are from the WSW, W, WNW, NW. The wave height is less than 2 m for 83% of the time and the predominant wave period is 10 seconds.

1.4.5 Currents

Prevailing current velocity is of the order of 1.5 knots peaking to 2.5 knots occasionally during the monsoon. A maximum cross current of 1.5 knots can be considered.

1.4.6 Tides

The tides at JNP are semi‐diurnal in nature and the mean tidal range is 3.66 m. The highest and lowest spring tides are +4.9 m and +0.12 m wrt CD, whereas the mean sea level is +2.51 m CD.

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1.4.7 Bathymetry

Bathymetry survey of approach channel based on the survey by M/s Fugro in May 2015 is given in table below.

Table 3: Bathymetry Details of JNP Navigational Areas

S. No. Channel Section Length (m) Width (m) Current Dredged Levels (m CD) 1. AB 9775 800 ‐14.3 to ‐15.5 2. BC 4680 370 ‐14.6 to ‐14.9 3. CD 7980 370 ‐14.3 to ‐15.0 4. DE 4365 370 ‐14.0 to ‐15.0 5. EF 6690 400 to 500 ‐13.1 to ‐18.5 Berth Pockets and ‐ 6. ‐16.5 emergency Anchorage

Bathymetric survey was carried by M/s Ocean Science and Surveying at dredge disposal grounds (DS3 & DS4). The survey results are as follows:

 The water depth ranged from a minimum of (‐) 14.2 m CD to a maximum of (‐) 18 m CD at DS3 and (‐) 22.8 m CD to (‐) 25 m at DS4 areas.

1.4.8 Sub‐soil profile

The sub‐soil in sections A‐B and B‐C comprises of very soft marine clay. In sections C‐D, D‐E and E‐F, the substrata comprises of soft marine clay underlain by a mixture of very stiff marine clay and sand which in turn is underlain by layers of weathered rock of varying degree and sound amygdaloidal basalt. Rock outcrops are noticed at some portions of sections C‐D and E‐F.

The thickness of the marine clay layer varies from 2 m to 11 m. The starting level of sound rock varies from ‐11.0 m CD to ‐25 m CD. The level of rock is higher in the JNP harbour as compared to the rock levels in the main harbour channel.

1.4.9 Siltation in the Existing Channel

CWPRS carried out siltation studies of the approach channel and harbor area of JNP and the estimated siltation was about 5 million cum, which is in agreement with the annual maintenance dredging.

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1.5 Traffic Forecast

HOWE have carried out container and liquid bulk traffic forecast for JNP based on the review of the past trends in traffic growth and making suitable assumptions on future growth rates.

1.5.1 Container Traffic Forecast

The container traffic forecast was made adopting two different methodologies viz., the long term growth rate approach and the cluster approach.

Long Term Growth Rate Approach

The historical CAGR of container trade at JNP is calculated for 20 years, 15 years, 10 years and 5 years. The weighted average CAGR is then computed by assigning appropriate weightages to various CAGRs. The weighted average computed is used to determine the traffic forecast for the first ten year period, post which the average CAGR was re‐computed and traffic is forecasted. The forecasted container traffic for JNP by the year 2044‐45 (FY45) is 26.4 MTEU.

Cluster Growth Approach

Indian container market is grouped into clusters and the percentage share of JNP in the national container traffic is analysed. The future share of JNP in the national traffic is projected considering the existing scenario and development potential of the clusters. The forecasted container traffic for JNP by the year 2044‐45 (FY45) is 33.0 MTEU.

Comparison of Container Traffic Forecast Approaches

Both long term growth rate and cluster growth methodologies assume that adequate port infrastructure is available at JNP i.e., draft for handling any size of container vessels and commensurate evacuation facilities. Both methodologies predict that JNP will be able to handle about 10 million TEU of containers by FY25.

