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(Private & Confidential)
Detailed Project Report for the Development of Thankassery (Kollam) Port
Final Report
Submitted to
The Directorate of Ports, Government of Kerala
Submitted by
Deloitte Touche Tohmatsu India Pvt. Ltd.
October 2010
Page 2 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
List of Abbreviations
ACC The Associated Cement Companies Limited
APEDA The Agricultural and Processed Food Products Export Development Authority
APPROX Approximately
AVT A V Thomas
BPCL Bharat Petroleum Corporation Limited
C Celsius
CAGR Compounded Annual Growth Rate
CCHAA Cochin Custom House Agents Association
CCoCI The Cochin Chamber of Commerce & Industry
CED Centre for Environment and Development
CEPC Cashew Export Promotion Council
CEPZ Cochin Export Processing Zone
CFS Container Freight Station
CHA Custom House Agents
CIAL Cochin International Airport Ltd
CII Confederation of Indian Industry
CNSL Cashew nut shell liquid
CRZ Coastal Regulation Zone
DoP Directorate of Ports
DPR Detailed Project Report
DSCR Debt Service Coverage Ratio
DTTIPL Deloitte Touche Tohmatsu India Pvt. Ltd.
DWT Deadweight tonnage
EDI Electronic Data Interchange
EIA Environmental Impact Assessment
EICL English Indian Clays Ltd
EMP Environment Management Plan
EXIM Export / Import
FACT The Fertilisers and Chemicals Travancore Limited
FEU Forty-foot equivalent unit
FT Feet
GDP Gross Domestic Product
GoK Government of Kerala
GPS Global Positioning System
GRT Gross Registered Tonnage
H0 Null Hypothesis
HDI Human Development Index
Page 3 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
HUF Hindu Undivided Family
ICD Inland Container Depot
ICT International Container Terminal
INR Indian Rupees
IPA Indian Ports Association
ISPS International Ship and Port Facility Security Code
KG Kilogram
KM Kilometer
KMML Kerala Minerals & Metals Ltd
KSIDC Kerala State Industrial Development Corporation
KV Kilovolt
KWA Kerala Water Authority
LCL Less than container load
LPCD Litres per capita per day
LTD Limited
M Meters
MAX Maximum
MLHW Mean Low High Water
MLLW Mean Low Low water
MHHW Mean High High Water
MHLW Mean High Low Water
MSL Mean Sea Level
MM Millimeters
MMTG Act Multimodal Transportation of Goods Act
MoP Muriate of Potash
MPEDA The Marine Products Export Development Authority
MSL Mean Sea Level
MT Metric Tons
MV Mother Vessel
MW Megawatt
NA Not Applicable
NCR National Capital Region
NH National Highway
NOS. Numbers
NOx Oxides of Nitrogen
NPV Net Present Value
NW National Waterway
NW-SE North West – South East
O-D Origin-Destination
OECD Organization for Economic Co-operation and Development
Page 4 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
P Probability
P.A. Per Annum
PABX Private Automatic Branch Exchange
PESTLE Political, Economic, Social, Technological, Legal, Ecological
PPP Public Private Partnership
QTY Quantity
R.M Raw Materials
RFID Radio frequency identification
RfP Request for Proposal
SEZ Special Economic Zone
SO2 Sulphur dioxide
SPC Special Purpose Company
SPM Suspended Particulate Matter
SQ. MTS Square meters
SWOT Strengths, Weaknesses, Opportunities, Threats
T&C Textile and Clothing
TEU Twenty-foot equivalent unit
THC Terminal Handling Charges
TTPL Travancore Titanium Products Ltd
UOM Unit of Measurement
US$ US Dollar
VKUY Vishesh Krishi Upaj Yojana
WLL Wireless local loop
WMS Warehouse Management System
Y-O-Y Year on year
Page 5 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Contents Executive Summary ................................................................................................................. 9
1. Introduction ......................................................................................................................14
1.1 Project background & rationale .......................................................................................14
1.2 Structure of the Report ...................................................................................................15
2. Overview of business landscape ....................................................................................17
2.1 PESTLE analysis ...........................................................................................................17
2.2 SWOT Analysis ............................................................................................................20
3. Traffic assessment ..........................................................................................................22
3.1 Approach to the traffic study ...........................................................................................22
3.2 Hinterland mapping .......................................................................................................22
3.3 Primary hinterland analysis .............................................................................................25
3.4 Indicative traffic of the primary hinterland and potential open cargo ....................................26
3.5 Total potential open cargo for Thankassery port from primary hinterland .............................32
3.6 Secondary hinterland analysis .........................................................................................33
3.7 Open cargo from primary and secondary hinterland ...........................................................37
3.8 Indicative traffic projections. ..........................................................................................38
4. Site investigations ...........................................................................................................50
4.1 Geographical setting ......................................................................................................50
4.2 Land ............................................................................................................................51
4.3 Connectivity .................................................................................................................51
4.4 Topography ..................................................................................................................53
4.5 Bathymetry ...................................................................................................................54
4.6 Geo technical conditions ................................................................................................54
4.7 Tide and wave data ........................................................................................................54
4.8 Environmental data ........................................................................................................55
4.9 Utilities ........................................................................................................................59
5. Port planning ....................................................................................................................61
5.1 Introduction ..................................................................................................................61
5.2 History of the port operations ..........................................................................................61
5.3 Existing Port Facilities ...................................................................................................62
5.4 Planning methodology ...................................................................................................62
5.5 Strategy for project planning ...........................................................................................63
5.6 Port layout ....................................................................................................................63
Page 6 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
5.7 Port facility requirements ...............................................................................................65
5.8 Planning criteria ............................................................................................................66
5.9 Planning consideration ...................................................................................................67
5.10 Navigational aids ...........................................................................................................67
5.11 Cargo handling equipment ..............................................................................................67
5.12 Land requirements .........................................................................................................67
5.13 Constrains in port operations ..........................................................................................67
6. Cost estimates .................................................................................................................70
6.1 Capital cost estimation ...................................................................................................70
7. Determination of tariffs ....................................................................................................75
7.1 Overview of port tariffs ..................................................................................................75
7.2 Tariff determination .......................................................................................................76
8. Financial analysis ............................................................................................................78
8.1 Introduction ..................................................................................................................78
8.2 Identification of revenue streams .....................................................................................78
8.3 Assumptions of investment and expenditure .....................................................................79
8.4 Financial projections ......................................................................................................83
9. Way forward .....................................................................................................................85
Annexure 1 : Stakeholders contacted for the traffic survey ........................................................87
Annexure 2 : Statistical analysis of data for expected traffic at Thankassery port ......................92
Annexure 3 : Growth rate taken for the various commodities .................................................. 101
Annexure 4 : Traffic projections for various commodities ........................................................ 104
Annexure 5 : Route of roads, canal and railway line near Port area ........................................ 120
Annexure 6 : Topography and contour map – port area .......................................................... 121
Annexure 7 : Bathymetric chart ............................................................................................... 122
Annexure 8 : Borehole tests results ......................................................................................... 123
Annexure 9 : Rapid Environmental Impact Assessment .......................................................... 124
Annexure 10 : Port development layout .................................................................................. 125
Annexure 11 : Financial projections ........................................................................................ 126
Annexure 12 : Queries received from DoP on the draft final report submitted ......................... 127
Annexure 13 : Clarifications submitted in the draft final report ................................................. 128
Caveats................................................................................................................................... 157
Page 7 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
List of Tables Table 1: Regions in the primary and secondary hinterland ................................................................23
Table 2: Cargo profile of the primary and secondary hinterland ........................................................24
Table 3: Indicative road distances between the identified primary cargo belts and gateway ports ........25
Table 4: Potential open cargo from Kollam district ..........................................................................27
Table 5 : Potential open cargo from Thiruvanthapuram District ........................................................28
Table 6 : Potential open cargo from Idukki District ..........................................................................28
Table 7 : Potential open rubber based cargo from Kottayam district ..................................................29
Table 8: Indicative road distances between the identified secondary cargo belts and gateway ports .....33
Table 9: Export commodities from Tamil Nadu hinterland ................................................................34
Table 10: Potential open cargo from Tamil Nadu hinterland .............................................................36
Table 11: Total open cargo from primary and secondary hinterland ..................................................38
Table 12: Consolidated traffic growth in tonnes ( Low growth scenario) .............................................40
Table 13: Containerised traffic growth in TEUs (Low growth scenario) ...............................................41
Table 14: Consolidated traffic growth in tonnes (medium growth scenario) .......................................42
Table 15: Containerised traffic growth in TEUs (medium growth scenario) .........................................43
Table 16: Consolidated traffic growth in tonnes (high growth scenario) .............................................44
Table 17: Containerised traffic growth in TEUs (high growth scenario) ...............................................45
Table 18: Comparative cost of exporting One TEU from Kollam to Cochin port by Road vis-a-vis though the proposed Thankassery (Kollam) cargo terminal .........................................................................47
Table 19: Comparative cost of exporting One TEU from Trivandrum to Cochin port by Road vis-a-vis though the proposed Thankassery (Kollam) cargo terminal ..............................................................48
Table 20: Comparative cost of exporting One TEU from Trivandrum to Cochin port by Road vis-a-vis though the proposed Thankassery (Kollam) ....................................................................................49
Table 21: Project activities and its impacts .....................................................................................59
Table 22: Sub-station network in Kollam district ..............................................................................60
Table 23: Project cost incurred under Fisheries Department .............................................................70
Table 24: Project cost incurred under ASIDE scheme of Ministry of Commerce & Industry ...................71
Table 25: Project cost incurred under State Government (Port sector) ...............................................71
Table 26: Project cost incurred Tsunami rehabilitation programme under port sector .........................72
Table 27: Summary of the project cost incurred by the State Government of Kerala............................72
Table 28: Additional project cost envisaged for development of Thankassery port ..............................74
Table 29: Vessel related charges....................................................................................................75
Table 30: Cargo related charges ....................................................................................................75
Table 31: Cargo related component charges ...................................................................................76
Table 32: Tariff for container vessels ..............................................................................................76
Table 33: Tariff for bulk coastal vessels ..........................................................................................77
Table 34: Projected traffic for financial modeling ............................................................................78
Table 35: Summary of phase wise investment details ......................................................................79
Table 36: Debt / financing options .................................................................................................80
Table 37: Operation and maintenance percentage ..........................................................................81
Table 38: Waterfront royalty to GoK ..............................................................................................81
Table 39: Port related assumptions ...............................................................................................82
Table 40: Depreciation rates for various assets ...............................................................................82
Table 41: Tax rates .......................................................................................................................83
Page 8 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Table 42: Projected Gross Revenues ..............................................................................................83
Table 43: EBITDA .........................................................................................................................83
Table 44: Financial feasibility indicators .........................................................................................84
Table 45: Minimum draft recorded across the various stretches of the NW-3 ................................... 137
Table 46: Rail connectivity cost details ......................................................................................... 142
Table 47: Approach road cost estimates ....................................................................................... 143
Table 48: Revised traffic projections in tonnes .............................................................................. 144
Table 49: Traffic projections in tonnes as indicated in the draft DFR ................................................ 144
Table 50: Additional cost to be incurred for berthing of 20,000 DWT vessels. ................................... 145
List of Figures Figure 1 : SWOT analysis of Thankassery port ............................................................................................ 21 Figure 2 : Indicative primary hinterland for Thankassery Port ................................................................... 23 Figure 3 : Indicative secondary hinterland for Thankassery Port .............................................................. 23 Figure 4 : Overview of the Kollam Port area ............................................................................................... 50 Figure 5 : Kollam district road network ...................................................................................................... 51 Figure 6 : Kollam district road network ...................................................................................................... 52 Figure 7 : The existing water canal and rail line near Thankassery port ..................................................... 53 Figure 8 : Loading / Unloading operations for MV Anakuri ........................................................................ 61 Figure 9 : Indicative port planning layout ................................................................................................... 65 Figure 10 : Import trends of country’s raw cashew nuts .......................................................................... 104 Figure 11 : Import trends of raw cashew nuts through Cochin Port ........................................................ 104 Figure 12 : Export trends of country’s cashew kernels ............................................................................. 105 Figure 13 : Export trends of raw cashew nuts through Cochin Port ......................................................... 105 Figure 14 : Export trends of country’s marine food .................................................................................. 106 Figure 15 : Export trends of marine food through Cochin Port ................................................................ 106 Figure 16 : Production trends of pepper in Idukki district ........................................................................ 109 Figure 17 : Exports trends of natural rubber ( Kerala vis-à-vis India) ....................................................... 111 Figure 18 : Exports trends of Cashew Nut Shell Liquid ( Kerala vis-à-vis India) ........................................ 113 Figure 19 : Import trends of timber in the districts of Kanyakumari, Thiruneveli, Virudhunagar, Tuticorin and Madurai .............................................................................................................................................. 117 Figure 20 : West coast canal map ............................................................................................................. 135 Figure 21 : Cargo movement trends on the West Coast Canal ................................................................. 136 Figure 22 : Overview map of Kollam to Kayamkulam area ....................................................................... 137 Figure 23 : Proposed rail alignment from existing rail head to Thankassery port .................................... 140
Page 9 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Executive Summary The Directorate of Ports, Government of Kerala entrusted to the consultants the task of preparation of
the detailed project report (DPR) for development of Thankassery port as per the scope of work
mentioned in section 1.1.
The Consultant subsequently undertook
detailed traffic study ,
review of the technical studies earlier undertaken
environmental studies,
detailed topography and route profiling,
Port planning and phasing of the project based on the traffic flow and site conditions
Financial feasibility
Based on the above activities, a suitable business model has been proposed for the Thankassery port
development as spelt out in the subsequent sections of this document.
Traffic projections
The state government has constructed a wharf in Thankassery in November 2006. However the existing
facility has not witnessed significant traffic apart from coastal movement of sand and the occasional
movement of construction material to Male.
To firm up the type of infrastructure that would be required, its phasing, capacity and supporting
facilities, to be established at Thankassery port, an understanding of the cargo movement from the
identified hinterland was essential. Hence a comprehensive primary survey covering the hinterland of
both the states of Kerala and Tamil Nadu was undertaken covering cumulatively a respondent sample
size of more than 150 numbers. The respondents included all the relevant stakeholders in the exports,
shipping and logistics sector covering customs house agents, commodity boards, trade associations,
regional export promotion trade bodies, commodity export promotion body, major industries, customs
officials, district industries centre, inland container depots, and container freight stations.
The likely open cargo that would flow through the port of Thankassery has been considered based on
the following:
• Assessment of the EXIM commodities in the identified hinterland Topography and connectivity
issues that may impede / hasten the cargo flow through Thankassery port.
• Distance of the cargo belts to Thankassery port vis-à-vis the other existing and upcoming ports in
the region.
• Acceptability of the relevant stakeholders ( shippers) on diverting their cargo to Thankassery port.
Page 10 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
• The indicative cost savings.
• Identification of such open cargo in terms of commodities and their indicative quantum.
• Forecasting of cargo growth and traffic based on the commodity profiles and growth potential for
EXIM trade / coastal shipping that reflects the above ground realities.
A detailed commodity profiling was undertaken and was categorized into containers and bulk / break-
bulk cargo. The above commodity categorization included both overseas and coastal movement.
