Mechanization of Okha Port

Port, Port Services and Logistics Government of Contents

Project Concept 3 Market Potential 5 Growth Drivers 9 Gujarat – Competitive Advantage 10 Project Information 12 - Location/ Size - Infrastructure Availability/ Connectivity - Manpower - Potential Collaboration / Key Maritime Clusters - Key Players/Stakeholders - Key Considerations Project Financials 18 Approvals & Incentives 19 Key Department Contacts 20

Page 2 Project Concept

Mechanization Imperative to meet Demand

Gujarat with its favourable location and availability of a long coastline is a prime destination for executing maritime economic activities. The increasing importance attached to maritime economic activities has further led to the development of many container terminals.

Constantly increasing volume of global trade and the inflow of economic activities towards and the State have reinforced the need for advanced and efficient infrastructure facilities at the State’s ports. The traffic at Gujarat ports have increased at a brisk rate as compared to the national port traffic in the last decade.

Okha Port: Brief Overview

► Okha port is an all-weather, non-major intermediate port handling dry-bulk cargo, owned and managed by the Gujarat Maritime Board (GMB). ► It is located in the North-West coast of Peninsula, at the mouth of , , Gujarat. Okha Latitude: 22o 27’ 59” N Longitude: 60o 04’ 10” E ► The port primarily imports: coal, coke, wheat, sulphur, fertilizers, lime stone and exports: calcium bauxite, onion, clinker, raw bauxite, chemicals, soda ash.

What is Mechanized Handling?

Efficient handling of dry-bulk cargo through the use of mechanized equipment’s such as ship un- loaders/ loaders, conveyor belts, stackers, reclaimers, wagon loaders & tipplers, which effectively eliminates the conventional and less efficient method of unloading of dry bulk cargo at jetty and from jetty to stacking yard or wagon transported via dumpers.

Impact of Non Mechanization

► Deployment of conventional equipment like Excavator for handling bulk cargo adversely affects efficiency parameters like: Average Ship Turnaround Time Berth Occupancy and Output Cargo Contamination Environmental Issues

Page 3 Project Concept

Mechanization at Okha Port

► Mechanization of the existing facility at Okha Port to improve productivity, take environmental friendly measure and safe cargo handling. ► Till now majority of the cargo is being handled through conventional equipment, which adversely affect efficiency parameters such as average ship turnaround time, berth occupancy and output, and resulted in cargo contamination, pollution and fire hazards. ► Mechanized handling at Okha Port will require the installation of the following equipment at various stages of the cargo handling value chain.

Ship To Barge Stacking Dust Jetty To Truck Barge To Jetty Area Suppression

Floating Mobile Mobile Pipe/ Belt Stacker- Fog Crane Crane Hopper Conveyor Reclaimer Canon

► Apart from this a storage shed, truck and wagon loading systems would also required to be installed at the port.

Page 4 Note: Extent of mechanisation will be dependent on land availability on the backside of jetty Market Potential Port Scenario

Ports in India

► The port sector of India is one of the important and prominent sector as it has coastline spanning about ~7,516.6 km, forming one of the biggest peninsulas in the world. ► Around 70% of India’s trading by value and 95% by volume is done through maritime transport. ► By FY17, cargo capacity of India is expected to increase to 2,493.1 MMT from 1,806.8 MMT in FY15. ► By FY17, cargo traffic at major ports is expected to rise to 943.1 MMT from 581.3 MMT in FY15. By FY17 cargo traffic at non-major ports in India is expected to grow to 815.2 MMT from 471.2 MMT in FY15. ► India is strategically in prime location well connected and benefited by more than 200 ports across the coastline as most cargo ships sails between East Asia, America, Europe, Australia and Africa.

Classification of Ports

Major ports: India has about 12 major ports in the country, 6 on the Eastern coast and 6 on Western coast. Major ports are under jurisdiction of the Government of India. Ports in India

Non-major ports: India has about 200 non-major ports of which one-third are operational. Non-major ports come under the jurisdiction of the respective states. a) Government’s Maritime Boards (GMB) ports, b) Private ports.

Ports in Gujarat

► Gujarat has coastline of 1,615 km, Cargo handled at major and non-major ports th of Gujarat (MMT) about 1/6 of total Indian coastline. 428 440 ► The state has 45 ports of which 44 382 397 are non-major and 1 major port

342 340 313 336 ().

