Development of Floating restaurant at riverfront

Tourism Government of Contents

Project Concept 3 Market Potential 4 Growth Drivers 5 Gujarat – Competitive Advantage 6 Project Information 8 - Location/ Size - Key Players/ Machinery Suppliers - Infrastructure Availability/ Connectivity - Raw Material/ Manpower - Key Considerations Project Financials 13 Approvals & Incentives 14 Key Department Contacts 15

Page 2 Project Concept

About riverside floating restaurant

A riverside restaurant or a floating restaurant is usually a restaurant built on a large flat steel barge floating on water. Some times retired ships are also refurbished and given a second term as a floating restaurant. Some of the floating restaurants in India are- 1. Majastique-1 operated by Majas Travels, Tours and Logistics at Kochi 2. Flor Do Mar operated at Morjim Beach, Goa A revolving restaurant or rotating restaurant on the other hand is usually a tower based restaurant eating space designed to rest on the top of a wide spherical rotating base that operates as a large turning table. The building remains stationary and the diners are seated on the revolving floor with all the other basic restaurant features in place. The main aim of such restaurant is to provide a scenic view to its diners from a height. About Sabarmati riverfront

Sabarmati river has been an essential component in of daily life in since when the city was established in 1411 along the river side. Apart from being an essential source of water, it provides a view of cultural activities and historic significance of various events. During the dry seasons, the fertile river side became a good farming land. In modern times, it also offered meeting spot for different informal economic activities and markets. In the due coarse of time, the intensive usage of the riverside took its toll on the beauty of the river front. The Ahmedabad Municipal Corporation (AMC) formed Sabarmati Riverfront Development Corporation Ltd (SRFDCL) in May 1997 funded by with an estimated capital of INR 12 billion for riverfront development. Environmental Planning Collaborative (EPC) prepared the feasibility report in 1998. In 2003, the project was planned to cover a 11.25 km stretch of the riverfront and reclamation of 202.79 hectares (501.1 acres) and was put on fast track. Construction on ground started in 2005 and majority of the planned infrastructure was completed by 2012 and was opened to Public the same year. Page 3 Market Potential

Indian Restaurant Industry Overview

Restaurant Industry composition 2015

3% 32% 45% 12% 7%

Fine Dining Casual Dining Quick services restraurants Cafes Others

Quick Service Restaurants (QSR) and casual dining are the two most popular formats that form 45% and 32% of the overall market respectively.

Favourite outdoor activity Restaurant market in India is mostly led by unorganised segment in 2015 and even though in the future it will decline significantly over the next 4-5 years, it is likely to remain 10% 18% more than 60% of the market.

The Indian economy is expected to add 25% another trillion USD to its GDP in next 5-6 years, ensuring per capita CAGR of 12% from 2015 to 2020. As a result income growth 39% 8% would lead to a rise in the number of middle class customers.

High expenditure on food and related items Eating out Hangout with friends coupled with the large portion of the Goingout with family None population being a part of the target market, Others the growth of this sector is expected to be high. Indian Restaurant Industry Overview

Indian Industry grew 11%from 2013 to 2014 Restaurant Industry size in India to reach USD 151.6 billion in 2014. (in billion) Full-service restaurants registered a slowdown in growth due to changing taxation structure in 2015. 151.6 136.6 Age profile of the people eating out 123.0 92.1 18 to 20 years – 18% 70.5 21 t 30 years – 40%

31 to 40 years – 31%

Above 40 years – 11% FY10 FY11 FY12 FY13 FY14

Page 4 Growth Drivers

Rise in foreign tourist arrivals (FTAs) and tourist movement within the country has driven growth in the hospitality industry. The number of FTAs reached 7.4 million in 2014, up 27.6% from 2010.

Increase in India is known as a destination for spiritual tourism and also offers tourist cruises, adventure, medical, wellness, sports, film, rural and religious movement tourism. Travel and tourism is the third largest forex earner for India, which contributed US$19.7 billion in 2014.