Subsequently, three different alternatives were developed for traffic forecasting with each one of them
having low, medium and high case scenarios. The summary of cargo projected is furnished in the below:
Total traffic (both bulk and containerized) in '000 Tonnes
2015 2020 2025 2030 2035 2040
Low 2,024 2,215 2,445 2,695 2,966 3,275
Medium 2,207 2,718 3,388 4,255 5,343 6,806
High 2,306 3,073 4,140 5,596 7,505 10,281
Only containerized traffic in TEUs
2015 2020 2025 2030 2035 2040
Low 37,122 40,429 44,992 50,298 56,548 63,773
Medium 43,568 51,863 62,907 77,173 95,364 118,300
High 44,332 55,879 70,574 89,208 115,293 149,651
Based on the detailed analysis of the macro and micro economic scenarios, the medium growth scenario
has been decided as the base case for cargo. The entire port planning and the subsequent financial
modelling has been undertaken considering the medium growth scenario of traffic.
Port Planning
In a typical PPP port related project, the private developer is required to invest a substantial amount of
time and resources in establishing the infrastructure for commencing port operations, while the
government provides the waterfront and other hand holding related support. In this aspect, the port of
Thankassery is very much unique, since the State Government has already established facilities at the
port.
This would provide the private developer a ready-made infrastructure set-up which would facilitate him
to commence commercial operations from Day 1. Accordingly the envisaged port planning focuses on
the optimum utilization of the existing facilities to its full capacity. It is only when the capacity of the
existing facilities is fully utilized that the private developer would be required to plan and install
additional infrastructure for catering to the cargo traffic.
Accordingly the port planning exercise had been divided into the following phases -
Phase 1 – The planning objective of the referred phase would be to utilize the existing facilities to its
full capacity. In this regards, the private developer would be required to augment the existing
infrastructure by:
Providing mechanical material handling equipment / cranes etc
Page 11 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Strengthening existing facilities
Facilitating connectivity ( with active support of the state government)
Improving the storage requirements
Managing the port operations
The installed capacity of wharf with the above strengthening would be around 3.60 million tonnes
per annum and actual capacity utilized would be 2.70 million tonnes per annum with operating
efficiency of 75%. Considering above, the phase II would be required to be commissioned by year
2020 when the above capacity is utilized and traffic exceeds the above threshold.
Phase 2 – A separate wharf 200.0 m long X 20.0 m wide is proposed in the port area towards
North/East direction which will be mainly for handling container cargo with higher capacity cranes
than considered in Phase I with increase in cargo handling rate by about 25 to 30%.
The area earmarked for future extension of about 20 hectares is proposed to be developed by
reclamation upto deck level of wharf the shore protection using rubble bund using of required sizes
of stones as per the design. The area so developed will be utilized for container / bulk/ break bulk/
other cargo stored separately with provision for both open / covered storage as per the need.
After commission of new wharf mainly for containerized cargo, the existing wharf will be used for
handling bulk and other cargo of comparatively less weight. After addition of second wharf, the
installed capacity would get increased to about 7.60 million tonnes per annum and actual capacity
utilization would be about 6.0 million tonnes per annum with operational efficiency of 75%.
The Thankassery port is planned considering dredging in future upto -10.0 m level thereby allowing the
vessels upto 9 m draft at all tides. Considering this the vessels of size upto 15,000 dwt can be
maneuvered inside the harbour and berth at the existing wharf structure. At present the depths
available at wharfs and inside the harbour are about -6.5 m to -7.0 m, which will allow vessels having
draft upto 5.5 to 6 m to operate in the harbour. This will allow vessels of size 6,000 to 7,000 dwt to berth
at all tides.
Financial Feasibility
The State Government of Kerala had the foresight to tap the potential of Thankassery for the
development of a port and had accordingly invested in a phased manner to develop the region into a
coastal / feeder gateway terminal. The immediate focus is hence to utilize the existing infrastructure
created by State Government and accordingly complement the facilities so created resulting in
commercial operations of the port. To that extent the private developer would be required to invest
around Rs. 400 million especially in machineries and equipment to commence operations for Phase 1.
Once the threshold capacity of the existing facilities is reached in Phase 1, the private Developer would
be required to invest Rs. 1,250 million for creating new infrastructure in Phase 2 to cater to the
envisaged cargo . Based on the assumption and estimates, the profit and loss statement and cash flow
statement for the project was prepared. The projected gross revenues and profitability so worked out
has been indicated below –
Projected revenues -
Rs. Million
Page 12 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Year Revenues
2015 176.43
2020 423.20
2025 596.75
2030 1077.54
2035 1945.62
2040 2411.78
Profitability -
In Rs. Million Year EBIDTA
2015 91.53
2020 253.17
2025 365.20
2030 689.53
2035 1525.75
2040 2273.77
Overall financial analysis for the proposed investments and the project was undertaken for a period of
30 years. DSCR calculations have been carried out for each phases from availing the debt till its
repayment.
While a positive NPV shows that the project as feasible, the purpose of the IRR calculations is to assess
whether the returns are adequately above the hurdle rate the stakeholders would have in mind in terms
of an adequate return on investment and the purpose of DSCR is to evaluate the overall debt payment
capability.
Following is the summary of these financial indicators:
Description Amount
Internal Rate of Return (IRR) in % 12.51
Net Present Value (NPV) in Rs. Million 205.09
Payback period in years 15
DSCR – Phase I 1.82
DSCR – Phase II 2.81
Strategy for implementation It is important for Thankassery port to pre-empt direct competition with existing major ports such as
Cochin port and Tuticorin port as these ports already have huge volumes of business and state of the art infrastructure in place. Accordingly Thankassery should be positioned as a coastal port complementing the existing operations of Cochin Port and the proposed operations at Vizhingham port.
Page 13 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
At present the depths available at wharfs and inside the harbour are about -6.5 m to -7.0 m , which will allow vessels having draft upto 5.5 to 6 m to operate in the harbour. This will allow vessels of size 6,000 to 7,000 dwt to berth at all tides. Hence in phase 1 it is proposed to commence operations using 6,000 to 7,000 DWT vessels with minimal investment as this option obviates the requirement for deep dredging. In other words, the huge capital and maintenance dredging costs is pre empted here. In phase 2 from 2020, the port would be able to handle 15,000 DWT vessels ( after dredging) considering the increased traffic.
The State Government has already done a significant amount of the effort over the period of years to provide a ready gateway facility. This obviously becomes a selling point for Thankassery port, since the prospective Developer can invest the minimum amount required for material handling equipment, strengthening of berth and other minor contingencies and this also minimizes the risk for prospective private developers who can start operations within two to three months of signing of the concessionaire agreement.
Having an existing infrastructure also offers the prospective developer to utilize the facilities to its optimum capacity. Accordingly the private developer can observe the traffic flow to the port for a period of 5 to 6 years and based on the prevailing circumstances can ramp up capacities. This provides the port developers a leeway in terms of port planning.
The evacuation of the cargo is a critical parameter for Thankassery port and hence it is necessary
that the existing road network is augmented by additional dedicated four lane road corridor from the port complex upto a suitable point on the National Highway – 47 connecting Trivandrum and Cochin. The port connectivity is to be incorporated as part of development plan of Kollam city and surrounding areas in consultation with urban development authorities of Government of Kerala.
With regards to the development of the rail connectivity to the Kollam ( Thankassery) port, presently the inland movement of the cargo type being generated from the hinterland identified for Thankassery port is mainly through road since the primary cargo generators are within the radius of 150- 200 kms from the port. Cargo generators in the secondary hinterland of Tamil Nadu for the Kollam port is expected to use the rail connectivity, though this cargo expected is not very significant due to the same being routed towards Tuticorin port. Presently, based on the cargo identified for the port, rail connectivity is not a pre-requisite. However, if such a connection exists, it will provide additional advantage to the project.
The cost for the development of road connectivity and that of the rail (if required) should preferably be undertaken by the government for making the project feasible and attractive to a private developer
Page 14 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
1. Introduction
1.1 Project background & rationale
This chapter encapsulates the background information about the Client and purpose of this project
report.
The Client, Directorate of Ports (DoP) has been mandated to undertake all activities of the Kerala State
Government for the development of port sector in the State. Kerala is endowed with a nearly 590 km
long coastline and enjoys proximity to the international sea route. To leverage on this geographical
advantage, the DoP has embarked on an ambitious mission of developing several green field ports along
the Kerala coast under the Public Private Partnership (PPP) model. This initiative bodes well with its
endeavor of becoming a maritime state and ensuring world class infrastructure as articulated in the
document ‘Vision 2025 for State of Kerala’ compiled for the Kerala State Council of Confederation of
Indian Industry (CII). Furthermore, with US $ 18 billion likely to be invested in port sector in India over a
time frame of next 5-7 years, this initiative is well justified1.
The port of Thankassery figures in the priority list of ports to be revived and developed for small modern
vessel shipping. With a view to gauge the future potential of the proposed port at Thankassery (Kollam),
the Directorate of Ports entrusted Deloitte Touche Tohmatsu India Pvt. Ltd. (DTTIPL) the task of
preparing a detailed project report (DPR). The broad level scope of work is spelt out below:
Conduct a detailed study of the cargo movement to & from the hinterland regions
Market analysis including traffic forecast for the port for 20 years
Determine the location & types of cargo handling facilities and back up area required with detailed
land acquisition plans
Determine and fix levels to which capital and maintenance dredging is required along with a detailed
dredging plan
Details of fire fighting, sanitary arrangements, water and waste water management and obtaining of
all necessary clearances from relevant authorities in this regard
Preparation of Master plan with berth orientation, berth dimension, services, and facilities along
with proper security plan under ISPS code
Conduct a Rapid Environmental Impact Assessment (EIA) & Technical studies to ensure an
environment friendly and sustainable port development
Detailed cost estimation, both capital and operation maintenance
Fixation of tariff structure and revenue estimates
Project structuring option along with recommendation
Project implementation methodology, phasing of infrastructure, and suggesting timeline for
development
Recommendation of the structure of Special Purpose Company (SPC)
Funding options / arrangements for the project and identify the resource for meeting the project
1 Shipping Industry Update - September 2009
Page 15 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Evaluate the possibility for establishing alternate source of revenue like commercial complexes, SEZ
etc.
1.2 Structure of the Report In the course of compiling this report, DTTIPL has ensured that specific requirements as outlined in the
RFP have been addressed appropriately. The report contains chapters on project background, overview
of business landscape, traffic and hinterland analysis, site investigations, port planning aspects,
operational aspects, determination of tariff and other revenue streams, project cost estimation,
financial analysis and recommendations as structured in the table below:
Chapter Topics Covered
Chapter 1 This chapter on introduction covers project background , rationale, & report
structure
Chapter 2 This chapter deals with the overview of business landscape – PESTLE and SWOT
analyses
Chapter 3 This chapter addresses the Traffic Analysis component which includes Deloitte
approach to traffic study, hinterland mapping, commodity profiling, traffic
forecasting by commodity based potential and traffic projections under low,
medium and high growth scenarios.
Chapter 4 This chapter covers the details of the site investigations including environmental
details, connectivity issues, topography of the region, bathymetry, tide, wave, wind,
current and profile of the existing infrastructure such as power, water, roads,
railway, telecommunications etc.
Chapter 5 This chapter deals with Port planning and narrates the
Existing port facilities
Planning methodology
Strategy for project planning
Port layout
Port facility requirements – governing vessel size, berth requirements,
Dredging, etc.
Planning criteria – tranquility requirements, turning circle,
marine operational criteria and storage area levels
Planning consideration and specifications of operations - width and depth of
channel
Cargo handling equipments – for general cargo, bulk and containers
Navigational aids etc.
Chapter 6 This chapter provides details of capital costs and operation & maintenance costs for
the various facilities so planned
Page 16 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Chapter Topics Covered
Chapter 7 This chapter covers the overview of tariffs, regulatory framework, tariff setting and
tariff determination
Chapter 8 This chapter deals with the financial analysis covering the identification of revenue
streams, cost structure, debt-equity ratio, projected profitability and cash flow
statements, estimation of net present value (NPV), internal rate of return (IRR) and
debt service coverage ratio (DSCR)
Chapter 9 The last chapter of the main report provides the strategic recommendations about
the proposed project at Thankassery (Kollam)
Annexure This includes the details of the stakeholders contacted for the primary survey, the
rationale behind the cargo growth rates, connectivity map, topography and contour
map of port area, borehole tests results, report on REIA study undertaken by CED,
port development layout plan, detailed financial calculations and the clarifications
provided on the draft report submitted based on the queries raised by the
Directorate of Ports
Page 17 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
2. Overview of business landscape
The business landscape is considerably influenced by the macro-economic environment such as
Government policies, legal framework, etc. Despite having a commendable Human Development Index
(HDI) and impressive socio-economic indicators, Kerala is lagging in terms of industrialization. This
chapter provides broad contours of the business environment with analysis of strengths, weaknesses,
opportunities and threats for the proposed project.
2.1 PESTLE analysis Business environment covers factors affecting the business which are external and needs to be assessed
for its likely impact on port development. PESTLE is an acronym for the six key strategic areas of change,
namely: Political, Economic, Social, Technological, Legal, and Ecological and a technique for
understanding the impact of various external influences on a business. The study aims to analyze the
following -
a) Regulatory policies, legislation and standards imposed on the industry
b) Enabling technologies and trends in the port sector
c) Developments in the region and international scenario
d) Social and political factors likely to impact the proposed Thankassery port
2.1.1 Political
The port sector in India is influenced by political developments at both, the Central and the State levels.
Although political developments at the Centre do not have a direct bearing on port operations, it
manifests in form of hinterland developments and also affects EXIM trade.
Kerala has been under coalition politics ruling at the State level most of the time. The state has achieved
a high degree of success in social health care, literacy, land reforms, education, and social service
initiatives. However, in terms of industrialization, it is way behind other states like Gujarat, Maharashtra,
Tamil Nadu and Haryana. Traditionally, it has been home to small scale industries like coir making,
fishing and agricultural / horticultural products like spices, cashew, rubber, etc.
To its credit, Kerala was the first state to successfully develop an airport under the Public Private
Partnership mode. Cochin International Airport (CIAL), a public company, was set up with the support of
Non-resident Indians, a 13 % holding each by the Government of Kerala and the Central government and
the balance 74 % majority held by private players. Today, Kerala boasts a total of eleven contracts under
PPP mode, the values of which total up to approx INR 11,973 Crores2. With PPP now covering most of
the infrastructure projects including highways & ports, and the state having demonstrated its
2 www.pppindiadatabase.com
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commitment with CIAL, the road ahead for other project developments under the PPP mode should not
be difficult.
2.1.2 Economic
An extensive secondary research was carried out in order to determine the impact of economic factors
on development of Thankassery port. The economic analysis aims at covering the following two
dimensions in a nutshell:
Economic trends in India
Sectors and industries in Kerala
India’s gross domestic product (GDP) expanded 7.9 per cent in the second quarter of 2009-10 fiscal, up
from 6.1 per cent in the first quarter. The government is optimistic about the spurt in GDP growth and
views the figures as further confirmation of the economy’s recovery. Further, the Organization for
Economic Co-operation and Development (OECD) has forecasted GDP growth for India at 7.3 percent
and 7.6 per cent in 2010 and 2011 respectively. Real GDP growth is forecast to average around 6% for
the next nearly 20 years, making India one of the fastest-growing economies in the world.