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33.0 35.00 30.8 29.2 27.7 30.00 26.2 24.8 23.5 22.2 25.00 21.0 19.8 26.4 18.7 25.2 17.7 24.0 20.00 15.716.7 22.8 13.914.8 21.7 13.1 19.720.7 11.612.3 18.8 15.00 10.210.8 17.017.9 8.9 9.5 16.2 7.8 8.4 14.715.4 10.00 6.4 6.8 7.3 13.113.9 5.1 5.5 5.9 11.712.4 10.511.1 9.3 9.9 5.00 8.2 8.8 6.5 7.0 7.6 5.2 5.6 6.1 0.00 4.5 4.8 FY15 FY17 FY19 FY21 FY23 FY25 FY27 FY29 FY31 FY33 FY35 FY37 FY39 FY41 FY43 FY45

CAGR Approach Cluster Approach

Figure 1: Container Traffic Forecast (million TEU)

JNP has a capacity to handle 4.2 MTEUsPA container cargo and has plans to augment the capacity to 9.8 MTEUsPA. To cater to the traffic beyond FY25 further capacity augmentation is required.

Traffic Forecast at Constrained Infrastructure

In case the existing dredged level and channel width prevail, the ultimate throughput at the JNP shall be limited to 8.37 MTEUsPA only. Once JNP implements the dredging project to allow handling of ships having draft of 15.0 m, JNP can handle about 10.05 MTEUsPA.

12.00 Container Traffic in MTEUsPA 9.8810.05 10.05 10.05 10.05 10.05 10.05 10.05 10.05 10.05 10.05 10.05 10.00 9.33 8.82 8.18 7.59 8.00 7.04 8.37 8.37 8.37 6.53 8.37 8.37 8.37 8.37 8.37 8.37 8.37 8.37 8.37 8.37 8.37 6.06 7.77 5.62 5.21 7.21 6.00 6.68 4.75 6.20 5.75 4.95 5.34 4.00 4.75

2.00

0.00 FY16 FY18 FY20 FY22 FY24 FY26 FY28 FY30 FY32 FY34 FY36 FY38 FY40 FY42 FY44 FY46

Constrained Forecast with Deepening Constrained Forecast

Figure 2: Constrained and Unconstrained Traffic Forecast

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1.5.2 Liquid Cargo Forecast

The liquid bulk traffic forecast is made based on the future growth rate at national level and the % share of JNP in the national traffic.

14 Liquid Cargo at JNP (MTPA)

12 12.1 12.3 11.8 12.0 11.6 11.7 11.8 11.7 11.3 11.4 11.5 11.2 11.0 11.1 11.2 10.8 10 10.5 10.7 10.2 10.3

8 35 34 33 32 31 30 29 28 27 26 25 24 23 22 21 20 19 18 17 16 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2034 2033 2032 2031 2030 2029 2028 2027 2026 2025 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 Figure 3: Liquid Cargo Traffic Forecast at JNP Existing BPCL Traffic

1.6 Design Vessel Size

Review of the world‐wide container vessels indicates a huge demand for post‐ panamax size container vessels of 8000‐12000 TEU and 12000‐15000 TEU size, which is driven by the economics of trade derived from operating larger vessels.

The average container vessel size has almost doubled along Asia‐Europe, Asia‐ Middle East and Asia‐South America routes during 2005 and 2015. By 2020, it is anticipated that the average container vessel sizes on Asia‐Europe route would be 16730 TEU and on Asia‐Middle East & Asia‐South America would be 11500 TEU.

Container vessels of 4000‐8000 TEU size with a maximum laden draft of 14.0 m are arriving at JNP. Considering the trends in the evolution of container vessel sizes on the main trade routes, it is anticipated that more 8000‐12500 TEU size vessels will call at JNP. Upon further development of traffic at JNP, vessels of 16000+ TEU will visit.

Table 4: Design Vessel Size

Vessel Size LOA (m) Beam (m) Draft (m) 12500 TEU 366.0 50.0 15.0 16000 TEU 400.0 55.0 16.0

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1.7 Vessel Traffic

The total vessel traffic of JNP and MbP expected in the approach channel by 2029‐ 30 for the unconstrained scenario and constrained scenarios would be about 6157 and 5830, respectively. The ultimate vessel traffic for the unconstrained scenario and constrained scenarios would be about 8130 and 5965, respectively. The year‐ wise total vessel traffic in the approach channel is presented in table below.