These factors ensure sufficient potential customers for floating restaurant.

Campaigns such as Khushboo Gujarat Ki, Incredible India, Athithi Devo Bhava launched to attract tourists from locations outside Gujarat.

FDI under the automatic route in tourism and hospitality is allowed up Policy support to 100%, subject to applicable regulations and laws. Capital subsidy programme for budget restaurants.

Exemption of Fringe Benefit Tax on crèches, employee sports and guest house facilities would enable lower operative costs.

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

Online and mobile based booking is picking up in restaurant industry Apps for web with the emergence of companies such as Swiggy, Zomato operating and mobile in Ahmedabad and other major cities as well. These apps will help in based booking attracting young audience.

The state is one of the least corrupted in the country with an anti- Apps for web corruption index of 0.69. and mobile Gujarat leads in project clearance in coastal areas with a success rate based booking of 93%.

There are sites that compare the results from all these sites to provide Growing cheapest table booking options to the customers. These aggregators aggregators sites helps customers in comparing services of various restaurants. Examples are Zomato, Tripadvisor etc.

Page 5 Gujarat - Competitive Advantage Gujarat tourism industry

CAGR: CAGR: 615 11 8.0% 12.5% 465 9 316 6 198 4

2011 2015 E 2020E 2025E 2011 2015 E 2020E 2025E

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

As per HVS State Ranking Survey 2015 of Hospitality Industry, Gujarat stands fifth among the Indian states, scoring high in the ease of doing business, Gross State Domestic Product (GSDP) per capita and intangible parameters

In FY16, maximum number of tourist (73.6%) visiting Gujarat where from within the state i.e Gujarat origin.

In FY16, 44% of the total Tourist visiting Gujarat fall under the economic category whereas 20% each was shared by medium class and Luxury class tourist. The gross tourist flow in Gujarat reached 38.3 million in FY16, growing at a CAGR of 14.1% Gross tourist arrivals in Gujarat over the period FY11-FY16 FY16 (in million) Ahmedabad, Ambaji, Dwarka, and accounted for ~42% of gross tourist 38.3 flow to Gujarat in FY16 32.7 25.4 28.8 19.8 22.4 Tourist flow to Gujarat in FY16 was driven by business purpose (56%), followed by religion (35%), leisure (7%) and other purpose (2%) FY11 FY12 FY13 FY14 FY15 FY16 Tourist flow to Gujarat – Origin Tourist flow to Gujarat – Class (FY16) (FY16) 1.9% 16% 24.5%

44% 20% 73.6% 20%

Within Gujarat Other Indian states Foreign Economy Luxury Medium High

Page 6 Domestic Tourists (in million) International Tourists (in million) Gujarat - Competitive Advantage

Tourist flow to Ahmedabad

Tourists (in million) Destination wise tourist destination

17% CAGR: 29% 33% 54,65,433 45,99,488 16% 32,46,987

28%

2012-13 2013-14 2014-15 Within Gujarat Other Indian state NRI Foreigners Tourist purpose 2015-16

94% 2% 1% 3%

Business Leisure Spiritual Others

Overall Ahmedabad has seen a tremendous growth in tourist arrival, majority of the incoming tourists are Foreigners and reason of visit for most of them is Business purpose.

India has received ~US$6.70 billion worth of Foreign Direct Investment (FDI) during the period April 2000-December 2015 in food serving related sectors. The Confederation of Indian Industry (CII) estimates that the food processing and related sectors have the potential to attract as much as US$33 billion of investments over the next 10 years and also generate employment of nine million person-days.

Page 7 Project Information

Sabarmati Riverfront Master Plan

Sabarmati Riverfront project represents an opportunity to create a common platform for business as well as leisure activities at the edge of the river on the eastern and western sides of Ahmedabad. By bordering the river to a persistent width of 263m, riverbed land has been reclaimed to create a 11.25 kms of public riverfront on both sides of the banks. The total land area reclaimed is 202.79 hectares.