Kerala’s economic performance is driven by the secondary and tertiary sectors. The state‘s GDP grew at
a compounded annual growth rate (CAGR) of ~ 12 per cent between 1999-00 and 2008-09 to reach US$
40.5 billion3. Driven by manufacturing, construction, electricity, gas and water, the secondary sector has
been the fastest growing sector, at a CAGR of around 14.5 per cent. The per capita income of Kerala was
US$ 1,040 in 2007-08, as compared to all-India average of US$ 850.
The tertiary sector, the largest contributor to Kerala‘s economy, grew at a rate of 12.5 per cent in 2007-
08, over 2006-07. The sector was driven by trade, hotels, real estate, transport and communications.
2.1.3 Social
The socio-cultural setup plays a pivotal role in determining the future business potential of a proposed
venture and port development is no exception. Given the current state of affairs and future growth
potential of South Malabar region, port development activities would provide the necessary impetus for
development of trade and industry in the region.
Investor perception, is no doubt improving with time, but needs to be nurtured by organizing regular
workshops with a view to facilitate interaction and exchange of thoughts between different stakeholder
groups. Certain section of the fishing community in the Thankassery region expressed concern on
sharing of the waters with a port. Hence, efforts will have to be focused on moulding community
opinion & getting the locals to support port development. On the other hand, perception of local units
in cashew & seafood processing has been extremely encouraging. All these factors were identified while
conducting the primary research and stakeholder analysis.
3 Kerala State - Budget in Brief 2009-10
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2.1.4 Technological
As the world economies come closer with globalization, ports are being increasingly cast as partners in
assisting customers to compete for business share in the global market. Advancements in port
technology, particularly relating to containerization and information exchange, are warranting the need
for major financial commitments to stay ahead of the technology wave. In India all the major ports and
airports are being linked to the centralized Electronic Data Interchange (EDI).
Cochin is the first port to have successfully launched the concept of ‘ePort’, which essentially integrates
the port’s operational, financial, real estate, & human resources on an integrated Port Information
system. It also ensures a single window facility to trade for filing out application, receiving service bills,
payments & enquiries. Once fully functional, ePort will provide interface between customs, port users,
banks, and port community system of all India Ports Association.
A late entry in a competitive setup implies immense potential to incorporate the best and latest of
technology in their proposed operational set-up, without worrying about the compatibility with the
legacy systems. Upcoming ports like Thankassery can draw on this opportunity by providing advanced
technologies like Global Positioning System (GPS), Warehouse Management System (WMS), Radio
frequency identification (RFID), and thereby gain competitive edge over the operational ones.
2.1.5 Legal and Regulatory
Regulation in infrastructure, be it maritime / ports or any other area, must be aimed at achieving
inclusive growth. Nationwide, some of the commonly faced regulatory hurdles in maritime and logistics
space can be broadly grouped as under –
Customs
1. Outdated customs formalities including documentation causing huge delays
2. Complex / unclear rules & regulations leaving interpretation to the discretion of Customs
officials
Taxation / Bureaucracy
1. Multiple taxes render Indian shipping internationally uncompetitive
2. Involvement of multiple agencies such as Commerce Ministry for ICD/CFS/SEZ, rail ministry for
private rail terminals, Ministry of Surface Transport for Roads, & Shipping Ministry for Ports /
Shipping leading to cost overruns, inconvenience & delay
3. Applicability of multiple acts such as Railway Act, Merchant Shipping Act, Indian Ports Act,
MMTG Act rendering compliance cumbersome as regards multi-modal operations
Intervention at the Central level is indispensable in getting these issues resolved. However, pro-
activeness & commitment of State Maritime Boards / Port departments can go a long way in helping the
sector sail through regulatory hurdles. Gujarat’s success in developing a good port sector was also
possible due to phased privatization followed by fully private ports.
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2.1.6 Environmental
Kerala’s coastal stretch is characterized by the presence of lagoons, kayals, estuaries and coastal dunes.
It also has a rich biodiversity and is home to many exotic species of birds, animal and plants.
Any developmental activities along the coast may pose a threat to the environment in form of soil
erosion, pollution, salt-water intrusion, etc and this can adversely impact the region’s biodiversity.
Hence, environment assumes a very high significance for developmental projects including ports and
airports.
A Rapid Environmental Impact Assessment (REIA) has been conducted by DTTIPL through its technical
associate, Centre for Environment and Development (CED) to diagnose the future likely impact of port
development on various aspects of environment. The summarized findings of the same have been
indicated in section 4.8.
2.2 SWOT Analysis SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses,
Opportunities, and Threats involved in a project or in a business venture. The SWOT analysis facilitates a
thorough investigation into the port’s internal & external factors and helps set a blueprint for further
development action.
2.2.1 Strengths
Kollam has been enjoying commercial and trading reputation since ancient times. The Thankassery port
is known to have attracted Arabs, Portuguese, Greeks, Chinese and British for trading. Also, Kerala’s
cashew-nut industry is centered here. To begin with, this can ensure minimum regular volumes of
cashew cargo for the port. Sooner or later, port development will trigger growth of cashew industry,
leading to substantial cargo volumes over the longer horizon.
Based on the foresight that infrastructure development is the prime –mover for industrial development,
the State Government developed existing port facilities that would provide the private developer a
ready-made infrastructure set-up to commence operations from Day 1. A 116 m long wharf and a 6.3 m
deep draft are currently available at the port. The designed draft of 10 m will enable the port to handle
vessels up to 15,000 – 20,000 DWT.
Again, the Port is a protected harbour and conducive for all-weather operations. It is outside the normal
path of tropical cyclones and can therefore be regarded as a “Safe Port”. It has had no history of “anchor
dragging” even in foul weather.
2.2.2 Weaknesses
Narrow approach roads to the jetty have been a hindrance so far. Nevertheless, work is in progress to
broaden it to a four lane road connecting NH-47. Coastal road from Thankassery to Vadi is also
underway. Seafood exporters further suggest widening of existing 5 m wide road between Thankassery
and Neendakara. Labour related issues is a concern at Thankassery port, but can be managed.
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2.2.3 Opportunities
Besides being able to handle exports of a variety of items including processed minerals, cashew, and
marine products from the region,
Thankassery has the potential to
cater to a booming coastal trade.
If rail connectivity to Tamil Nadu
hinterland is enhanced, it will enable
the port to also cater to the
industrial belt of Madurai / Theni.
Further, development of
Vallarpadam & envisaged Vizhinjam
International Container Terminals
(ICTs) will boost the possibility of
feeder services from Thankassery to
these locations.
With the State Government support
& initiatives headed in the right
direction, the port development is
likely to sail through without much
difficulty.
Figure 1 : SWOT analysis of Thankassery port
2.2.4 Threats
Although the overall picture is quite encouraging, alternative modes of transport such as rail / road and
other potentially competing ports & their relative locational advantages pose a threat to the proposed
port at Thankassery. Primarily, it is the ability to attract a good private developer that can hold the port
in good stead and help it to develop a competitive advantage over time.
Initially a minor port, Tuticorin today has captured a significant market share & has flourished over the
past more than two decades. It caters to some portion of Kerala cargo in addition to the cargo having
origin / destination in Tamil Nadu & other states. Not only does Tuticorin port share some part of
Thankassery port’s secondary hinterland, but some Kerala based EXIM players also prefer Tuticorin port
for operations.
Ports & shipping has been one of the severely affected industries during the recession. Although cargo
outlook in the medium to long term looks favorable, private players would continue to face several
challenges.
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3. Traffic assessment
3.1 Approach to the traffic study
There has been no exhaustive past cargo trends recorded from Thankassery port. Accordingly, to
determine the type of infrastructure facilities (off-shore and on-shore) that would be needed to be
developed at the port, it was essential to understand the nature of commodities and their indicative
quantum that might call on the Thankassery port. This necessitated the need of a comprehensive traffic
study.
Cargo traffic based on Origin-Destination (O–D) analysis , with contribution and share of Kollam and
adjoining districts including Pathanamthitta, Thiruvanthapuram, part of Alappuzha, Kottayam, Idukki
and the bordering districts of Tamil Nadu was undertaken.
The likely open cargo that would be routed through the port of Thankassery has been considered based
on the following -
• Primary survey in the areas identified as hinterlands (cargo belts) to obtain insights from the
stakeholders on -
Assessment of the EXIM commodities in the identified hinterland
Topography and connectivity issues that may impede / hasten the cargo flow through
Thankassery port
Acceptability of the relevant stakeholders ( shippers) on diverting their cargo to Thankassery port
The indicative cost savings
• Distance of the cargo belts to Thankassery port vis-à-vis the other existing and upcoming ports in
the region
• Identification of such open cargo in terms of commodities and their indicative quantum
• Forecasting of cargo growth and traffic based on the commodity profiles and growth potential for
EXIM trade / coastal shipping that reflects the above ground realities.
3.2 Hinterland mapping
The competitive position of a port is largely dependent upon the quality and reach of its hinterland
connections. In order to identify the different market segments, the entire hinterland has been divided
into different cargo belts.
Cargo belts are defined as discrete geographical areas which can be identified with a particular set of
commodities i.e. containers, bulk and break bulk generated from these areas and which have a
reasonable share in Export Import (EXIM) trade from the hinterland.
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Based on this classification, the entire hinterland for Thankassery port has been divided into two major
cargo belts. For the purpose of this report, the primary hinterland has been treated as the districts of
Kerala adjoining to the Thankassery port and the secondary hinterland as the border districts of Tamil
Nadu. The cargo belts identified based on the above assumptions are as follows:
Table 1: Regions in the primary and secondary hinterland
Figure 2 : Indicative primary hinterland for
Thankassery Port
Figure 3 : Indicative secondary hinterland for
Thankassery Port
In order to determine the potential of each cargo belt, a desk based research was undertaken initially.
Subsequently, various stakeholders were identified, shortlisted and contacted for detailed interaction.
Accordingly, all the relevant stakeholders concerned with a Gateway Port were contacted and these
included -
Major industries,
Coastal shipping companies,
Customs house agents,
Commodity boards,
Trade associations,
Regional export promotion trade bodies,
Commodity export promotion body,
Customs officials,
District Industries Centre,
Primary hinterland Secondary hinterland
• Kollam
• Pathanamthitta
• Thiruvanthapuram
• Parts of
Alappuzha,
Kottayam and
Idukki
• Kanyakumari
• Theni
• Madurai
• Virudunagar
• Tirunelveli
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Logistics service providers including inland container depots, container freight stations.
A judicious combination of structured as well as unstructured questionnaires were administered by the
survey team in order to obtain a better understanding of the cargo flow pattern of various commodities
in and out of the respective hinterland. More than 150 stakeholders from the referred sectors were
covered across the primary and secondary hinterland region and the details of the same are enclosed as
Annexure 1. The indicative profile of the cargo commodities considered as per the inputs obtained
during the primary survey is indicated in the table below. In addition to the EXIM cargo, the coastal
cargo movement pre-dominantly between Gujarat and South Kerala has also been taken into account.
Cargo belts Commodities considered
Primary 1. Cashew nuts,
2. Cashew kernels,
3. Cashew nut shell liquid,
4. Seafood,
5. Clay,
6. Timber logs,
7. Sillamanite,
8. Titanium-di-oxide,
9. Marbles / tiles,
10. Blood bags,
11. Sand,
12. Newsprint / waste paper,
13. Equipment / raw materials
14. Cement
15. Finished fertilizers (Urea & Muriate of Potash)
Secondary 1. Marbles / tiles,
2. Timber logs,
3. Rubber,
4. Food & agri products,
5. Cement
Table 2: Cargo profile of the primary and secondary hinterland
Note – The hinterland analysis was achieved based on the information obtained from the respondents
contacted in the primary survey. While the overall cargo traffic at respective major ports is available
from secondary research, the individual district wise cargo flow of the state of Kerala is not readily
available on secondary domain. To gauge the indicative traffic that would be expected from a particular
hinterland and their willingness to divert the cargo to an alternate port required the inputs from the
relevant stakeholders from the region.
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3.3 Primary hinterland analysis Considering the distances between the primary hinterland districts & Thankassery (Kollam) / Cochin
ports, it is quite justifiable that cargo meant for / originating from Alleppey, Kottayam, & Idukki would
be more or less tied to Cochin port or to the cargo harbour of Alappuzha ( once it is commissioned).
Hinterland districts Kollam Cochin
Alleppey 77 km 57 km
Kottayam 86 km 72 km
Idukki 238 km 132 km
Pathanamthitta 64 km 131 km
Trivandrum 61 km 194 km
Table 3: Indicative road distances between the identified primary cargo belts and gateway ports
Source: http://www.mapxl.com/highway-path-finder/map_routing.phtml?config=routing
Possible cargo from the districts of Kottayam & Idukki has also been considered in calculating the likely
open cargo for Thankassery port. Most hinterland cargo is in containerized format. Marine food
exporters and log importers seem to use FEU reefer and FEU4 normal containers respectively.
3.3.1 General observations based on the primary survey
The observations are based on the discussions from the various respondents contacted about the future
potential of Thankassery port
All respondent cashew & sea food exporters at Kollam were very much in favour of port
development & anticipated almost 100% diversion of their cargo to Thankassery. To the extent to
which Kollam based cashew exporters have units in Tamil Nadu, exports would be tied to Tuticorin
port.
Significant coastal movement (around 2,100 TEUs per month) between ports of Gujarat to Cochin
with almost 25% of the cargo meant for the primary cargo belt region.
Kottayam Port / ICD is being marketed in terms of having connectivity to Cochin port by way of
inland waterways. It also caters to the landlocked districts of Kottayam, Idukki & Pathanamthitta.
This could further mean a portion of Pathanamthitta cargo being moved to Cochin via Kottayam ICD,
and therefore a possibility of diversion of lesser cargo to Thankassery port.
Generally, the EXIM players seem to be comfortable with Cochin port. Labour strikes and
disturbances seem to be the only problem faced. In such instances or at times when the orders are
on the higher side or at the insistence of the buyer, they use Tuticorin port. Chennai port is rarely
used.
4 The logs are imported both in bulk and in FEU containers depending on the importer’s requirement. Those brought in FEUs
are however transported to their inland destination by removing the logs from the containers at the timber storage yard and routing it to the importer in trailers in loose / bulk basis.
Page 26 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Shipping companies, logistics players have indicated that Thankassery can easily expect around
2,000 to 4,000 containers per month , subject to -
the port charges, vessel related charges (pilot age, tug etc), ground rent charges , THC should be
almost half of that charged by Cochin port
Storage free time should be more than Cochin port
3.4 Indicative traffic of the primary hinterland and
potential open cargo The potential open cargo for Thankassery port for the hinterland has been analyzed based on the district
wise commodity flow and the coastal cargo. The analysis of the potential open cargo has been analyzed
in the subsequent sections.
3.4.1 Open cargo from Kollam district
The potential open cargo from Kollam district for the base year 2009 has been indicated in Table 4 based
on the following analysis -
1. Raw cashew nuts - The import of raw cashew nuts into India rose from 2.49 lakh tonnes in 2000-01
to a 6.05 lakh tonnes in 2008-09, showing a CAGR growth rate of around 11%. The lion share of
imported raw cashew (upto 60%) was utilized by processing units in Kerala. The imports of cashew
nuts in Kerala from Cochin port has increased from 2.9 lakh tons in 2003-04 to 3.72 lakhs in 2007-08.