Table 5: Year‐wise Total Vessel Traffic in Approach Channel

Year No of Vessels MbP Liquid Cargo Unconstrained Constrained Total ‐ Total ‐JNP Container ‐JNP Container ‐ JNP Unconstrained Constrained 2015‐16 2000 703 2103 2066 4806 4769 2016‐17 2000 742 2159 2159 4901 4901 2017‐18 2000 738 2217 2217 4955 4955 2018‐19 2000 738 2276 2276 5014 5014 2019‐20 2000 777 2337 2337 5114 5114 2020‐21 2000 822 2399 2399 5221 5221 2021‐22 2000 838 2463 2463 5301 5301 2022‐23 2000 856 2528 2528 5384 5384 2023‐24 2000 878 2596 2596 5474 5474 2024‐25 2000 898 2616 2616 5514 5514 2025‐26 2000 924 2714 2768 5638 5692 2026‐27 2000 946 2816 2817 5762 5763 2027‐28 2000 967 2921 2817 5888 5784 2028‐29 2000 989 3031 2817 6020 5806 2029‐30 2000 1013 3144 2817 6157 5830 2030‐31 2000 1027 3262 2817 6289 5844 2031‐32 2000 1056 3384 2817 6440 5873 2032‐33 2000 1084 3511 2817 6595 5901 2033‐34 2000 1117 3615 2817 6732 5934 2034‐35 2000 1148 3722 2817 6870 5965 2035‐36 2000 1148 3833 2817 6981 5965 2036‐37 2000 1148 3946 2817 7094 5965 2037‐38 2000 1148 4063 2817 7211 5965 2038‐39 2000 1148 4184 2817 7332 5965 2039‐40 2000 1148 4308 2817 7456 5965 2040‐41 2000 1148 4435 2817 7583 5965 2041‐42 2000 1148 4567 2817 7715 5965 2042‐43 2000 1148 4702 2817 7850 5965 2043‐44 2000 1148 4840 2817 7988 5965 2044‐45 2000 1148 4982 2817 8130 5965 2045‐46 2000 1148 4982 2817 8130 5965 2046‐47 2000 1148 4982 2817 8130 5965

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1.8 Channel Design and Alternatives

1.8.1 Channel Depth

Four alternatives were considered for determining the channel depth:

Table 6: Alternatives for Channel Depths

Alternative ‐I Alternative ‐II Alternative ‐III Alternative ‐IV Design ship 15 m 16 m 15 m 16 m Static Draft Tidal Window 2.2 m 2.2 m 0.76 m 0.76 m

The channel depths have been calculated making allowances for vertical movement due to waves, squat, sinkage, siltation, tidal window, etc. for each of the alternatives and are given below.

Table 7: Channel Depth for Various Alternatives

Channel Section Channel Depth (m) wrt CD AB BC CD DE EF Alternative I (‐)15.9 (‐)15.7 (‐)14.9 (‐)14.7 (‐)14.7 Alternative II (‐)16.9 (‐)16.7 (‐)15.9 (‐)15.7 (‐)15.7 Alternative III (‐)17.3 (‐)17.1 (‐)16.3 (‐)16.1 (‐)16.1 Alternative IV (‐)18.4 (‐)18.1 (‐)17.4 (‐)17.1 (‐)17.1

1.8.2 Channel Width

Straight Section

Based on the selected allowances for the components of approach channel width, the channel width to be provided is 9*B, where B is the width of design vessel. The estimated channel width for various design vessels is presented below.

Table 8: Width of Approach Channel for Various Design Vessels

Design Vessel Width (in m) Estimated width of the Channel 12500 TEU 50 9 * 50.0 = 450 m 16000 TEU 59 9 * 59.0 = 531 m ~ 530 m

As the possibility of two vessels of 16000 TEU size passing each other is very less, channel width of 450 m is adequate.

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Channel Bends

There are two bends in the section C‐D and one in the section D‐E of the approach channel to Mumbai harbor and JNP. The width of the channel at bends is presented in table below.

Table 9: Design of Bends for Alternative I to Alternative IV

Description Channel Section Bend‐1, C‐D Bend‐2, C‐D Bend‐3, D‐E Curve Angle 35o 29o 27o Existing Radius of the bend (m) 3225 m 1955 m 2175 m Radius proposed at the bend (m) 3225 m 2536 m 2500 Channel Width (m) 450 450 450 Total width of widening (m) 70 100 100 Total Channel Width (m) 520 550 550

1.8.3 Anchorage

The suitability of the existing emergency anchorage to cater to the proposed design vessels is assessed. It is proposed to provide an anchorage area south of JNP Channel near Uran Patch for vessels calling at JNP.