286 310 288 ► During the FY 07-16, cargo traffic in 259

231 Gujarat increased at CAGR of 206 10.17% to reach 440 MMT in FY 16. 100 94 92 83 87 82 ► The cargo traffic at non-major port 80 of Gujarat is envisaged to reach 864 MMT by FY20. FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 ► Share of GMB ports in the national traffic is 32%. Major ports Non-major ports Total

Source: IBEF, GMB, Shipping ministry. *MMT- million metric tonne, FY- financial year, km- kilo meter,

Page 5 Market Potential Demand – Supply

Traffic Handled at Non-Major Ports in Gujarat

Cargo handled at non major port of Gujarat (MMT)

CAGR: 11.2 % 336.0 339.7 310.0 288.0 259.0 231.0 206.0 151.0 153.0 131.0

FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 Source: GMB

► The state has 1 major port and 44 non major ports, totalling to 45 ports. The state has the highest number of operational ports and commercial cargo ports. ► Gujarat is the first state in India to invite Private sector participation through competitive bidding. Gujarat ports account for 40.7% of traffic in the total national port traffic which is more than any other state. The non-major ports of Gujarat constitutes 32% share.

► Gujarat accounts for 74.1% of traffic for non-major ports of India in 2014-15. The traffic handled at non-major port in Gujarat has increased by CAGR 11.2% from FY 07 to FY 16 to reach 339.7 MMT.

Traffic handled at Okha Port (MMT)

5.0 CAGR: 32.7 % 4.5

2.5 1.6 1.7

FY12 FY13 FY14 FY15 FY16 Source: GMB

► Bauxite, Coal and Lime stone comprised large amount of the total import cargo volume handled at Okha port. ► Bauxite comprises large amount of total export cargo handled at Okha port.

► The current cargo handling at Okha port is 5.0 million metric ton per annum.

► The estimated traffic at Okha port in FY 20 is about 9 MMT which can be achieved by mechanization of handling the bulk cargo.

Page 6 Source: IBEF, GMB, Shipping ministry. * MMT- million metric tonne, FY- financial year, km- kilo meter Market Potential Demand – Supply

► The coal imports in India registered more than two fold Coal Imports by India (MMT) rise in last four years 212.1 ► Coal consumption and imports by India are expected to 166.9 witness robust growth rates owing to greater demand 145.8 from thermal power plants and industrial setups.

102.9 ► Numerous proposed and under construction power plants in Gujarat and other adjoining states rely on imported coal to suffice their fuel requirement.

► GMB operated ports handle ~20% of India’s coal imports. FY12 FY13 FY14 FY15 ► Bauxite production in India registered 21666 thousand Source: Ministry of Coal tonnes in FY 13-14, which registered 30% increase as compared to FY 12-13.

► Bauxite mineral from Gujarat has 32% share in total production of Bauxite in India. Rapid growth in imported coal volumes present an attractive business potential of mechanized handling systems at Indian Ports

Okha Port primarily handles Coal and Bauxite

Port Traffic (%) – Commodity wise FY 16 ► At Okha port the major cargo commodity handled are Bauxite 58.17%, Limestone 4.9 20.35%, Coal 16.5% of the total cargo Coal 16.5 traffic handled at port. Lime stone ► The demand of Bauxite is going to increase at the CAGR of 7.63% from 20.4 Coke FY15-20E and coal will increase at 58.2 Others CAGR of 14.71% from FY 15-20E.

Coal Handled at Okha port (MMT) Bauxite Handled at Okha port (MMT) 1.4 3.9 0.8 0.7 2.7 2.9

FY 15 FY 16 FY 20E FY 15 FY 16 FY 20E

Source: IBEF, GMB, Shipping ministry. *MMT- million metric tonne, FY- financial year, km- kilo meter, FY 20E- Estimated

Page 7 Market Potential

The Okha port imports coke, coal, wheat, sulphur, fertilizers, lime 1 stone and exports calcium bauxite, onion, clinker, raw bauxite, Okha port current chemical and soda ash. The port is not mechanized in terms of trends handling the cargo which has adverse effect on the total cargo handling around the year.

To meet the future market scenario for import and export of bulk cargo in Gujarat, the ports should be mechanized for better 2 efficiency in terms of million metric Tonnes of cargo handling in the Need for year, quicker turnaround time of the vessels and with improved mechanization safety and healthy environment.

The location of Okha port is strategically at the mouth of Gulf of 3 Kutch in district Devbhumi Dwarka in Gujarat. It is well connected by Proximity to road and rail network. The port is closer to bauxite mining area Mining Area (~135 km) and in proximity of coal based Thermal power plants in Gujarat.