Almost 80-90% of imported cashews is routed to Kollam and adjoining areas. Accordingly taking
80% of the import to Kollam, we have - 3.72 lakhs x 80% = 2.97 lakh tons (18,600 TEUs). CHAs are
also of the opinion that annual imports of raw cashew nuts at Thankassery could range around
17,000 TEUs.
2. Equipment - Import containers for raw materials, etc. other than major cargo items & Less than
Container Load (LCL) equipment cargo are assumed to total up to 100 annually. We have divided
this equally among Kollam & Thiruvanthapuram. i.e., approx. 50 TEUs p.a. each.
3. Cashew kernels - The total exports of Kollam / Pathanamthitta units (obtained as a percentage of
the total exports from India and data provided from The Cashew Export Promotion Council) is to the
tune of around 60,000 tons. Assuming the proportion of usage of Cochin & Tuticorin ports as 99:1,
we arrive at 59,400 tons or 3,960 TEUs for Cochin. We can safely assume that cashew cargo would
be tied to Kollam, in which case the likely quantum at Kollam for base year would be around 3,960
TEUs. The figure also matches with the actual figures indicated by Seaway Shipping ( 300 TEUs per
month i.e. around 3,600 TEUs per annum) and the minimum possible cargo predicted by one of the
leading CHAs in the region, Jai Narayana Shipping.
4. Frozen Marine Foods - Total number of seafood containers from Kollam as per primary survey is
around 1,260 numbers of TEUs.
5. Titanium di-oxide & Sillimanite: These represent the minimum annual export quantities of Kerala
Minerals & Metals Ltd (KMML) and Indian Rare Earths, Chavara respectively.
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6. Cashew nut shell liquid: Aggregate of quantities currently being exported by Kollam units, as sourced
from (Cashew Export Promotion Council) CEPC website is given below:
Import Commodity Annual Qty in tons Annual Qty in TEUs
Raw Cashew Nuts 297,600 18,600
Equipment 500 50
(A) 298,100 18,650
Export Commodity Annual Qty in tons Annual Qty in TEUs
Cashew Kernels 59,400 3,832
Frozen Marine Foods 15,120 1,260
Titanium di-oxide 7,200 400
Sillimanite 400 18
Cashew nut shell liquid 6,500 325
(B) 88,620 5,835
Total [(A) + (B)] 386,720 24,485
Table 4: Potential open cargo from Kollam district
3.4.2 Open cargo from Thiruvanthapuram district
The potential open cargo from Thiruvanthapuram district for the base year 2009 has been indicated in
Table 5 based on the following analysis -
1. Equipment & Raw materials: As already indicated in the point number 2 of Kollam cargo
calculations; Import containers for raw materials other than major cargo items & LCL equipment are
assumed to total up to 100 annually and dividing this equally among Kollam & Thiruvanthapuram,
we obtain around 50 TEUs p.a. for the region of Thiruvanthapuram.
2. Blood bags: The quantum of blood bags is expressed in terms of cartons & not tons. It is a company
specific quantity (requirement of Terumo Penpol)
3. Clay & Titanium di-oxide: They represent the likely cargo quantities for English India Clays &
Travancore Titanium Products Ltd respectively.
Import Commodity Annual Qty in tonnes Annual Qty in TEUs
Equipment & Raw materials 500 50
(A) 50
Export Commodity Annual Qty in tonnes
Annual Qty in TEUs
Blood bags 740 148
Clay 10,000 667
Titanium di-oxide 1,980 110
(B) 12,720 925
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Total [(A) + (B)] 13,220 975
Table 5 : Potential open cargo from Thiruvanthapuram District
3.4.3 Open cargo from Idukki district
The potential open cargo from Idukki district for the base year 2009 has been indicated in Table 6
Particulars Processed Cardamom
Black Pepper
Spice Oils & Oleoresins
Total
Item wise exports through Cochin Port in MT 243 26,371 5,802 32,416
Export from Cochin and originating from Kerala
231 25,052 5,512 30,795
% of export cargo origination from Idukki district
90% 70% 50% -
Quantity of export item from Idukki district 208 17,537 2,756 20,501
Quantity in TEUs 14 1,169 138 1,321
Open cargo % 10% 10% 10% 10%
Open Cargo in tons 21 1754 276 2050
Total Open Cargo in TEUs 1 117 14 132
Table 6 : Potential open cargo from Idukki District
Working notes for Table 6 –
1. Item wise exports through Cochin port have been obtained by averaging figures for last two years
2. 95% of Cochin exports of the above spice items are assumed to be originating from Kerala
3. Idukki’s contribution to Kerala’s exports of processed cardamom, black pepper and spice oils /
oleoresins is assumed as 90%, 70%, & 50% respectively
4. Taking percentage of open cargo for Kollam as 10%, we arrive at a total annual figure of 132 TEUs
5. Tea cargo from Idukki would be tied to Cochin & Tuticorin ports. Regardless of where tea is grown
(indicated by existence of tea estates), tea will be exported either from Cochin or from Tuticorin
ports. It is not directly exported even by bigger players like Harrisons Malayalam & AVT, but is sold
out at auction. Although ports may develop at several places along Kerala coast, it will not be
feasible to have a Tea exchange set up at such small locations (at present, tea exchanges are in
Coimbatore, Cochin & Coonoor)
3.4.4 Open cargo from Kottayam district (Rubber)
For Kottayam district, rubber related EXIM cargo has been considered and the calculation of such a
possible open cargo has been indicated in the Table 7 below. The approach for arriving at the workings
has been indicated in the working note after the Table:
Particulars 1 2 3 4 Total
Export ( Natural
rubber)
Exports (Reclaimed
rubber)
Imports ( Natural rubber)
Imports (Synthetic
rubber)
Page 29 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Particulars 1 2 3 4 Total
Export ( Natural
rubber)
Exports (Reclaimed
rubber)
Imports ( Natural rubber)
Imports (Synthetic
rubber)
Item wise Annual EXIM through Cochin Port in tonnes
46,926 4,317 5,037 NA NA
EXIM from Cochin and origin / destination in Kerala
46,472 4,317 4,381 37,184 92,354
% of export cargo origination from Kottayam district / import cargo landing in the hinterland districts
55% 55% 39% 55% -
Quantity of EXIM cargo from / to Kottayam & other hinterland districts
25,604 2,374 1,709 20,451 50,138
Quantity in TEUs 1,348 125 90 1,076 2,639
Open Cargo % for Thankassery Port
5% 5% 26% 5% -
Open Cargo in tonnes 1,280 119 444 1,023 2,866
Total open cargo in TEUs (max)
67 6 23 54 150
Table 7 : Potential open rubber based cargo from Kottayam district
Working notes -
1. In the table, in column number(1) , the total of party wise figures for 2008-09 obtained from Rubber
Board is assumed to be quantum of natural rubber exported from Cochin port. The quantum of
Cochin bound rubber cargo originating from Kerala is arrived at by excluding rubber exports by
parties based out of Kerala from the above.
2. Number of district wise manufacturing units is not available. Again district wise production isn’t a
justifiable basis for apportionment. Hence in (1) above, percentage of rubber cargo generation
(55%) from Kottayam has been derived based on available data i.e., Kottayam vis-à-vis Kerala. This
percentage is assumed in (2) & (4) also.
3. In (1) above, going by the factory locations of parties, natural rubber exports is to the tune of 25,604
tonnes are assumed to originate from Kottayam based units.
4. In (2) above, Kerala’s export of reclaimed rubber has been calculated by applying the proportion of
Kerala based manufacturing units vis-à-vis all India units to country’s total exports of reclaimed
rubber.
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5. In (4) above, Kerala’s import of synthetic rubber is calculated by applying the proportion of state’s
relative share in national consumption to country’s total synthetic rubber imports.
6. We have assumed 5% diversion of Kottayam cargo to Thankassery for all types of rubber. The only
exception is made to imports of natural rubber [In (3) above]. Since district wise number of dealers
& total dealers of natural rubber in Kerala are available, we have considered natural rubber imports
only by districts in the immediate hinterland i.e., Kollam, Pathanamthitta & Trivandrum (i.e., 39%
share of Kerala imports). Based on the percentage of rubber dealers in the districts of Kollam,
Pathanamthitta & Trivandrum which comes to around 26%, we are assuming an identical
percentage diversion of cargo to Thankassery.
3.4.5 Open cargo from Pathanamthita district
Pathanamthitta is considered as an industrially backward district. At the most, some spice cargo can be
expected to come from here to Thankassery port. Few spice exporters are also based out of Kottayam.
As per primary sources, these districts could collectively account for approximately 10-15% of Kerala’s
pepper exports. Applying a median rate of 12.5% to Kerala’s pepper exports of around 27,500 MT, we
get 3,437.5 MT. Assuming 25% of this to be open cargo for Thankassery port , we get 859 tonnes or
around 60 TEUs per annum.
3.4.6 Coastal cargo movement between Gujarat and Kerala.
Marbles /tiles / ceramics
Kerala being pre-dominantly a consumer state, there is significant cargo movement from the Northern
states to Kerala including marbles / granites. The movement of the same is in containerized format and
each TEU has a capacity of 28 tons. Based on the interactions with the coastal shipping companies it is
estimated that Thankassery may handle around 270 TEUs of marble / granite per month.
For handling the marble containers, a higher capacity material handling equipment would be required.
This would lead to additional investments to the tune of almost 70-80%, which would not seem prudent
when, for handling almost 95% of the identified containerized cargo; a material handling equipment of
lesser capacity would suffice. Accordingly to keep the capital cost of the project to a reasonable value
thereby facilitating a better probability of making the project feasible, the marbles / granites commodity
have been excluded from the potential cargo possibility at Thankassery.
Clay powder
English India Clays has a coastal movement from Cochin to Mundra meant for domestic consumption for
the NCR region to the tune of around 2,000 TEUs (30,000 tonnes) per annum.
Sand
Sand is moved through the coastal route from Gujarat. In this regards, an existing shipping agent
confirmed employing Thankassery port for coastal movement of sand from Gujarat. The quantum of
sand indicated is around 72,000 tonnes per annum (parcel size of 6,000 tonnes and one shipment per
month).
Page 31 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Cement
Based on the interactions with a leading cement manufacturing company ( Ultra Tech Cement) which
has its plant in Gujarat, there does exist a strong possibility of Thankassery port being used as a
shipment and distribution point for South Kerala. The company has expressed its interest and based on
the response shown by the cement manufacturer, around 0.6 million tons has been considered. The
same has been considered based on the market side demand. In addition to Ultra Tech Cement,
another cement entity (Mehta Group)which has its base in Gujarat had approached DoP ( after the
submission of the draft DFR) with an expression of interest to use the port of Thankassery as its gateway
port in Kerala for its cement distribution. Accordingly the same has also been considered in the traffic
estimates in this report ( to the tune of around 5 lakh tons per annum)
3.4.7 Other import cargo
A study was also undertaken on the cargo imported by companies located in the districts of Kollam and
Trivandrum, which uses Tuticorin as the port of call. A dominant section of the imported cargo was logs
and newsprint / waste paper.
Newsprint / waste paper
Companies importing newsprint / waste paper, do so in TEUs as well as in FEUs. Most of these units are
based out of Kollam , Trivandrum district and import the cargo from Tuticorin. These companies so
contacted indicated that the import consignment is transshipped from Colombo to Tuticorin from where
it comes via road to their units and were open to Thankassery port, once it is commissioned. The
average annual imports of newsprint from Tuticorin for the past two years were 180 TEUs and 130 FEUs.
Timber logs
With regards to timber logs, the same are imported through Tuticorin port in bulk and also in FEUs.
Imports of timber logs originate from the countries of West Africa, New Zealand, Burma, Indonesia, and
South America. Only imports from South America are through FEU containers, while the other countries
are sending their consignment in bulk. However the logs imported through containers are offloaded at
the timber storage yard near the port and the same is then dispatched to the consignee on truck. Hence
for arriving at the quantum of timber imports, the same is expressed in tonnes.
In Kerala, the major timber units are based in Trivandrum, Kollam and Pathanamthitta. The orders for
the timber logs are placed through indenting agents based in Tuticorin. On interaction with these
indenting agencies viz Hari & Co, Prabhat Saw Mills, it was mentioned that Kerala importers preferred
Burma teak and around 2-3 vessels of timber meant for importers in Kerala call on every month in
Tuticorin. The quantum of cargo of these Kerala importers is around 10,000 tons per month from
Tuticorin. The quantum of timber cargo meant for the importers based in Kollam and Trivandrum is to
the extent of 4,000 tons.
The Kerala timber importers when contacted expressed their intention on using Thankassery port, since
it would save the inland road transportation cost from Tuticorin to Kerala. However they have indicated
the following factors that needs to be addressed in the event timber logs are being imported from
Thankassery port –
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Handling of timber logs requires specialized equipment and technical skills. Tuticorin has these
resources at their disposal, which in turn attracts the timber importers. The same should be
available at Thankassery port
After the timber is brought in the port, it is stored in the timber yards, before it is dispatched to the
importer through lorry. Storage of timber requires huge space and a minimum area of 10 acres
would be required for the storage of timber logs at Thankassery port.
The inland transportation of timber is through long axle trailers and the roads connecting the port
should be adequately equipped for the same.
The logs are usually bought in vessels which have a draft requirement of around 10 m, which should
be made available at Thankassery port.
In the event the above factors are addressed, the timber importers based in Kollam and Tuticorin would
be willing to divert their cargo to the extent of around 48,000 tons through Thankassery port.
Finished fertilizers
Aspinwall which acts as the principal shipping agent for FACT and Indian Potash Ltd have indicated that
for the import of finished fertilizers (Urea and Muriate of Potash), Thankassery port can be utilized.
Presently there is an import movement of finished fertilizers (Urea and Muriate of Potash (MoP)) to the
tune of around 1,00,000 to 1,50,000 tons per annum. The same is imported by FACT and Indian Potash
Ltd and repacked (without any processing) and distributed to the farmers in South Kerala.
3.5 Total potential open cargo for Thankassery port from
primary hinterland The total indicative open cargo based on the district, coastal and import quantities derived from 3.4.1 to
3.4.7 above for Thankassery port is indicated below -
Description Container Traffic Bulk / Break-
bulk Cargo
In TEUs In Tonnes In Tonnes
Primary Hinterland ( Kerala)
Kollam 24,485 386,720
Thiruvanthapuram 975 13,220
Idukki & Pathanamthitha
192 2,909
Kottayam 150 2,866
Coastal movement ( Clay)
2,000 30,000
Import cargo ( newsprint / wastepaper)
440 5,280
Coastal movement ( Cement)
1,100,000
Coastal movement ( sand)
72,000
Page 33 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Description Container Traffic Bulk / Break-bulk Cargo
In TEUs In Tonnes In Tonnes
Import cargo ( finished ferilizers - Urea & Muriate of Potash)
125,000
Import cargo ( timber logs)
48,000
Indicative open cargo from Kerala ( primary) hinterland - A
28,243 440,995 1,345,000
3.6 Secondary hinterland analysis
Unlike the Kerala hinterland wherein the cargo volumes are relatively limited, the identified districts of
Tamil Nadu (Kanyakumari, Tirunelveli, Virudunagar, Theni and Madurai ) which form a part of the
secondary hinterland have a comparatively higher industrialization spread and hence generate a
significant amount of cargo. The preferred port for these districts is Tuticorin given the distance and the
good roads connecting these districts to the gateway.