1.8.4 Emergency Anchorage near Karanja

The diameter and depth of the existing emergency are 1160 m and (‐)16.5 m, respectively. The diameter and depth requirements of the emergency anchorage for 12500 TEU and 16000 TEU vessels are presented in tables below.

Table 10: Diameter and Depth of the Emergency Anchorage near Karanja

12500 TEU 16000 TEU Diameter of Emergency Anchorage (m) 1392 1450.8 Depth of Anchorage Area (m CD) (‐) 16.5 (‐) 17.5

Based on the above table, the diameter of the existing emergency anchorage should be extended by 260 m towards east. However, while dredging the emergency anchorage area earlier, rock was encountered at the corners. As anchoring in rock is not advisable, it is proposed not to increase the dimensions of the emergency anchorage. The design vessels can be anchored in the outer anchorage itself.

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1.8.5 JNP Anchorage near Uran Patch

It is proposed to provide an anchorage area of 700 m diameter with a depth of (‐) 11.8 m. This anchorage can cater to 2500‐3000 TEU container vessels.

1.8.6 Shifting of MbP Anchorage

Due to the proposed channel widening, the MbP anchorages adjacent to the approach channel require shifting.

1.8.7 Preferred Alternative

A multi‐criteria matrix analysis was carried out based on cost and operational criteria to select the preferred development alternatives.

Table 11: Multi‐Criteria Analysis of the Channel Design Alternatives

Criteria Weightage Alt‐I Alt‐II Alt‐III Alt‐IV Operational Criteria 50% Width 0.45 3 4 3 4 Depth 0.45 1 2 3 4 Length 0.1 4 3 2 1 Total 2.2 3.0 2.9 3.7 Cost Criteria 50% Soil Dredging Quantity 0.25 4 3 2 1 Rock Dredging Quantity 0.75 4 3 2 1 Total 4 3 2 1 Grand Total 3.1 3 2.5 2.4

Alternative I is the most preferred alternative followed by Alternative II. Alternatives III & IV also entail very high cost owing to all weather two way movements of design vessels and hence were not considered. The proposed dimensions of the approach channel for the selected alternatives are shown in Drawing No. I‐514/JNPT/115.

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1.9 Dredging Volume

1.9.1 Capital Dredging

Capital Dredging for Alternative I

The estimated quantities of capital dredging for Alternative I is 35.03 million cum and details of the same are presented in table below.

Table 12: Estimated Quantity of Capital Dredging: Alternative – I (12500 TEU Vessel and Tidal Window of 2.2 m)

C‐D 7980 ‐14.0 to ‐14.9 0.3 ‐15.2 3.99 0.77 4.76 ‐14.6

D‐E 4365 ‐13.8 to ‐14.7 0.3 ‐15.0 1.92 0.05 1.96 ‐14.9 E‐F 6690 ‐13.1 to ‐14.7 0.3 ‐15.0 5.44 0.90 6.35 ‐15.5 Emergency ‐15 ‐16.5 ‐16.5 0.87 0.00 0.87 Anchorage Area near Karanja JNP ‐6 ‐11.5 0.3 ‐11.8 4.12 ‐ 4.12 Anchorage Area near Uran Patch Shifting of ‐10.5 ‐10.5 1.99 ‐ 1.99 MbP Anchorage Area Total 35490 33.30 1.72 35.03

The maximum vessel size that can navigate through the channel without tide after dredging the channel to the above‐mentioned depths is 6,000 TEU container vessel.

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Capital Dredging for Alternative II

The estimated quantities of capital dredging for Alternative II is 57.70 million cum and details of the same are presented in table below.