The mechanization may include but not limited to mobile crane up gradation with high capacity, mobile hopper, conveyor belt, stacker- 4 reclaimer, electrical MCC & control system, dust suppression Installation of Mechanization system, and fire fighting system.

To meet the traffic to be handled at Gujarat Maritime Board ports envisaged in FY 20 and to full fill Gujarat Pollution Control Board 5 (GPCB) norms, the Gujarat Maritime Board has planned to Focus on to meet the Future Needs mechanize its coal handling ports for an environment friendly, safe & secured cargo handling with improved efficiency and better output.

Page 8 Growth Drivers

Location Advantage of Gujarat

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

► 44 non-major 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 40% of national maritime trade in FY15

Robust Future Development of Ports in Gujarat

► Capacity Augmentation: Gujarat’s non-major ports capacity is expected to reach 864 MMTPA by FY20, which would require ~52% of the total capacity augmentation at all non-major ports of India. ► Development of Port Cities and Port based SEZs: (GoG) and GMB have planned to develop port cities and SEZs at Mundra and Pipavav. ► Maritime Cluster and Maritime University to promote positive synergies between participating entities (both port and non-port based), enhance competitiveness and grow the local maritime economy. ► Shipbuilding parks: Gujarat being hub for Shipbuilding in India and with the special incentives declared by GoI for Shipbuilding yards, many shipyards shall set their base in Gujarat.

Page 9 Gujarat - Competitive Advantage

► Gujarat has 45 ports and both Gujarat and constitute 47% of the total national port numbers. ► The total traffic volumes of non-major ports continued their upward trajectory with 45% share in traffic handled at Indian ports in 2014-15. ► Traffic at GMB ports have increased at CAGR of 13% from 2003-04, while for Major ports, the traffic has increased at a CAGR of only 4.9%. ► Contrary to the sluggish pace of economic development during 2014-15 in India and around the world, GMB has achieved a fair increase of 8.5% in the traffic, while the traffic at Major Ports has grown by 4.7 % during the year 2014-15. ► Gujarat ports account for 40.7% of traffic in the total national port traffic – more than any other State. Out of this, the Non- Major ports of Gujarat constitutes 32% Share of GMB in Total Maritime share. • With 336.1 MMT, Gujarat traffic in India accounts for 71.4 % of traffic for non- major ports of India in 2014-15. ► India’s most advanced VTMS unveiled in Traffic at GMB the Gulf of Ports 32% ► The traffic at private ports under GMB has grown at an impressive CAGR of National maritime traffic 24% during past five years 68% excluding GMB Share of GMB in Total Traffic at Non-Major Ports

26% Traffic at GMB ► The major share in Indian bunker market Ports is taken up by located in Traffic at Non- Gujarat. Bunkering is available majorly at Major Ports Mundra and Kandla and to some extent at Bedi, , Rozi, Sikka, Vadinar & 74% Navlakhi.

Source: GMB

Page 10 Gujarat - Competitive Advantage

Flourishing Economy: State contributes 7.2% of the Nation 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.

Gujarat contributes around 17.2 % to the country’s industrial output whereas the value of output registered is about 18.5%.

Ease of Doing Business: Only state which comply 100% with Environmental procedures. Gujarat fares highly when it comes to setting up a business, allotment of land and obtaining a construction permit

Gujarat is the one of the power surplus states in the country as a result it helping in bringing huge amount of investment from the industries and tagged as preferred investment destination in the country

Gujarat contributes around 19.1 per cent to India’s total exports of goods in 2014-15.

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

Geographical advantage due to location on the west coast of India. The state is well connected to the major cities of the world by air and sea routes. The state has 45 operational ports, 12 domestic airports and 1 International airport in addition to an extensive rail and road network.

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

Key Industries: Gujarat is the leader in key industrial sectors such as chemical, petrochemical, auto and its allied sector, pharmaceuticals, engineering, textile, jewellery etc.

'Petro Capital' of India, contributing significantly to the country's production of Petrochemicals (62%), Chemicals (53%) and pharmaceuticals (45%).