East Promenade – 11.3 km On Boarding and Off West Promenade – 11.2 km boarding services

Park – 15 ha Enquiry counter and reception center Plaza – 2 ha

Medical assistance and Parking space Security measures

The governing body and grievance redressal body is Front Development Corporation Ltd..

Its office is located in the riverfront, near .

Page 8 Project Information

Value chain for floating restaurant

Trained Staff

Marketing (Promotion & Advertising)

Service

Exclusive dinner set & equipment

Quality Ingredients

Location & interior design

Quality of food

Suggested dining options and features

1.Indoor Dining 2.Outdoor Dining 3.Sunset Dining

4.Corporate events 5.Wedding arrangements 6.Rooftop Bar

Page 9 Project Information

Responsibilities sharing matrix

Gujarat Tourism SRFDCL or Private Operator private player

Terminal development On board and Off Floating Restaurant – and O&M board services Deployment and O&M

Other basic Marketing and infrastructure Promotion

Major Restaurant chains in Ahmedabad

Name of Restaurant Cuisine Location

Swati snacks Indian, Fast food, Ellisbridge, Vegetarian Ahmedabad

Barbeque Nation Indian, Barbecue, Asian, 1. Prahlad Nagar Vegetarian 2. Drive –In - road Agashiye Indian, Asian, Vegetarian Laldarwaja, friendly Ahmedabad Vishala Indian, Vegetarian Ambawadi, friendly Ahmedabad Atithi Indian, Vegetarian Bodakdev, friendly Ahmedabad New FreezeLand Fast food, Vegetarian Gurukul, Ahmedabad Friendly, Italian, Mexican, Indian, Gluten Free Options Rajwadu Indian, Vegetarian Vejalpur, Ahmedabad Friendly, Gluten Free Options Gordhan Thal Indian, Asian, Vegetarian Bodakdev, Friendly Ahmedabad

Page 10 Infrastructure Availability Logistics & Connectivity

Rail Road

Ahmedabad is connected via rail broad Ahmedabad is connected to Delhi Mumbai gauge to Delhi and Mumbai Industrial Corridor (DMIC) The Government is developing a It also has a very good connectivity with Ahmedabad–Vadodara rail link, a metro other cities of the state such as Vadodara project for Ahmedabad and (182 km) and Surat (278 km) and a high-speed passenger corridor The Bus Rapid Transport System (BRTS) from Ahmedabad to Mumbai . is being implemented in Ahmedabad jointly The government plans to connect by the state government, Gujarat Ahmedabad with Kalol-Kadi, Sanand- Infrastructure Development Board (GIDB) Viramgam-Katosan Road, -Prantij and Ahmedabad Urban Development and Barejadi-Mehmdabad with railways Authority (AUDA)

Air Port

Ahmedabad has an international airport, Gujarat has one of the strongest port which handled 59.3 million tons of freight infrastructures in India. It is the first state in in FY15 India to take up port privatization

A new international airport at Dholera is Ahmedabad is connected to several leading under development which is expected to sea ports such as Dahej, Kandala, become operational by 2018 and Nhava Sheva sea port Ahmedabad is also closer to domestic Most of the sea ports are within 300 km airports such as Surat and Vadodara from Ahmedabad Utility

Water Power

Ahmedabad Municipal Corporation (AMC) The power sector is privatized in has implemented a number of projects Ahmedabad related to water supply and sewerage Electricity in Ahmedabad is generated systems and distributed by Torrent Power Limited

Some of the initiatives taken by AMC are Kotarpur water treatment plant, Raska project and Jaspur water treatment plant Source: IBEF Refer to speaker notes section for further details Page 11 Project Information

Potential Collaboration Opportunities

Institute of Hotel Management Ahmedabad Asia Pacific Institute, Ahmedabad DIMS Institute of Hotel Management, Ahmedabad Gujarat Institute of Hotel Management, Vadodara Jindal School of Hotel Management, Vadodara Anand Institute of Management Science, Anand CZ Patel College of Business Management, Anand Lords Institute of Management, Surat Vivekananda Institute of Hotel and Tourism,

Key considerations

Licenses and Permits – In order to operate restaurant many licenses and permits may be required for activities like food handling, liquor catering etc. In order to obtain permits the management will have to approach the local governing bodies like Ahmedabad Municipal Corporation and other state governed bodies. If the restaurant operator is a starting entity it has to get itself registered with central government governed bodies as well.