Table 13: Estimated Quantity of Capital Dredging: Alternative ‐ II (16000 TEU Vessel and Tidal Window of 2.2 m)

Channel Length of Existing Proposed Design Tolerance Final Proposed Quantity of Dredging Section the level Dredged level (m CD) Dredged level (Million cum) Section (m CD) (m CD) (m CD) Soil Rock Total A‐B 11775 ‐14.2 to ‐16.9 0.3 (‐) 17.2 20.00 ‐ 20.00 ‐15.3 B‐C 4680 ‐14.2 ‐16.7 0.3 (‐) 17.0 6.05 ‐ 6.05 C‐D 7980 ‐14.0 to ‐15.9 0.3 (‐) 16.2 8.49 1.73 10.23 ‐14.6 D‐E 4365 ‐13.8 to ‐15.7 0.3 (‐) 16.0 3.20 0.15 3.35 ‐14.9 E‐F 6690 ‐13.1 to ‐15.7 0.3 (‐) 16.0 8.83 2.27 11.10 ‐15.5 Emergency ‐15 ‐16.5 ‐16.5 0.87 0.00 0.87 Anchorage Area near Karanja JNP ‐6 ‐11.5 0.3 ‐11.8 4.12 ‐ 4.12 Anchorage Area near Uran Patch Shifting of ‐10.5 ‐10.5 1.99 ‐ 1.99 MbP Anchorage Area Total 35490 53.54 4.16 57.70

The maximum vessel size that can navigate through the channel without tide after dredging the channel to the above‐mentioned depths is 8,000 TEU container vessel.

1.9.2 Maintenance Dredging

Maintenance dredging required in the channel due to siltation is assessed as 6.0 million cum, which needs to be ascertained by carrying out model studies.

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1.9.3 Dredged Material Management

Three alternatives can be considered for the management of dredged material as below:

 Confined disposal (Reclamation)

 Beneficial use like brick, paver block etc.

 Off‐shore disposal

Soft clay obtained during dredging cannot be used for reclamation and it is proposed to disposed the same at the existing dumping ground DS‐3. The usage of dredged rock for reclamation involves multiple handling which increases the dredging cost significantly. Disposal of the dredged rock at the dumping grounds can be considered on seeking approval from MOEFCC.

1.9.4 Disposal of Dredged Material

Four sites viz. DS1, DS2, DS3 & DS4 were identified for disposal of dredge material. Each of the dumping sites have an area of about 4 sq.km DS1, DS2, DS3 & DS4 are located at 13 km NW, 5km NW, 8.5 km NW and 7.5 km W, respectively from the approach channel.

It is proposed to dispose the material at DS3. The adequacy of DS3 to cater to entire volume of dredge material disposal needs to be ascertained based on model studies.

1.9.5 Environmental Aspects

Environmental Clearance should be obtained from MOEFCC to carry out dredging of the approach channel. An EIA report comprising of the impact assessment due to the proposed project and Environmental Management Plan shall be submitted to MOEF. EIA report shall be prepared by a NABET accredited EIA consultant for ports & harbours.

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1.10 VTMS and Navigational Aids

1.10.1 Navigational Aids

Two additional channel marker buoys will be required after deepening the channel to cater to 15 m draft vessels. Also the existing buoys needs to be repositioned due to channel widening.

1.10.2 VTMS

The existing VTMS at JNP is adequate and will ensure safe navigation in the channel even with the increase in the vessel traffic.

1.11 Fenders and Bollards

1.11.1 Fenders

As per the study carried out by Howe in 2002, the existing fenders at the container berths are designed for 85 Tm energy and 180 T force. As per IS: 4651 Part IV (1978), the berthing energy required for 12,500 TEU vessels is about 84 Tm, which is within the limits. Thus, the existing fenders are suitable for berthing of 12,500 TEU container vessels. However, as per IS: 4651 Part IV (2014), the berthing energy required for 12,500 TEU vessels is about 120 Tm, which requires replacement of existing fenders.

1.11.2 Bollards

As per the study carried out by Howe in 2002, the existing bollards have a capacity of 125 T. The wind force on bollards during operational conditions is about 104 T which is less than 125 T. The existing bollards are suitable in operational wind conditions. The wind force on bollards for 12,500 TEU vessels during extreme wind conditions is about 151 T, which is 20% more than the bollard capacity. Hence, the larger vessels should not be moored at the berth during storm conditions.

1.12 Capital Costs

The estimated capital cost for dredging the approach channel and emergency anchorages for Alternatives I & II are Rs. 2029 crores and Rs. 4182 crores respectively.