Gujarat has World’s Largest grass root petroleum refinery at Jamnagar by Reliance Industries Limited with a crude processing capacity of 1.24 million Barrels Per Stream Day (BPSD)

Page 11 Source: Socio Economic Review of Gujarat 2015-16, DIPP, RBI Project Information Port Details

Site Image

Source: GMB

Page 12 Project Information Port Details

► Anchorage: Anchorage is 2.4 km off shore. Vessel upto 7.5 m draught can be berth at this port. ► Pilotage: Pilotage is compulsory at the port ► Harbour Structure

- Sayaji Pier

Length 180 Meter Width 20.5 Meter Approach 114 Meter 2 Nos. of Vessels at a Time; One on the Eastern and Other on the Berthing Capacity Western Side Draught 8 Meter

- Dry Cargo Berth (DCB)

Length 146 Meter Width 13.72 Meter Approach 216 Meter 2 Nos. of Vessels at a Time; One on the Eastern and Other on the Berthing Capacity Western Side Draught 4 Meter

► New Lighter Wharf : Length : 100 Meter ► Facilities and Equipment's

Tug 2 Nos. 1,600 BHP (Rukmani & Gopnath) Launch 1 No.- M.L. Gomti (Ferry Service Boat) Barges Private Barges are available (No Port Barges) Launch 1 No. Passenger Launch 470 BHP Cranes 1 No. of Mobile Crane with Capacity of 12.5 Tonnes Dredger 1 No. of Grab Dredger Warehousing & Storage Facilities 16 Godowns & Two Open Sheds Stacking Area 50,000 Sq. Meter

Source: GMB

Page 13 Project Information

Utility

Water Power

► Fresh Water is supplied by Private ► The power is supplied by Paschim Barges. Gujarat Vij Company Ltd. (PGVCL) ► Water supply for industry is provided at the yard. by Gujarat Water Supply and ► DG sets installed in yard may be Sewerage Board (GWSSB) used in case of power failure.

Logistics & Connectivity

Rail Road

► Okha is well connected with rest ► Okha is connected by road to of India by broad gauge railway Jamnagar and by State line. Highway 6A and SH-6B. ► Okha is connected to Delhi via ► NH-8E passes through the district of Jamnagar on Western Railway Jamnagar, connecting Somnath – route. Porbandar - Dwarka. NH-8E is 30 Km away at Dwarka.

Air Existing Infrastructure

► ~483 km from international airport ► The port has 2 jetties for which it can at . accommodate total 4 vessels at a time (East and West on both the ► ~175 km from domestic airport at Jamnagar and ~260 km at . jetty). ► The current capacity of cargo ► Airstrip at Mithapur ~10 km away. handling is 5 MMTA. ► Stacking area of 50,000 sq.m. *Source: Socio Economic Review of Gujarat 2015-16, GMB

Page 14 Project Information

Current Handling Process

2 4 6 8 Excavator Dozer Stack Yard Dozer

1 3 5 7 9 Excavator Barge Jetty Truck Truck for Stacking

10 Wagon Loading Area

11 Multiple Handling Excavator Handling in open in all stages Creation of Dust Dusty Area Final Creation of Pollution Destination

Mechanized Handling Process

2 4 6 Final Grab Crane Conveyor Conveyor Destination

1 3 5 7 Stacker Barge Hopper Wagon/ Truck Loading Area Loading

Single Handling No Dust Handling by Closed System No Pollution

Page 15 Source: GMB Project Information

Key Processes to be Mechanized and its Benefits

Equipment's Description Advantage Mobile Harbour Grab Material from Barge and Crane feed to Hopper 1. Speedy Handling 2. No Spillage Hoppers with Dust Received Material from Crane 3. Less Pollution Suppression System and feed to Conveyor 4. Ship Turnaround Time Reduced 5. Less Manpower Closed Type Belt Receive Material from Hopper Conveyor System and transfer to Stack yard. Stacking and Reclaiming of Cargo in Stack Yard and 1. Stacking and Reclaiming can be possible in Stacker/ Reclaimer transfer to Truck/Wagon environment friendly manner. Loading System. 1. Storage of Cargo up to height of 12 to 14 Pre-Engineering Mtr. Storage of Cargo Build Shed 2. Zero effect of Wind hence less Air Pollution. 1. Easy and rapid transfer of cargo from Truck and Wagon Rapid Loading of Truck and Stack Yard to Truck/Wagon. Loading System Wagon 2. Fast evacuation from Stack Yard

Manpower

Floating Crane Handler No. 2

Mobile Hopper Machine Handler No. 2

Conveyor Belt Surveyor No. 1

Stacker & Reclaimer Handling No. 2

Material Handling No. 4

Administrative Staff No. 5

On-shore and Executive Supervisor No. 4

Other staff (Guard & Peon) No. 4

Total 24

Page 16 Project Information

Project Structure & Implementation Model

Port mechanization projects are usually funded through a PPP model, in which private players can charge operating charges per ton of cargo handled. Gujarat Maritime Board (GMB) is contemplating to develop the mechanization project at Okha Port on a stand alone basis.