Health and Safety – As the restaurants are the places where people dine, such places are subjected to significant regulations and other similar frameworks. Apart from operating restaurant and self monitoring quality of food as well as ingredients used, one has to be ready for impromptu quality checks by Food Safety and Standards Authority of India (FSSAI) and other local monitoring bodies.

Presence of medical assistance – In order to ensure assistance to any medical emergency on board, management must have 2 persons who can provide medical assistance.

Floating deck/Barge regulation - All barges and floating vessels must be designed and operated in compliance with strict requirements of international law and follow a number of established rules and regulations to protect everyone on board. It should also follow regulations of Merchant Shipping Act, 1958 and the guidelines issued by Gujarat Maritime Board (GMB).

Page 12 Project Financials

The cost of project is calculated as sum of operating cost of a single floating restaurant (capacity 75 passengers) and cost of constructing a land based terminal.

Capital Cost of project Project components & specifications Cost (INR crore) Cost of building a floating restaurant 12 (Capacity – 75 passengers) Marketing expenses 0.1

Support Infrastructure and safety equipment 0.9

Pre-operative expenses 0.6 Contingencies 0.24 Cost of machinery (pumps, cables, hooks etc.) 0.1

Margin money for working capital 10 Total project cost (a) 23.9 Cost of building a cruise terminal Project components & specifications Cost (INR crore) Development of riverfront berth and jetty 0.6

On board and off board yacht 0.4

Salaries and other expenses 0.6

Total project cost (b) 1.6

The total cost of project is estimated at (a) + (b) = 25.5 crores

The cost of project comes down by 19.6% to 20.5 crores, if we use a refurbished 2nd hand floating restaurant.

Page 13 Approvals and Incentives

Approvals Required

Registration at Sabarmati River Front Development Corporation Ltd. (SRFDCL) Office and Ahmedabad Municipal Corporation.

Allotment of plot from SRFDCL and AMC.

‘No Objection Certificate’ from the Gujarat Pollution Control Board

Environmental Clearance (EC) from Ministry of Environment and Forest (MOEF)

Registration with Food Safety and Standards Authority of India (FSSAI)

Incentives by

Provides power tariff subsidy at the rate of INR one per unit in the billed amount of the utility as promotional incentive on reimbursement basis for a period of five years with effect from the commencement of commercial production/ rendering services.

Provides assistance at the rate of 50% of fee paid, subject to maximum of INR 10 thousand per employee on obtaining industry recognized skill certifications from recognized institutions.

Assistance to eligible tourism units up to 75% of the cost of carrying out Energy Audit by a recognized institution/consultant, Water Harvesting / Conservation and Environment-friendly practices like Green Buildings, Solar and other Renewable Energy measures.

Incentives to tourist attractions- • 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.

Incentives by Government of India

Some of the major initiatives taken by the Government of India (GoI) to improve the food processing sector in India are as follows:

Union Budget 2016-17 has proposed 100% FDI through FIPB (Foreign Investment Promotion Board) route in marketing of food products produced and manufactured in India.

The Food Safety and Standards Authority of India (FSSAI) has issued new rules for importing products, to address concerns over the entry of sub-standard items and simplify the process by setting shelf-life norms and relaxing labelling guidelines.

NABARD Loan for Food Processing Industry: In the 2015 Budget, the Finance Minister had announced the setting up of an INR2000 crore fund in NABARD for providing loans to entrepreneurs setting up food processing businesses in designated food parks.

Page 14 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, , Ahmedabad, Tel: +79 26578044/46/26589172 Fax: +79 26582183 E-mail: [email protected]