Deepening and Widening of Mumbai Harbour Channel and JN Port Channel (Phase II) 19 Final Detailed Project Report – Executive Summary March 2016

A break‐up of various heads of capital cost estimate is presented in table below.

Table 14: Capital Cost Estimates for Alternatives I & II

S. No. Cost Details Amount (INR in Crores) Alternative‐I Alternative‐II 1. Soil Dredging cost for Channel, Shifting of 588+87 992+87 Emergency Anchorage & MbP Anchorage + Soil Dredging cost for JNP Anchorage 2. Rock Dredging cost for Channel, Shifting of 964+0 2327+0 Emergency Anchorage & MbP Anchorage + Rock Dredging cost for JNP Anchorage 3. Mob / Demob of the Dredging 123 256 4. Idle Time Charges for Dredgers 7 7 5. Procurement of Navigational Aids + VTMS 9 9 6. Consulting Services 6 6 7. JNP Administrative Expenditure 2 2 6. Environmental Management Plan (EMP) 5 5 7. Contingency Cost at 3% 54 111 Total 1845 3802 Add Interest During Construction (10%) 184 380 Grand Total 2029 4182

The costs mentioned above are exclusive of all taxes and duties.

1.13 Project Implementation Schedule

An optimum time frame recommended for carrying out the capital dredging operations for Alternative I and Alternative II is 2 years and 3 years, respectively.

1.14 Financial Analysis

1.14.1 PPP Model

Summary of financial results for PPP Model are presented below.

Table 14: Summary of Financial Results for PPP Model

Measure Results Equity IRR 15.11% Min. DSCR 2.38 Min. ISCR 2.15

Deepening and Widening of Mumbai Harbour Channel and JN Port Channel (Phase II) 20 Final Detailed Project Report – Executive Summary March 2016

The Equity IRR is 15.11%, which makes the project desirable for PPP implementation. However, if there is any downward trend in traffic, the project has challenges in sustaining itself.

1.14.2 Annuity Model

Summary of financial results for Annuity Model are presented below.

Table 16: Summary of Financial Results for Annuity Model

Measure Results Annuity Amount Rs. 655Cr. Equity IRR 14.0% NPV, 12% Rs. 240.56Cr Min. DSCR 1.98

JNPT has to make an annuity payment of Rs. 655 Cr to generate 14% IRR for the developer. Total annuity payment by JNPT over 30 years is Rs. 18,995 Cr.

The total gain to JNPT from revenue collection over 30 years is Rs. 22,844 Cr. Thus the total gain to JNPT over 30 years is Rs. 3,849 Cr.

1.14.3 Development by JNPT

In this case, the project development shall be the responsibility of JNPT only and the entire project development and financial risk is undertaken by JNPT. Summary of financial results for development by JNPT are presented below.

Table 17: Summary of Financial Results for Development by JNPT

Measure Results Post Tax Project IRR 13.78% Post Tax NPV Rs. 347 Cr

The IRR is in the desirable range and project is considered worthy of investment. A sensitivity analysis is carried out for various scenarios and the results of the same are presented below.

Deepening and Widening of Mumbai Harbour Channel and JN Port Channel (Phase II) 21 Final Detailed Project Report – Executive Summary March 2016

Table 18: Results of Sensitivity Analysis

Results Best Case Base Case Worst Case Project IRR 14.93% 13.78% 12.38% Project NPV (Rs. Cr) Rs. 563 Cr Rs. 347 Cr Rs. 73.95 Cr

The IRR touches 14.93% in the best case scenario. The worst case is challenging for the project, even then the project IRR is above the threshold of 12%.

Considering the traffic potential, financial strengths of JNPT and financial return, implementation of project by JNPT is recommended.

1.15 Economic Analysis

The total economic benefits due to channel deepening over 2015‐2045 period is estimated at Rs. 15,186 Crores. A break up of the various economic benefits is presented in table below.

Table 19: Total Economic Benefits

Type Amount (Rs. Cr) Due to savings in Vessel time 6,775 Due to Avoidance of Transshipment 4,287 Due to Income Tax from SPV 2,774 Due to Direct Employment Generation 1,350 Total 15,186

Taking into account the total project cost of Rs. 2029 Crores, the economic benefits of the project is 7.5 times higher. The overall economic rate of return on investment is 21.37%.