Possible Collaboration

Key Technology / Machinery Suppliers / Material Handling System Suppliers Murata Machinery Limited Godrej Efacec Automation & Robotics Limited Schaefer Holding International GmbH Voith Turbo GmbH & Co. KG Beumer Group GmbH ABB Crane Systems Elecon Engineering Company Limited Craneports Limited Aegis Eng. Co. Private Limited Konecranes Transflex Conveyors Private Limited Shree Techno Engineers

Port Operations and Management JSW Infrastructure TM International Logistic limited (TMILL) Sical logistics limited Essar Logistic Ltd (ELL) PSTS Logistics Private Limited Elecon EPC Projects Limited Boxco Logistics India Private Limited LD Ports and Logistics

Key Considerations

► The project viability is subject to availability of natural resources vis-à-vis coal and bauxite.

► Key project variables such as demand and supply of the minerals, national and international economic conditions, international trade, Indian exports and imports are subject to variation and change.

► The execution of the project is subject to necessary approvals from regulators.

► The cost for the project is indicative only and based on assumption & benchmarking the project with similar project and subject to change with alteration in any criteria.

► Attractiveness of the Region depends on regional development which includes following parameters: conducive environment for the investors, talent attractiveness for the region, social infrastructure

Page 17 Project Financials

Project Cost

► The total cost for the mechanization of existing jetties is estimated to be ~INR 120 crores, below is a detailed break down of the equipment to be procured.

Metric Total Estimated Cost (INR million)

Mobile Harbour Crane – Two (2) Nos 425.0 Stacker and reclaimer -2 Nos each including 400.0 the belt conveyors Dust Suppression System 30.0 Space Frame Shed 100.0 Rapid Wagon Loading System – One (1) No. 30.0 Static Truck Loading System including Steel 30.0 Structure and Bins – One (1) No. Civil Works 120 Utilities & Others 10.0 Contingencies (5%) 57.0 Total Cost INR ~1,202 million or ~120 crores

Benchmark Financial Data for a Similar Project

Mechanization and expansion of a solid cargo terminal at Dahej port ► In 2014, Adani Petronet (Dahej) Port Private Ltd. (APPPL) proposed Phase III expansion involving mechanization of south berth and facilitating backup storage yards. Below is a broad level breakdown of the key cost components.

APPPL Mechanization and Expansion Cost Estimates % of total cost (INR million, 2014) Civil Works 1,247.5 27% Mechanical Handling System (Equipment) 2,170.2 47% Electrical & IT Work 358.6 8% Utilities & Others 245.6 5% Miscellaneous & Contingency 621.3 13% Total 4,643.2 100%

Page 18 INR 68 = 1 USD Approvals & Incentives

Approvals

Approval from the Board Members of the Gujarat Maritime Board Approval Procedure and approval from the Port & Transport Department, Government of Gujarat.

License for implementation of Mechanized Handling System for License handling and evacuating the cargo.

Additional power can be procured from the existing supplier – Power & Water Paschim Gujarat Vij Company Ltd. (PGVCL). Similarly, water for Connection can be procured from the Gujarat Water Supply and Sewerage Board

CRZ Clearance (Coastal Clearance) needs to be obtained from Environmental Gujarat Coastal Zone Management Authority (GCZMA). Clearance Additionally, pollution clearance from Gujarat Pollution Control Board (GPCB) is also required

Approval to be availed by forwarding a copy of the Performance Performance Standard Standards to the concerned users/ organization bodies

Approval for the upfront tariff for mechanical handling of different Tariff cargoes

Incentives

► GOI has allowed foreign direct investment of up to 100 per cent under the automatic route for projects related to construction and maintenance of ports and harbours; ► Permission granted for formation of joint ventures between Major Ports and foreign ports, Major Ports and Non-Major Ports, and Major Ports and companies; ► Various incentives, such as, ten year tax holiday for enterprises engaged in development of Port sector ► 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. ► Reduced service tax incidence on coastal shipping

Page 19 Ports & Transportation Department, Government of Gujarat

www.pnt.gujarat.gov.in Gujarat Maritime Board www.gmbports.org Industries & Mines Department www.imd-gujarat.gov.in Office of Industries Commissioner www.ic.gujarat.gov.in

Industrial Extension Bureau www.indextb.com Gujarat Infrastructure Development Board www.gidb.org

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, - 382010. Gujarat (India) Phone: +91 79 23238346 +91 79 23238347 Fax: +91 79 23234703 Email: [email protected] www.gmbports.org