Distance in Kms
Town Tuticorin port Thankassery port
Madurai 134.49 256.11
Bodinayakkanur(Theni) 223.23 215.69
Tirunelveli 54.97 163.85
Virudhunagar 155.32 261.76
Kanyakumari 122.79 143.36
Table 8: Indicative road distances between the identified secondary cargo belts and gateway ports
Source : http://www.mapxl.com/highway-path-finder/map_routing.phtml?config=routing
However considering the relative distance of some of the major cargo generators within these districts
specially Shencottai and Nagercoil, which is at a distance of 92 kms and 136 kms from Thankassery ,
there does arise a case of possibility of diversion of the cargo from the identified secondary hinterland.
Accordingly to ascertain the hypothesis, a comprehensive primary survey was also undertaken amongst
the identified districts in the secondary hinterland.
3.6.1 General observations based on the primary survey
The observations are based on the discussions from the various respondents contacted -
The states of Tamil Nadu and Kerala are separated by mountainous terrain which might increase the
cost of road transportation for the shippers in the event of them using the Thankassery port.
Page 34 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
It was however indicated by the respondents that Kanyakumari district especially Nagercoil and
bordering areas of Tirunelveli can form part of the Thankassery port hinterland since the distance of
these locations to Thankassery is slightly less than that to Tuticorin.
There is a general perceived apprehensiveness among companies in Tamil Nadu to use Kerala ports,
due to issues like labour strikes, additional formalities, transportation issues, language problems,
taxes etc.
Tuticorin is majorly a feeder port and cargo is transshipped from Tuticorin port to Colombo port for
export to international destinations. Of late, even mother vessels have been calling at Tuticorin port
but the frequency is less. Unless there are mother vessels berthing at the proposed Thankassery
port and that too at frequent intervals, it is unlikely that companies in the secondary cargo belts
would change their port preference.
Some of the respondents have their own warehouses in Tuticorin and shifting to any other port
would mean they have to invest again in building new warehouses. It would an added cost and their
existing investment would be made redundant
Certain respondents have indicated that they would be willing to shift to Thankassery port only if
port charges are lower as compared to other ports and their CHAs operate out of Thankassery port.
3.6.2 Profile of EXIM commodities
The port of call from the secondary hinterland is presently Tuticorin. The important commodities
exported from the region through Tuticorin port is indicated below:
Sr No
Districts Export Commodities
1. Madurai Textiles, cotton yarn, fabrics, garments, terry towels, granite slabs, made-ups, food products, tyres, coir products, etc
2. Tirunelveli Garnet sand, garnet abrasives, Gherkins, cotton yarn, dry flowers, coir products, etc.
3. Theni Coir products , coir pith, cotton yarn, fabrics, coffee, etc.
4. Virudhunagar Safety matches, cotton yarn, fabrics, polypropylene bags, spices, dry chillies, stationery items, printed books, etc.
5. Kanyakumari Coir pith blocks and coir products, sands & minerals, rubber/latex gloves, sea food, Fish nets, cashew kernels, etc.
6. Dindigul Textiles, granites, gherkins, paper
Table 9: Export commodities from Tamil Nadu hinterland
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The imports in these districts consists of Timber logs, marbles, raw cotton, metal scrap, waste paper,
machinery, chemicals, pulses, spices, raw cashews, maize, sugar, industrial coal, limestone, cement, PP
granules, etc.
3.6.3 EXIM traffic of the secondary hinterland and potential open cargo
To arrive at the likely open cargo that might be deviated towards the proposed port of Thankassery from
the identified secondary hinterland, a drill-down concept was used.
Since the port of choice for the companies and industries situated in the districts of Madurai, Theni,
Tirunelveli, Virudunagar, Dindigul & Kanyakumari is Tuticorin port, the amount of cargo through handled
at Tuticorin port from these districts was considered. The calculation of open cargo for Kollam was
based on the cargo that might be diverted to Thankassery port derived on the distance / cost advantage.
A significant portion (40-50%) of the cargo handled at Tuticorin port is from the Coimbatore-Tirupur-
Karur belt. With regards to the identified secondary cargo belts, the district of Madurai contributes
around 7-8% of the cargo handled at Tuticorin port and the other districts of Tirunelveli, Theni, Dindigul,
Virudunagar and Kanyakumari contribute to 2-3% of the port traffic taking the total cargo contribution
from the identified secondary hinterland to around 20-25%.
The exercise for identification and obtaining the baseline traffic that might be diverted to Thankassery
was undertaken in two phases. The first phase involved obtaining an overview of the respective
districts, identification of the major exporters and importers in the districts and communicating with
certain exporters and importers identified to obtain an understanding of the nature of EXIM trade in the
districts, their port of choice, etc.
The second phase involved procurement of established EXIM figures, detailed analysis of the statistics,
primary survey of select industries and substantiating the results to arrive at the open cargo figures for
the port of Thankassery from the districts of Madurai, Theni, Tirunelveli, Virudhunagar and
Kanyakumari. The methodology undertaken for arriving at the indicative cargo possible from Tamil
Nadu has been indicated in a step wise manner below
1. Step 1 – Procurement of Export / Import statistics
We procured established export and import statistics for the districts of Madurai, Theni, Tirunelveli,
Virudhunagar and Kanyakumari for the cargo handled through Tuticorin port from a consultancy
firm based in Tuticorin. The statistics were for all commodities imported and exported through
containers and bulk & break-bulk facilities for the financial year 2006-07, 2007-08 and 2008-09 from
the port of Tuticorin.
2. Step 2 – Basic analysis of the EXIM data
The process involved re-categorizing the export (5,000 line items for containers only) and import
(3,000 line items) data for the five districts into 8-10 major categories for each districts to facilitate
further analysis of data. The next step involved identification of top cargo categories and top EXIM
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players using PIVOT table functionality. The idea was to use the concept of Pareto efficiency (80/20
rule) to make the primary survey effective and efficient.
3. Step 3 – Primary Survey
The primary survey involved establishing contact and one-to-one meeting with top EXIM industry
players in the districts of Madurai, Theni, Tirunelveli, Virudhunagar and Kanyakumari. The idea was
to obtain first-hand feedback from the actual port users on their priorities and choices.
4. Step 4 – Detailed analysis of the feedback
This step involved quantifying the responses received during the primary survey from the EXIM
players. More importantly, the exercise involved correctly extrapolating the responses so received
to the entire population. The “Sample to Total Population Multiplier” was adopted for the same.
The multiplier is a numerical value which represents the ratio of the selected sample to the total
entire population. Two basic assumptions were made to correct the inherent errors of the multiplier
approach. Firstly for ‘multiplier more than two’, open cargo was taken at 50% as the sample is not
sufficiently representative of the total population. Secondly for ‘multiplier more than five’, open
cargo was taken as NIL as the sample is not representative of the total population and therefore
cannot be extrapolated to arrive at the open cargo figures.
5. Step 5 – Identifying the open cargo category, baseline figures and cargo forecasts
Based on above exercise the open cargo commodities which have the possibility for being imported
and exported from the proposed port of Thankassery were identified and baseline cargo figures
were established. The EXIM players are willing to divert their cargo through the port of Thankassery,
provided they achieve cost savings by undertaking such a step.
Commodity EXIM status Hinterland districts
Containerised baseline open figure (base year
2008-09)
Bulk / Break bulk
baseline open figure ( base year 2008-09)
in TEUs in Tonnes in Tonnes
Food / agricultural products & spices
Export Madurai, Kanyakumari
1,160 17,400
Textiles, yarns & fabrics
Export Madurai, Theni
1,520 22,800
Cement Import Madurai 1,067 16,000
Timber & wood Import Kanyakumari, Thirunelveli
128,000
Total 3,747 56,200 128,000
Table 10: Potential open cargo from Tamil Nadu hinterland
The inputs received from the EXIM players (of marbles and timber logs) which has resulted in the
inclusion as a potential cargo for the port of Thankassery is indicated below:
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Timber & wood
Sengottai in Tirunelveli district is the hub of timber saw mills and is almost equidistant from the port
of Thankassery and Tuticorin.
Sengottai alone imports around 1.2 lakhs of timber logs annually.
Given the proximity of Sengottai to Thankassery (almost 92kms), the possible diversion of timber
logs has been considered.
In addition, cargo for few of the timber importers from Nagercoil has also been considered as open
cargo.
Food / agri-products & spices
This category covers variety of food and agricultural products and spices as well. The main products
are maize, corn, chillies, onions, gherkins, papads, etc.
Concord Exports’ contribution to total food & agricultural products and spices exports from Madurai
district was 40% during the FY 2008-09. The port of choice for the Company depends on its
suppliers. The Company can consider using Kollam port provided the suppliers are ready to deliver
the goods at Thankassery port and the overall costs are lower vis-a-vis Tuticorin port.
Hence limited cargo is expected to be diverted to Thankassery port.
Cement
The major importers of cement from Madurai are S.S.N. Trading Company, Triumph Enterprises &
Investment Pvt Ltd, all companies managed by the same group. They together import 7,000 tonnes
of the total quantum.
Most of customers for the import consignment are based in Kanyakumari district of Tamil Nadu and
in Kerala state. And therefore the importers are keen about the prospects of using the Thankassery
port for their trade.
The matter of concern though would be the terrain. The presence of ghats can hinder the
movement of 40ft containers.
Textiles, yarns and fabrics
This category of exports from Madurai and Theni districts consists of cotton yarn, garments, fabrics,
made-ups, terry towels, etc.
There was a mixed response from the exporters in this category for use of the Thankassery port.
One of the major exporters (JVS Exports), though, has shown positivity for use of the Thankassery
port if they are able to realize cost benefits and if mother vessels berth at Thankassery. They
presently incur Rs. 3,000/- per truckload for transporting their good to Tuticorin port and any option
whereby they spend a lower amount is welcome.
Exporters in Theni district are skeptical of using the Thankassery port due to the difficult terrain
which they have to encounter on way to ports in Kerala.
Hence a modest estimate has been considered for diversion to Thankassery port.
3.7 Open cargo from primary and secondary hinterland The table depicts the summarized indicative base-line open cargo figures for the Thankassery port arrived from the previous sections
Page 38 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Description Container Traffic Bulk / Break-bulk Cargo
In TEUs In Tonnes In Tonnes
Primary Hinterland ( Kerala)
Kollam 24,485 386,720
Thiruvanthapuram 975 13,220
Idukki & Pathanamthitha
192 2,909
Kottayam 150 2,866
Coastal movement ( Clay)
2,000 30,000
Import cargo ( newsprint / wastepaper)
440 5,280
Coastal movement ( Cement)
1,100,000
Coastal movement ( sand)
72,000
Import cargo ( finished ferilizers - Urea & Muriate of Potash)
125,000
Import cargo ( timber logs)
48,000
Indicative open cargo from Kerala ( primary) hinterland - A
28,243 440,995 1,345,000
Secondary Hinterland ( Tamil Nadu)
Export cargo 2,680 40,200
Import cargo 1,067 16,000 128,000
Indicative open cargo from Tamil Nadu ( secondary) hinterland - B
3,747 56,200 128,000
Total indicative open cargo from the identified hinterland of Kerala and Tamil Nadu ( A + B)
31,989 497,195 1,473,000
Table 11: Total open cargo from primary and secondary hinterland
The statistical validation of data to arrive at the likely estimate of traffic at Thankassery port has been
indicated in Annexure – 2.
3.8 Indicative traffic projections. In order to have a clear perception of the traffic projections, the results of the primary survey conducted
were tabulated. The tabulation was done on a drill down approach viz. the cargo was initially broadly
classified based on its origin i.e. from primary or secondary hinterland. The primary / secondary
Page 39 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
hinterland commodities were later further classified into import / export cargo and subsequently into
containerized and bulk / break bulk commodities. By undertaking such a drilled down approach, it would
be easy to understand the source of the cargo generation and facilitate in providing an easy overview of
the growth projections of the identified commodities.
Uniform growth rate has not been applied to the containerized cargo (for the purpose of traffic
forecasting), since each containerized commodity has its own peculiarity. In addition, the possibility of a
containerized commodity being diverted to Thankassery also depends on various regional factors and
the same has to be accounted for during the forecasting exercise.
For the determination of the projected traffic the following methodology was adopted:
As the first step the commodities identified by the process of primary survey were classified into
import / export / coastal cargo and subsequently into containerized and bulk / break bulk
commodities groups
The major factor in deciding the commodities that could be identified as cargo have already
been detailed in the previous sections.
Based on the trend analysis and the future expansion plans of the industries and the likely
increase in the development of industries, the growth rates for high, medium and low scenarios
of each of the cargo were identified. These growth rates are indicated in Annexure -3
The future growth of each commodity was analyzed based on its historical growth trends,
Central / State government’s assistance towards a particular commodity‘s production/ exports,
regional development which may have an effect (positive / negative) on the imports of a
particular commodity, competition from existing and upcoming ports in the region, etc.
The rationale for the cargo growth for the major potential commodities is derived in Annexure -4
and the consolidated traffic projections under the low, medium and high scenario is indicated in the
subsequent sections.
3.8.1 Low traffic scenario
Table 12: Consolidated traffic growth in tonnes ( Low growth scenario)
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Table 13: Containerised traffic growth in TEUs (Low growth scenario)
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3.8.2 Medium traffic scenario
Table 14: Consolidated traffic growth in tonnes (medium growth scenario)
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Table 15: Containerised traffic growth in TEUs (medium growth scenario)
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3.8.3 High Traffic Scenario
Table 16: Consolidated traffic growth in tonnes (high growth scenario)
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Table 17: Containerised traffic growth in TEUs (high growth scenario)
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3.8.4 Summary of the traffic projections
Total traffic (both bulk and containerized) in '000 Tonnes
2015 2020 2025 2030 2035 2040
Low 2,024 2,215 2,445 2,695 2,966 3,275
Medium 2,207 2,718 3,388 4,255 5,343 6,806
High 2,306 3,073 4,140 5,596 7,505 10,281
Only containerized traffic in TEUs
2015 2020 2025 2030 2035 2040
Low 37,122 40,429 44,992 50,298 56,548 63,773
Medium 43,568 51,863 62,907 77,173 95,364 118,300
High 44,332 55,879 70,574 89,208 115,293 149,651
Based on the detailed analysis of the macro and micro economic scenarios, the medium growth scenario
has been decided as the base case for cargo. The entire port planning subsequently has been
undertaken considering the above mentioned scenario of traffic. (Please see chapter 5 on port planning
for details).
3.8.5 Comparison between total cost of transporting containers to
Cochin by road and through coastal shipping
Comparative analysis of transportation costs of containers by road to Cochin Port and likely costs
through the proposed port at Thankassery to Cochin port forms an important part of the feasibility
analysis. From a generalised cost perspective, we have considered the following broad level costs:
- Inland Transport Costs
- Port Charges
- Sea Transport Costs
Results of the analysis along with explanatory notes have been given below.