1.16 Conclusion

Conclusions of the present study are as follows:

 Considering that infrastructure at JNP will be limited to development of 4th container terminal, container traffic potential at JNP would be 8.37 MTEUsPA with the existing channel dimensions, which would increase to 10.05 MTEUsPA with proposed Phase II channel deepening.

 The total vessel traffic of JNP and MbP expected in the approach channel will increase from 4769 in 2015‐16 to 5830 in 2029‐30.

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 Design vessel recommended for design of Phase II channel is 12500 TEU size container vessel with a draft of 15 m and the infrastructure planning shall be carried out with a design vessel of 12500 TEU.

 The estimated channel width for 12500 TEU design vessel is 450 m.

 The depths required for 12500 TEU design vessel to navigate in various sections of the channel, with a tidal advantage of 2.2 m are as follows.

Channel Section Length (m) Proposed Channel Section Existing Proposed Depth (m) A‐B 9775 11775 ‐15.9 B‐C 4680 4680 ‐15.7 C‐D 7980 7980 ‐14.9 D‐E 4365 4365 ‐14.7 E‐F 6690 6690 ‐14.7 Total 33490 35490

The maximum vessel size that can navigate through the channel without any tidal advantage after dredging the channel to above‐mentioned depths is 6000 TEU container vessel.

 Existing fenders at the container berths in JNP are suitable for berthing of 12,500 TEU vessels as per old codal provisions, but require replacement as per new codal provisions.

 Existing bollards at the container berths in JNP are suitable for mooring of 12,500 TEU vessels in operational conditions. During extreme conditions (storms), wind forces on bollards are more and 12,500 TEU vessels cannot be moored at the berths.

 Considering a dredging tolerance of 0.3 m, the estimated quantities of capital dredging for Phase II channel widening and deepening is 35.03 million cum (33.3 million cum in soil and 1.73 million cum in rock).

 Maintenance dredging required in the channel due to siltation is assessed as 6.0 million cum, which needs to be ascertained by carrying out model studies. It is proposed to dispose the dredge material at DS3.

 The estimated capital cost for proposed Phase II dredging is Rs. 2029 crores.

 An optimum time frame recommended for carrying out the capital dredging operations is 2 years.

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 Soft clay obtained during dredging cannot be used for reclamation and it is proposed to dispose the same at the existing dumping ground DS‐3.

 Usage of dredged rock for reclamation involves multiple handling which increases the dredging cost significantly. Disposal of the dredged rock at the dumping grounds can be considered on seeking approval from MOEFCC.

 Results of financial analysis are as follows:

o PPP Model – The Equity IRR is 15.11%, which makes the project desirable for PPP implementation. However, if there is any downward trend in traffic, the project has challenges in sustaining itself.

o Annuity Model ‐ The annuity payment by JNPT should be Rs. 655 Cr to generate 14.0% IRR for the developer. The total annuity payment by JNPT is 18,995 Cr and total gain to JNPT from revenue collection over 30 years is Rs. 22,844 Cr. Thus the total net gain to JNPT over 30 years is Rs. 3,849 Cr.

o Development by JNPT ‐ For the project to be implemented by JNPT, the Capital Cost of the Project shall be Rs. 2029 Cr. The Post Tax Project IRR is 13.78% & Post Tax NPV is Rs. 374 Cr at 12%.

 There is not much difference in the results of all three financial models. Considering the traffic potential, financial strengths of JNPT and financial return, implementation of project by JNPT is recommended.

 The total economic benefit due to channel deepening over 2015‐2045 period is estimated at Rs. 15,186 Cr., which is 7.5 times higher than project development cost (Rs. 2029 Cr.). The overall economic rate of return on investment is 21.37%.

 The following additional studies shall be carried out:

o Updating the Flow Model and Siltation Studies

o Sediment Dispersion Studies at the Identified Disposal grounds

o Ship Navigation Simulation Studies

o EIA study for seeking approval from MoEF

Deepening and Widening of Mumbai Harbour Channel and JN Port Channel (Phase II) 24 Final Detailed Project Report – Executive Summary March 2016

DRAWINGS