Kollam hinterland
In Rupees Sr. No
Activity Cochin Port by
Road
Activity Cochin port via proposed
port at Kollam
1 Road freight movement till Cochin
11,000 Road freight movement till Kollam
2,000
Page 47 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Sr. No
Activity Cochin Port by
Road
Activity Cochin port via proposed
port at Kollam
2 CHA Charges / customs clearance at Cochin Port
1,500 CHA Charges / customs clearance at Kollam
1,500
3 Terminal Handling Charges at Cochin Port
4,955 Terminal Handling Charges at Kollam
2,500
4 Coastal Sea Freight - Coastal Sea Freight (Kollam- Cochin)
4,000
5 Transshipment charges - Transshipment charges
3,309
6 Documentation charges 1,500 Documentation charges
1,500
7 Storage charges ( if required)
2,000 Storage charges ( if required)
2,000
8 Total 20,955 Total 16,809
Table 18: Comparative cost of exporting One TEU from Kollam to Cochin port by Road vis-a-vis though
the proposed Thankassery (Kollam) cargo terminal
Average Road Transport Cost of a TEU from factory premises to Cochin Port obtained from industry sources. In case of current road movement to Cochin Port, the rates mentioned are the to & fro charges incurred by the transporters i.e. the empty container movement from container yard at Cochin Port to Kollam and the loaded container movement from the factory at Kollam to Cochin Port. For coastal movement from Kollam-Cochin Port, empty containers are assumed to be available in Kollam.
Total logistics cost from Kollam to Cochin Port per TEU = Rs. 20,955
Total logistics cost Kollam - Thankassery (road) and Kollam - Cochin (coastal) = Rs.16,809
Potential savings per TEU = Rs.4,146
Trivandrum hinterland
In Rupees
Sr. No
Activity Cochin Port by Road
Activity Cochin port via proposed
port at Kollam
1 Road freight movement till Cochin
14,500 Road freight movement till Trivandrum
5,082
2 CHA Charges / customs clearance at Cochin
1,500 CHA Charges / customs clearance at Jaigad
1,500
3 Terminal Handling Charges at Cochin Port
4,955 Terminal Handling Charges at Kollam
2,500
Page 48 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Sr. No
Activity Cochin Port by Road
Activity Cochin port via proposed
port at Kollam
4 Coastal Sea Freight - Coastal Sea Freight (Kollam- Cochin)
4,000
5 Transhipment charges - Transhipment charges
3,309
6 Documentation charges 1,500 Documentation charges
1,500
7 Storage charges ( if required)
2,000 Storage charges ( if required)
2,000
8 Total 24,455 Total 19,891
Table 19: Comparative cost of exporting One TEU from Trivandrum to Cochin port by Road vis-a-vis
though the proposed Thankassery (Kollam) cargo terminal
Average Road Transport Cost of a TEU from factory premises to Cochin Port obtained from industry sources. In case of current road movement to Cochin Port, the rates mentioned are the to & fro charges incurred by the transporters i.e. the empty container movement from container yard at Cochin Port to Trivandrum and the loaded container movement from the factory at Trivandrum to Cochin Port. For coastal movement from Kollam-Cochin Port, empty containers are assumed to be available in Kollam.
Total logistics cost from Kollam to Cochin Port per TEU = Rs. 24,455
Total logistics cost Kollam - Thankassery (road) and Kollam - Cochin (coastal) = Rs.19,891
Potential savings per TEU = Rs.4,564
Coastal movement from Gujarat to Kerala
In Rupees
SSr. No
Activity Cochin Port by Road
Activity Cochin port via proposed
port at Kollam
1 Coastal shipment charges from Mundra to Cochin
38,000 Coastal shipment charges from Mundra to Kollam
40,000
2 CHA Charges / customs clearance at Cochin Port
1,500 CHA Charges / customs clearance at Thankassery
1,500
3 Terminal Handling Charges at Cochin Port
4,955 Terminal Handling Charges at Thankassery Port
2,500
4 Documentation charges 1,500 Documentation charges 1,500
5 Storage charges 2,000 Storage charges 2,000
6 Inland transportation to Inland transportation
Page 49 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
SSr. No
Activity Cochin Port by Road
Activity Cochin port via proposed
port at Kollam
to
6-a Trivandrum 14,500 Trivandrum 5,082
6-b Kollam 11,000 Kollam 2,000
7 Total Total
7-a Trivandrum 62,455 Trivandrum 52,582
7-b Kollam 58,955 Kollam 49,500
Table 20: Comparative cost of exporting One TEU from Trivandrum to Cochin port by Road vis-a-vis though the proposed Thankassery (Kollam)
The coastal shipment charges from Gujarat to Kerala have been obtained from industry sources.
Total logistics cost per TEU from Gujarat to Trivandrum hinterland via
coastal movement through Cochin Port
: Rs. 62,455
Total logistics cost per TEU from Gujarat to Trivandrum hinterland via
coastal movement through Thankassery (Kollam) Port
: Rs. 52,582
Potential savings per TEU : Rs. 9,873
Total logistics cost per TEU from Gujarat to Kollam hinterland via coastal
movement through Cochin Port
: Rs. 58,955
Total logistics cost per TEU from Gujarat to Kollam hinterland via coastal
movement through Thankassery (Kollam) Port
: Rs. 49,500
Potential savings per TEU : Rs. 9,455
Accordingly, for EXIM related shipments which are presently moving from Kollam and Trivandrum region
to Cochin, Thankassery port can be positioned as an ideal feeder port and can save the shipper the costs
associated with the inland transportation to the tune of Rs. 4,500 per TEU. For the coastal cargo
commodities flowing from Gujarat to Kerala, Thankassery port can serve as a gateway port for the
commodities meant for Southern Kerala , which would result in an indicative savings of around Rs.
9,500/-
Thankassery port can hence facilitate in reducing the overall logistics cost associated with the
movement of cargo and can be positioned as a feeder / coastal port complementing the operations of
the existing ports.
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4. Site investigations
4.1 Geographical setting Thankassery is situated in Kollam District about 70 km north of Thiruvananthapuram and 150 km south
of Kochi (Latitude of 8o 52’ 35” N and Longitude of 76o 34’ E). The bay lying east of the Thankassery point
is the site for the Port. The comparatively deeper hydrography of the Thankassery area along with the
flourishing economic activity the old Kollam town made Thankassery an important Port along the west
coast of India in older times. The land side of the Port area is within the limits of Kollam Corporation,
which has an area of 57.31 km2 with a population of 361,441 (Census 2001) in 78,182 households.
Geographically Kollam represents a sample slice of what Kerala is. The west of Kollam is a long wide
coastline facing the Arabian Sea, while the eastern edge of Kollam district is hilly, and gradually merges
into the fringes of Western Ghats. The plane midland lies between the western coastal strip and the hilly
eastern region. Kollam town, where a large majority of the cashew manufacturing units of Kerala are
situated, is only about 7 kms away from Thankassery port.
Figure 4 : Overview of the Kollam Port area
There are two breakwater structures to facilitate port operations. The seaward breakwater is 2100
meters in length and the leeward breakwater is 500 meters. The port is also equipped with a 144 ft. light
house built in 1902. The Thankassery light house is a major tourist attraction.
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Prolific fishing activity exists in the vicinity including the east shore of the calm basin. There are two
auction houses located on the shore. There is good amount of boating / fishing near the sea shore closer
to the entrance channel also. This will necessitate development plans to accommodate the fishing
activity so that the fishing community can co-exist with port operations.
There are quite a few dwelling units on the sea shore. This area is earmarked for acquisition, which may
be possible without much of resistance as plans are afoot to shift the inhabitants to nearby apartments
as part of the Tsunami Rehabilitation Programme. The Port is outside the normal path of the tropical
cyclones and hence a “Safe Port”. There has been no history of “anchor dragging” even in foul weather.
4.2 Land The total land available in the port complex is about 42,400 sq.m (10.6 acres), which has been utilized
for various activities and utilities as given below
Berthing area - 2064 sq.m
Loading / Unloading area - 2990 sq.m
Storage area - 20,220 sq.m
Building and utilities - 629 sq.m
Internal roads and miscellaneous areas - 16,497 sq.m
4.3 Connectivity
4.3.1 Roads
The Kollam district is well connected to other parts of Kerala and India through the NH-47, NH-220 and
NH-208. The National Highway 47 covers a distance of 57.4 km in the district and is only 2kms from the
Thankassery port. The National Highways NH-208 (Kollam - Shencottai) and NH 220 (Kollam - Theni)
originate from Kollam.
Figure 5 : Kollam district road network
Source : Maps of India
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The State Highways namely, Main Central Road, Kollam-Shencottah Road and Punalur-Pala-
Muvattupuzha (Main Eastern Highway) with a total length of 266.52 kms also network the district. The
double-lane coastal road from Thankassery to Vadi is in progress and shall run parallel to the sea shore.
In terms of the connectivity with the Thankassery port, the following four options exists –
1. From Port gate to Althnamoodu junction and which goes to Cochin
2. From Port gate to Beach and then to Trivandrum. From the beach, there is a road proposal coming
up , the road is proposed as part of the coastal road connectivity.
3. From Port gate via Kochuplamoodu junction and then to Police camp. From the Police camp Jn to
NH-47 to Trivandrum .
4. From Port gate to Kochuplamoodu junction to Chinnakada round about (which is the Main city
centre for Kollam). The road will be for Trivandrum / Cochin and Tamil Nadu via Thankasei
The detailed analysis of the road connectivity options as surveyed during the road profiling survey is
indicated in section 5.13.
4.3.2 Rail
Kollam is an important railhead of the
Southern Railways. The Kollam railway
station is considered to be one of the
biggest railway stations in Kerala state after
Shornur and Palakkad junctions. The district
is covered by 132 km of railway tracks, of
which 51 km are broad gauge and 81 km
metre gauge.
The Trivandrum-Ernakulam line, which goes
via Kottayam and Alappuzha, passes
through Kollam. Kollam is the terminal
junction of Madras-Egmore-Kollam metre
gauge line.
Figure 6 : Kollam district road network
Source : Maps of India
The metre gauge track is being converted to broad gauge under project Unigauge and is presently
closed. The new BG line is expected to open during the year. As regards the Thankassery port, the
shortest distance between Railway lane and shoreline is 1 Km. However there are lot of buildings and no
vacant land.
4.3.3 Inland waterways
Kollam is well-connected through waterways with other parts of Kerala and this stands to the advantage
of the Thankassery port. The Centre has declared the Kollam-Kottapuram stretch of West Coast Canal,
along with Champakara and Udyogmandal Canals (205 km) in Kerala, as National Waterway No 3 (NW3).
The extension of the NW3 to Kovalam and further to Colachel is under its active consideration. The
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National Waterway standard will require acquisition of land to widen the canal at some places and
dredging and rehabilitation of cross structures like bridges.
Figure 7 : The existing water canal and rail line near Thankassery port
Source: Atlas Survey Engineering System , Kollam
The detailed route profile map to the Thankassery port is enclosed as Annexure. - 5
4.3.4 Air connectivity
Kollam district at the moment does not have direct air connectivity. The Trivandrum International
Airport is the nearest airport and is approximately 65 kms away from the Thankassery port.
4.4 Topography Laterite formations extending to the sea are noticed at the Thankassery and nearby areas
predominantly on the northern side. A shallow stretch of rocky formation extending southwards as a
groyne is also reported. In general, sand with shell contents is noticed above the hard stratum, with
slight clay content. The general topography of Kollam Corporation area is flat with a moderate slope and
the altitude varies from 0 to 10 m above Mean Sea Level (MSL). The gradually sloping terrain towards
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west favors natural drainage. The coastal plain below the 7.5 m contour and is characterized by marine
landforms of beach ridges, beaches, swamps and lagoons. The topography and the contour map of the
port area is enclosed as Annexure 6.
4.5 Bathymetry
The Hydrography department of the Government of Kerala has been conducting bathymetric surveys at the area covering approach channel and entrance channel area including the basin inside the harbour regularly. Based on the details available in the bathymetric charts of Oct 2007, it is found that minimum bed level of 6.1 is available in front of the wharf, basin area, entrance channel and approach channel. A comparison of the depths available as per 2000 chart and the charts of the earlier years reveals no significant siltation in the operational areas .
Copy of the bathymetric chart dated 13/10/2007 is enclosed as an Annexure 7
4.6 Geo technical conditions The borehole details made available by Harbour Engineering Department based on actual bore results at
pile locations number 3 and 15 of cargo wharf are given in Annexure 8. The summarized details are as
follows: -
Borehole data at Pile number 3
The bed level is at -7.50 m and the strata from sea bed for a depth of 11.0 m consists of fine sand
with very high SPT (Standard Penetration Test) N values varying from 35 to 70. The strata below top
sand layer of about 2.0 m thickness consist of sand -clay mixture.
The strata below consists of soft to medium clay with SPT (N) values varying from 4 to 10 and the
clay layer continues upto -37.00 m, with thickness of 17.00 m. The founding strata consists of white
laterite with N values in excess of 112 with thickness of about 3.00 m.
Borehole data at pile no 15
The soil stratification at pile location number 5 is almost same as that observed at pile location
number 3 with minor variation in thickness of sand / sand clay / clay layers.
4.7 Tide and wave data
4.7.1 Tides
Based on the observed details regarding tide levels, collected from the Hydrography Office at Kollam and the secondary data , the tide levels at Kollam are expected to be as under –
MHHW - +1.30 m
MLHW - +1.20 m
MSL - +0.90 m
MHLW - +0.80 m
MLLW - +0.40 m This is with reference to Chart Datum 00
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4.7.2 Wave
The coastal waters off Thankassery are influenced by waves approaching from the North West, with
average wave heights during fair weather season (September to May) normally less than 1m.
Predominant waves during Southwest monsoon are from South West to West, 50% of which are
between 1.5m to 2.5m and 30% between 2.5m and 4.6m. With the Arabian Sea becoming rough during
monsoons, the off-shore wave heights also occasionally reach between 5m & 6m with corresponding
wave periods of 8-10 sec.
Due to the construction of break water, of 2.1 km length , the wave effect from South West direction
during monsoons will be reduced considerably and the wave height inside the harbour will be less than
0 .3 m normally and 0.5 m occasionally in extreme weather condition. Therefore near tranquil conditions
are considered inside the harbour and waves will not have any significant influence on berthing and
loading / unloading operations at the berths.
4.7.3 Currents
Since near tranquil conditions exist in the harbour, the influence of current is negligible.
4.8 Environmental data The section below depicts an overview of the environmental site conditions. A Rapid Environmental
Impact assessment undertaken by Centre for Environment and Development, Trivandrum and the
report of their findings is enclosed as Annexure 9.
4.8.1 Physical environment
Climate
The climate of the region is tropical humid, with an oppressive summer and plentiful seasonal rainfall.
The hot season, lasting from March to May, is followed by the south west monsoon from June to
September. The north east monsoon occurs from October to November.
The rest of the year is generally dry. The average annual atmospheric temperature of the area is 27o C,
and the annual temperature range is 27.8o to 33o C as a maximum and a range of 22.3 to 26.1o C as a
minimum. The South-West monsoon provides heavy and reliable rainfall with the average annual rainfall
about 3100 mm, within an average of 115 rainy days. The monthly mean value of relative humidity
varies from 75-96% in the morning (08:30 hrs) to 65-91% in the afternoon (17:30 hrs). Winds from North
West prevail during November to January and South East winds during May to August. Excessive rain
during June to August causes frequent floods in the rivers and canals in the area, submerging low-lying
areas.
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Water environment
The major source of drinking water is through piped distribution network of Kerala Water Authority (KWA) and from wells. The pipe network suffers from heavy leakages due to aged piping. The network’s inadequate carrying capacity coupled with instances of unauthorized connections put an unwarranted strain on the system. The present per capita availability of water to Kollam is about 40 lpcd.
Ashtamudi Lake, the second largest wetland of Kerala recognized under Ramsar International Treaty for
Wetland Protection, is the nearest surface water source about 5 km from the Port location. It is a
brackish water lake connected to Lakshadweep Sea and the movement of water is influenced by the
tidal action.
Ground water in the Corporation area occurs under confined and semi confined conditions. The course,
porous and permeable layers of laterite form aquifer system. The main recharge to groundwater takes
place from precipitation. There are number of open wells exists around the site and these open wells
are mainly used for domestic purpose. Depth of ground water level ranges between 1.50m to 6.20m
below the ground level. The directional flow of ground water is mainly from west to east.
Air environment
The air environment of Thankassery region is very clean and pleasant because there are not many
influencing factors. The number of industries as well as that of vehicles is considerably small. It is found
that Sulphur dioxide (SO2), Oxides of Nitrogen (NOx) and Suspended Particulate Matter (SPM) levels of
the City is much below the stipulated limit.
Noise
The major source of sound pollution in the city is the vehicles and indiscriminate use of loud speakers.
The sound level was found to be below the limits prescribed for Commercial category all over the city
area. Ambient noise level in the Kollam city region is relatively higher than the limits prescribed for
residential area by the Central Pollution Control Board.
Land environment
The study area consists of mainly three land use types – Residential built up land, Coconut plantations,
and areas with coconut and other mixed crops, with a few vacant lands. There are some patches of
vegetable cultivated land. Major use of urban land is classified under residential use, which includes not
only the area occupied by the houses, but also the coconut gardens around the house as well.
4.8.2 Ecological resources
Coastal environment
The 590km length Kerala coast faces the Arabian Sea. The coastline of Kerala is more or less straight
trending in NNW-SSE direction from north till the Thankassery headland near Kollam. The coastline
orientation south of Thankassery is in the NW-SE direction. The offshore continental shelf bathymetry is
steeper to the south.
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Terrestrial environment
No forest, wild life sanctuaries or other environmentally sensitive area is near to the project site and no
rare or endangered species have been reported from the region. No mangrove or wet land or turtle
nesting sites is observed at or near to the site. Cultivated plants like Cocos nucifera, Mangifera indica,
Thespesia populnea, Tamarindus indica, Artocarpus heterophyllus, Casuarina equisitifolia, etc., are very
common around the site. Although Kollam retains extensive backwater systems its wetlands have been
extensively damaged by reclamation for coconut growing and foreshore developments.
Consequently, Kollam has the lowest proportion of mangroves in the State’s dwindling wetland
resources. No endangered or endemic plant species were recorded in the region. The project site is not
situated within or adjacent to any cultural heritage sites, protected areas, buffer zones of protected
areas, or special areas for protecting biodiversity.
4.8.3 Socio-economic environment
The main activity in the region is fisheries and significant income is generated by fishing activities. One-
third of the State's fish catch is from Kollam region. An assessment of city economic development and
urban growth indicates a decadal population growth rate of 4.45 percent, which is lower than the
State’s urban population growth rate (1991-2001).
To evaluate the socio-economic aspects of the local fishing community, informal consultations were
carried out covering all the fishermen hamlets in the area. The survey results indicate that the majority
of local community strongly favors the construction of a Port. A few people expressed their
apprehensions over sharing of the resources of the fishing harbour.
Tourism
Thankassery region is aesthetically beautiful and culturally rich with few famous churches. Thankassery
is a place of historical importance situated 5 km away from Kollam town. The Churches here are pretty
old, having been established in the 18th century. The vast silent stretch of windy beach shore is an
attraction of Thankassery region. The chief attraction of the place is the light house, built in 1902. The
144 ft. light house stands as a sentinel, warning seamen of the treacherous reefs of Thankassery.
Thankassery was an enclave of the Portuguese, Dutch and British in succession and the remnants of the
Portuguese and Dutch forts still exist. The Portuguese fort is believed to be built in 1517 and only one
wall of this fort remains now. Tourists visiting Kollam are often attracted towards the beaches. The
average tourist arrivals are to the tune of 85,000 domestic tourists and 15,000 foreign tourists (Source:
District Tourism Promotion Council, Kollam).
4.8.4 Coastal Regulation Zone (CRZ)
Restrictions were imposed on developmental activities on coastal areas by introducing the Coastal Regulation Zone Notification in 1991 under the authority of the Environment (Protection) Act 1986. Coastal stretches of sea between the Low Tide Lines and High Tide Lines and up to 500 meters on the landward side from High Tide line and up to 50 meters from the bank or width of the creek, river or backwater whichever is less will come under the regulated zone. For imposing restrictions, the coastal area is classified into four zones viz:
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1. CRZ I – Areas that are ecologically sensitive and in the area between High Tide Line and Low Tide Line;
2. CRZ II – Areas that have already been developed up to or close to the shoreline; 3. CRZ III – Areas that are relatively undisturbed which does not fall under CRZ I or CRZ II; and 4. CRZ IV – Coastal stretches in the Andaman & Nicobar, Lakshadweep and small islands.
According to the notification, Coastal Zone Management Plan for Kerala was prepared demarcating the Coastal Regulation Zone in the State, which was approved in 1996. Under the approved Coastal Zone Management Plan, coastal stretches of all the Corporations of the State fall under CRZ II and developments in CRZs require the approval of the Central / State Coastal Zone Management Authority.
4.8.5 Environmental risk assessment and management plan
Potential adverse environmental impacts during construction and operation phase were predicted based on available information. An Environment Management Plan (EMP) aiming to minimize, and wherever possible eliminate, the damaging effects of Port development were developed.
Sr.
No.
Environmental Attributes Project Activity Nature of Impact
1. Landscape Land Reclamation
Construction work
Transportation
Minor degradation
Minor degradation
Minor degradation
2. Ground water resource Civil works No major effect
3. Water Quality Waste Disposal
Oil Leakage
Major impact
Major impact, but
infrequent
4. Air Quality Transportation
Civil Works
Unpleasant Smell of fish
Temporary effect
Temporary effect
Permanent effect
5. Noise Quality Dredging & Reclamation
Civil Works
Transportation
Working Phase
Temporary impact
Temporary impact
Temporary impact
Permanent impact
6. Natural Vegetation Site Clearing
Permanent impact, but not
significant
7. Natural Fauna Construction works
Site clearing
Permanent impact, minor
Permanent impact, minor
8. Transportation Increased access for
transportation of Port
Degradation due to
emission of exhaust from
transportation vehicles and
vessels
10. Economy Increased economic
activities
Financial status of the local
people as well as
government will improve
11. Tourism During the construction
& operational phase
Negative, but minor
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Sr.
No.
Environmental Attributes Project Activity Nature of Impact
12. Employment During the construction
& operational phase
Positive
13. Aesthetic During the construction
& operational phase
Will alter the scenic beauty
14. Hazard During the construction
& operational phase
Chances of fire and
occupational hazards
Table 21: Project activities and its impacts
Source: Centre for Environment and Development, Trivandrum
Some of the mitigation measures planned aimed to minimize, and wherever possible eliminate, the
damaging effects of development have been indicated below:
1. Green Buffer Zones, wherever possible, should be encouraged in and around the port area.
2. Dredging and reclamation operations should be undertaken only where it can be conclusively
proved that these are required for operation purposes related to the activities permissible under
Coastal Regulation Zone Notification.
3. Best practicable technology and operating methods should be used for dredging / reclamation to
minimise adverse environmental impact.
4. Screening of the pollutants in the harbour waters should be undertaken and periodical reports and
water quality parameters should be forwarded to the concerned State Pollution Control
Board/Committee at least once in six months.
5. Some special arrangements wherever necessary for dusty cargo can be made to avoid pollution.
4.9 Utilities
4.9.1 Power
The Kallada hydroelectric station, situated in Kollam district, has the capacity to generate 15.00 MW
power. The power supply in Kollam district is facilitated through a network of substations of varying
capacities. The extensive network of sub-stations in Kollam district ensures availability of ample quality
power to the all locations in the district. The listing of the same as on 31.03.2008 is mentioned
hereunder:
Sr. No Name of substation Voltage level
1. Edamon 220 KV
2. Kundara 220 KV
3. Ambalappuram 110 KV
4. Kavanadu 110 KV
5. Kottarakkara 110 KV
6. Kottiyam 110 KV
7. Punalur 110 KV
8. Sasthamcotta 110 KV
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Sr. No Name of substation Voltage level
9. Ayathil 66 KV
10. Ayoor 66 KV
11. Chavara 66 KV
12. Karunagappally 66 KV
13. Parippally 66 KV
14. Pathanapuram 66 KV
15. Chengamanadu 33 KV
16. Ezhukone 33 KV
17. Kadackal 33 KV
Table 22: Sub-station network in Kollam district
Source : http://www.kseboard.com/generation_frame.htm
4.9.2 Water
Water supply is the prerogative of the Kerala Water Authority. Water supply to the entire Kollam district
is met by purifying the water from the Sasthamkotta Lake. The lake is located at a distance of 30 kms
and has a capacity to hold 22390 million litres of water. It serves as the source of drinking water for half
a million people of Kollam district. The source of water is from the underground sprouts.
The Sasthamkotta Lake, is a large freshwater lake in Kerala. The lake is surrounded on three sides by
hills, and on the south side a bund separates the lake from the neighboring rice fields. The lake was
designated a wetland of international importance under the Ramsar Convention in November 2002.
4.9.3 Telecommunications
The Bharat Sanchar Nigam Limited is the major telecom facilitator in the district. The service provided
includes Basic Wired Land line telephones with all phone plus services, fixed wireless telephone,
Wireless loop with limited mobility, Cellular mobile services, intelligent network, with several services
like the India Telephone card, Electronic PABX & Telex/Telegraph services.
In addition to BSNL, Reliance Infocom also provides WLL service in the district. Cellular operators, viz.
BPL Mobile, Escotel, AirTel, etc also operate in the district.
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5. Port planning
5.1 Introduction
A port layout defines the physical location of the main facilities required to effectively handle the port
traffic. Hence flexibility should be built in for the port layout as much as possible such that the port can
accommodate future changes in the cargo and the new development opportunities.
As Thankassery port is already a planned port, the facilities created therein are evaluated on the normal
parameters of port planning and are presented here.
5.2 History of the port operations Kollam is one of the oldest ports in the country, the history of which in all probability dates back to as
early as 8th century AD or even before. The Chinese traders were one of the oldest foreign communities
to settle in Kollam. That was the period when Kollam evolved as a major trade center (of spices) and an
important port along the Malabar coast.
Popularly referred to as “Kurakkeni Kollam” in classical literature, it is considered by Keralites as the
greatest boon of nature. It is outside the normal path of the tropical cyclones and hence a “Safe Port”.
This ancient Port was very active up to 1970. Soon, thereafter, port activities and cargo operations were
shifted to the fishing cum cargo
harbor at Neendakara. However,
thanks to the recent
development initiatives of the
Kerala Government, Kollam port
is now receiving and handling
cargo vessels, although on a very
small scale. The newly-
commissioned Kollam port
received its first cargo vessel, MV
Anakuri, on June 16, 2009. It
carried sand and gravel, meant
for construction activity, from
Kollam to Male.
Figure 8 : Loading / Unloading operations for MV Anakuri
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5.3 Existing Port Facilities The existing facilities at Kollam port include a wharf, breakwater, godowns, storage yards and other port
infrastructure like barges, forklift, tug, etc. The
wharf is 177 meters long (inclusive of the extension,
which was completed in early March 2010) and the
draft is around 6.3 meters. The entrance channel is
350 meters wide and the draft at the entrance is 11
meters. The basin area is approximately 100
hectares, with depth which varies between 4 meters
to 10 meters. The port presently has an area of 10
acres which includes two godowns of 1450 sq.mts.
each, a concrete yard with an area of 16000 sq.mts.
and a 3 acre yard which is yet to be developed.
Additionally, work is under progress for
development of two transit sheds, water tank, and
ground level sump for water supply scheme. The
detailed port layout of the existing facilities is indicated in Annexure - 9
5.4 Planning methodology For the development of the port layout from a long term perspective, the major parameters to be
looked at are:
1. Site and marine conditions which involve:
Topography
Bathymetry
Geotechnical conditions
Marine conditions such as wind, wave and currents
Coastal morphology
Littoral transport
Hinterland connectivity
Physical constraints and opportunities
2. Port facility requirements are:
Berth requirements
Governing vessel size
Storage area requirements
Requirements of dredging
Port craft
Navigation aids
3. Criteria for planning involves:
Marine operational criteria
Tranquility requirements
Vessel turning circle
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Port access channel
Deck elevation
5.5 Strategy for project planning In a typical PPP port related project, the private developer is required to invest a substantial amount of
time and resources in establishing the infrastructure for commencing port operations, while the
government provides the waterfront and other hand holding related support. In this respect, the port of
Thankassery is very much unique, since the State Government has already established facilities at the
port.
This would provide the private developer a ready-made infrastructure set-up which would facilitate him
to commence commercial operations from Day 1. Accordingly the envisaged port planning focuses on
the optimum utilization of the existing facilities to its full capacity. It is only when the capacity of the
existing facilities is fully utilized that the private developer would be required to plan and install
additional infrastructure for catering to the cargo traffic.
The referred strategy would be a win-win situation to both the private developer as well as the state
government. For the private developer, due to the initial low investments required to augment the
existing facilities, his risks to that extent would substantially be reduced. This in turn would spur many
professional entities to bid for managing and operating the port facilitating the state government in
selecting the most competent private developer.
Accordingly the port planning exercise had been divided into the following phases -
Phase 1 – The planning objective of the referred phase would be to utilize the existing facilities to its
full capacity. In this regards, the private developer would be required to augment the existing
infrastructure by:
Providing mechanical material handling equipment / cranes etc
Strengthening existing facilities
Facilitating connectivity (with active support of the state government)
Improving the storage requirements
Managing the port operations
Phase 2 – When the cargo volumes exceed the capacity of the existing infrastructure, a separate
wharf is proposed in the port area towards North/East direction.
5.6 Port layout
5.6.1 Additional infrastructure in Phase I
The total length of the existing wharf (inclusive of the extension) is now 177 m and the width is 12 m.
The wharf has available draught of 6.30 m but the structure is designed for a draught of 10.00 m after
dredging, where by vessels of size upto 15,000 DWT can be directly berthed at wharf.
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As per details made available, the wharf structure is designed for a uniformly distributed load of 3.50
tonne per square meter and no other loading has been considered towards material handling cranes /
equipments operating on the wharf deck.
The wharf is protected from wave effect by seaward breakwater of 2100 m long and leeward
breakwater of 500 m long. Considering cargo to be handled in initial years consisting of containers and
bulk / break bulk in non containers common material handling machinery in the form of mobile cranes
are considered to handle all types of cargo.
As the deck is not designed for these crane loads, it is proposed to increase the deck slab thickness of
entire wharf deck, with extension by about 8.00 m towards land. The increase in vertical loads on piles
will be marginal and within the safe capacity of pile. The capacity of existing wharf including extension
with above strengthening would be utilized to the maximum extent possible.
A container stocking yard utilizing area marked for container yard for storage of TEUS is provided. The
installed capacity of wharf with the above strengthening would be around 3.60 million tonnes per
annum and actual capacity utilized would be 2.70 million tonnes per annum with operating efficiency of
75%. Considering above, the phase II would be required to be commissioned by year 2020 when cargo
volumes exceed 2.70 million Tonnes per annum.
5.6.2 Infrastructure in Phase II
Phase II is planned to be commissioned by year 2020. A separate wharf of dimensions 200.0 m long X
20.0 m wide is proposed in the port area towards North/East direction which will be mainly for handling
container cargo with higher capacity cranes than those considered in Phase I with increase in cargo
handling rate by about 25 to 30%.
In this phase , around 20 hectares of land has been earmarked for future extension . This is proposed to
be developed by reclamation upto deck level of wharf with shore protection using rubble bund using of
required sizes of stones as per the design. The area so developed will be utilized for container / bulk/
break bulk/ other cargo stored separately with provision for both open / covered storage as per the
need.
After commission of new wharf mainly for containerized cargo, the existing wharf will be used for
handling bulk and other cargo of comparatively less weight. After addition of second wharf, the installed
capacity would get increased to about 7.60 million tonnes per annum and actual capacity utilization
would be about 5.7 million tonnes per annum with operational efficiency of 75%.
The above handling capacity are considering proper road network for smooth evacuation of cargo from
port to the destination as well as to bringing cargo from other destinations without any kind of hold ups
in movement of vehicular traffic.
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Figure 9 : Indicative port planning layout
The detailed port layout drawing has been indicated as part of Annexure 10
5.7 Port facility requirements
5.7.1 Governing vessel size
The Thankassery port is planned considering dredging in future upto -10.0 m level thereby allowing the
vessels upto 9 m draft at all tides. Considering this the vessels of size upto 15,000 dwt can be
maneuvered inside the harbour and berth at the existing wharf structure.
At present the depths available at wharfs and inside the harbour are about -6.5 m to -7.0 m, which will
allow vessels having draft upto 5.5 to 6 m to operate in the harbour. This will allow vessels of size 6,000
to 7,000 dwt to berth at all tides.
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5.7.2 Berths availability and requirements
As indicated in the previous section, the size of berth in Phase I is 177 m with a width of around 12 m.
The installed capacity of wharf with the above strengthening would be around 3.60 million tonnes per
annum and actual capacity utilized would be 2.7 million tonnes per annum with operating efficiency of
75%.
In Phase II, a separate wharf 200.0 m long X 20.0 m wide is proposed in the port area towards
North/East direction.
5.7.3 Dredged depth at berths
At present the depth available in front of the existing wharf is -6.5 to -7.0 m. However the wharf is
designed for a dredged bed level of -10.0 m.
5.8 Planning criteria
5.8.1 Tranquility requirements
The existing harbour is a fair-weather, protected from the influence of waves by the two break waters
and near tranquil conditions exists in the harbour. Therefore no further tranquility aspects are required
to be considered.
5.8.2 Marine operational criteria
The port will be a direct berthing port for coastal vessels and ships of size ranging from 6,000 DWT to
15,000 DWT. The maneuvering inside the port area will be done using tugs of required bollard pull which
may be between 12 tonnes to 20 tonnes. For smaller vessels the fishing trawlers operating in the port
area could be used instead of a tug for pilotage.
5.8.3 Turning circle
The basin inside the harbour covering an area of 1250 m by 800 m having a depth of 6.5 m is sufficient
for turning of the vessels inside the harbour. Therefore no separate turning circle is required to be
provided.
5.8.4 Storage area levels and berth elevation
As the entire port areas as well as the existing approach roads are at uniform elevation, it is proposed to
keep the elevation for entire port complex as well as storage areas at the existing elevation of wharf. In
view of proposed strengthening of the existing wharf by providing additional thickness of slab of 0.7 to 1
m, the other areas and new wharf level will be matched by sloping run with gradual gradient.
Page 67 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
5.9 Planning consideration
5.9.1 Width of channel
Considering the vessel size contemplated, the existing width of the entrance channel is more than
adequate (350 m wide).
5.9.2 Depth of channel
The depth of channel at present is 6.5 meter, which will be increased to -10.0 m if dredging is required
to be carried out in berthing areas in future for bigger size vessels.
5.10 Navigational aids Considering the width of entrance channel defined by the breakwaters and the light house , no special
navigational aids are necessary except the marker buoys for defining the navigational channel in the
centre of entrance channel and to be further extended in the approach channel.
5.11 Cargo handling equipment In Phase- 1, the equipments for cargo handling are considered common for both general cargo, bulk
cargo and containerized cargo in the form of mobile cranes or fixed cranes of 20 tonnes capacity with a
radius of about 20 m . For Phase -2, while the facilities provided in Phase -1 will continue to be used on
existing wharf. The new container wharf will be provided with container handling cranes moving on rails
with a capacity of 25 tonnes at a radius of 25 to 30 m.
5.12 Land requirements As per the land use plan given in Annexure 10, the existing land area including developed land by
reclamation works out to about 60 acres which is considered sufficient for various activities of the ports
and the storage requirements of Phase 1 and Phase 2 with provision for additional requirements in the
future.
5.13 Constrains in port operations Traffic considerations
Based on the detailed traffic study conducted and the cargo estimates in low, medium and high
scenarios the maximum demand expected at Kollam (Thankassery) port are as under –
In Million Tonnes
2015 2020 2025 2030 2035 2040
Low 2.0 2.2 2.4 2.6 2.9 3.2
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2015 2020 2025 2030 2035 2040
Medium 2.2 2.7 3.3 4.2 5.3 6.8
High 2.3 3.0 4.1 5.5 7.5 10.2
Cargo handling considerations
The existing wharf including extension and additional container wharf proposed in Phase 2 with
matching cargo handling machinery will have installed capacity to handle 7.6 million tonnes per annum
and operating capacity 5.7 million tonnes per annum is sufficient to handle the cargo requirements as
per the demand forecast under medium scenario. Therefore on the considerations of demand and the
cargo handling capacity, the port is capable of handling 5.7 million tonnes of cargo with operational
efficiency of 75% of installed capacity of 7.6 million tonnes per annum.
It will be possible to achieve the capacity given above, provided the evacuation of cargo as well as
handling of incoming cargo is possible with the existing road network augmented by additional
dedicated four lane road corridor from the port complex upto a suitable point on the National Highway
– 47 connecting Trivandrum and Cochin.
A note detailing out the route profiling as under taken by Atlas Survey Engineering System covering the
various evacuation options is given below which will have to be given serious considerations and to be
incorporated as part of development plan of Kollam city and surrounding areas in consultation with
urban development authorities of Government of Kerala.
Road evacuation options
During the topography and route profiling exercise, 4 road routes which seemed suitable enough for the
smooth transportation of freight were surveyed. Following are the findings of the exercise
1. From Port gate to Ammachiveedu junction -
One road starts from the gate of the port to Ammachiveedu junction which is 1,832 metres long.
Through this road, freight can be transported via NH 47 to Kochi without touching Kollam City
Traffic. But the width of this road upto 630 metres is only 7 metres. Beyond 630 metres till
1150metres the road width is varied from 10 to 13 metres. Beyond 1,150 metres till the end of this
road i.e. Ammachiveedu junction the width is about 12 metres and it is also straight. There are lots
of residential buildings on both sides of this road. The level difference between the said
Ammachiveedu junction and the wharf is 4.5 metres.
2. From Port gate to Beach and then to Trivandrum -
The second road starts from the port via Kochupilamood junction ends near Kollam Beach. This is
nearly 1,935 metres long and the road continues from there via Varkala along the coast to
Thiruvananthapuram. The said coastal road is now under construction. The width of this road from
the beginning upto 200 metres is 5 metres and there is a school, church and other residential
building on both sides. The remaining 1,735 metres there are a lot of buildings on the right side and
on the left side are filled with slums and other type of buildings.
Kollam canal also passes by the left side of this road. This road is nearly 8 metres wide (varies from 8
to 10 metres). There is a narrow bridge existing at Kochupilamood junction and it has been given to
Page 69 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
understand that Public Works Department, Kollam is proposing to construct a new bridge. The level
difference between the said beach side road and wharf is 3.14 metres.
3. From Port gate via Kochuplamoodu junction and then to Police camp
The third road starts from the Kochupilamood junction to Police Camp junction which is 860 metres.
Through this road, freight can be transported via NH 47 to Thiruvananthapuram without touching
Kollam City traffic. Width of this road is nearly 14 metres and it is also straight. There are big
buildings on both sides. The level difference between the said police camp junction and the wharf is
7.5 metres.
4. From Port gate to Kochuplamoodu junction to Chinnakada round about (which is the Main city
centre for Kollam).
The fourth road starts from the Kochupilamood junction ends near Chinnakada roundabout which is
1,140 metres long. Through this road freight can be transported via NH 208 to Thengassi, Tamilnadu.
But this road is direct link to Kollam City. The width of this road is 14 metres and it is straight. There
are lot of shops in both sides. The level difference between the said Chinnakada roundabout
junction and the wharf is 8 metres.
Page 70 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
6. Cost estimates
6.1 Capital cost estimation The State Government of Kerala had the foresight to tap the potential of Thankassery for the
development of a port and had accordingly invested in phase wise manner over a period of time to
develop the region into a coastal / feeder gateway terminal. The investments incurred as on March 1st
2010 for the development of the Thankassery port by the State Government of Kerala is indicated in the
section below.
6.1.1 Cost incurred by the State Government for the development of
Thankassery Port
The sector wise cost incurred for the various structures at Thankassery Port are –
Note – The cost incurred have been obtained from the Harbour Engineering Department
1. Works under Fisheries Department
S.
No.
Costs incurred In Million Rs. Year of construction
1. Construction of Main break water – 2100
metres
Under Tsunami programme – 500 metres
Funded by Central Govt. – 50%
State Govt. – 50%
295.00 Initial work on the breakwater
commenced in 1990 and
around 1,450 meters of
breakwater was completed in
1996.
The balance of the breakwater
work was again started in
1996 and completed in 2001
2. Strengthening of Break water – Funded by
Asian Development Bank
107.40 Done in 2008-09 F.Y
Total actual cost 402.40 Table 23: Project cost incurred under Fisheries Department
2. Works under ASIDE Scheme of Ministry of Commerce & Industry
S.
No.
Costs incurred In Million Rs. Year of construction
1. Extension of wharf 72.30 The work on the extension of
the existing wharf commenced
in September 2008 and is
expected to be completed by
end of March 2010
2. Road and retaining wall 44.50 Work had commenced in
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S.
No.
Costs incurred In Million Rs. Year of construction
September 2008 and as
ongoing but started in Sept
2008
3. Yard development 61.20 Of the total work envisaged,
around 50% has been
completed in March 2009 at a
cost of Rs. 20.2 million
Three ( 3) more acres have to
be developed and around Rs.
41.0 million has been allotted
for the same, taking the total
cost for yard development to
Rs.61.2 million
Total actual cost 178.00 Table 24: Project cost incurred under ASIDE scheme of Ministry of Commerce & Industry
3. Works under State Government (Port Sector) under State Plan Scheme
S.
No.
Costs incurred In Million Rs. Year of construction
1. Construction of wharf 54.10 The construction of the wharf
was completed in November
2006
2. Road, compound wall, drains etc. 18.20 The construction of the said
structures was completed in
March 2009
3. Water supply 7.60 Work for water supply
commenced in September
2009 and as on march 2010,
the works were still in
progress
4. Renovation of old godown 3.30 The renovation of old godown
was completed in 2009
5. Electrification of yards 7.00 The electrification of yards
was started in January 2010
and is expected to be
completed by end of March
2010
Total actual cost 90.20 Table 25: Project cost incurred under State Government (Port sector)
Page 72 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
4. Works under Tsunami Rehabilitation Programme under port sector
S.
No.
Costs incurred In Million Rs. Year of construction
1. Transit shed 7.10 Completed in January 2010
2. Port road 8.10 Completed in January 2010
3. Dredging cost 24.80 Work in progress, to be
completed by end March 2010
Total actual cost 40.00 Table 26: Project cost incurred Tsunami rehabilitation programme under port sector
5. Summary of the costs incurred by the State Government of Kerala
Scheme / State Plan In Rs. million
Fisheries sector 402.40 5
ASIDE scheme 178.00
Port sector under state plan 90.20
Port sector under Tsunami Rehabilitation Programme 40.00
TOTAL COSTS 710.60 Table 27: Summary of the project cost incurred by the State Government of Kerala
6.1.2 Additional planned costs for development of the Thankassery port
The envisaged port planning takes into consideration the existing facilities already developed by the
State government and the current work-in-progress which the State Government is expected to
complete before the prospective private developer is selected. The immediate focus is to utilize the
existing infrastructure created by State Government and then invest further, especially in machineries
and equipment, to complete the port which can handle the envisaged cargo.
Port planning is done with the focus that only when the capacity of the existing facilities is crossed, that
the additional infrastructure would be planned. Planning and subsequently investments for the
additional facilities is a function of the projected cargo growth and accordingly, investments in a phase
wise manner have been indicated to cater to the envisaged cargo volume that would be expected at
Thankassery port. The phasing and the cost estimates for the additional facilities is indicated below:
ITEM TITLE ESTIMATED COST
Phase-1
( till 2020)
Phase-2 ( 2020 onwards)
Total
1
LAND
1.1 Private/ Government 0.00 0.00 0.00
5 For the purpose of the financial projection, the cost of breakwater has not been taken into account
since it would make the project unviable.
Page 73 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
ITEM TITLE ESTIMATED COST
Phase-1
( till 2020)
Phase-2 ( 2020 onwards)
Total
2
SURVEYS
2.1 Land Survey 0.00 0.25 0.25
2.2 Confirmatory Geotechnical Investigation 0.00 0.75 0.75
2.3 Confirmatory bathymetric & other surveys for navigation. 0.60 0.00 0.60
3
SITE DEVELOPMENT
3.1 Strengthening/ widening of existing approach 36.00 40.00 76.00
3.2 Reclamation over existing land area upto roal level 0.00 41.00 41.00
3.3 Shore protection 0.00 54.00 54.00
3.4 Internal Roads 40.00 58.00 98.00
4
MARINE STRUCTURES
4.1 Strengthning of existing wharf including extension 36.00 0.00 36.00
4.2 New multipurpose wharf 0.00 500.00 500.00
4.3 Jetty in breakwater side 0.00 0.00 0.00
4.4 Fixtures/ fittings 1.60 3.00 4.60
5
ACCESS TO PORT AREA
5.1 Gate complex 1.80 1.40 3.20
5.2 Fencing/ compound wall 2.80 3.00 5.80
6
BUILDINGS
6.1 Control room cum administrative building 0.00 0.00 0.00
Rail 0.00
6.2 Rest room & canteen 4.50 4.20 8.70
6.3 Pump house 0.90 0.00 0.90
6.4 Substation building & generator room 1.10 0.00 1.10
6.5 Misc structures 1.50 1.70 3.20
7
WATER
7.1 Supply from local board 0.00 0.40 0.40
7.2 Storage & distribution 0.00 2.40 2.40
8
FIRE FIGHTING
8.1 Fire fighting equipments & accessories 1.60 0.00 1.60
9
SURFACE WATER & DRAINAGE
9.1 Storm water drainage system 0.60 0.75 1.35
10
ENVIRONMENTAL CONSIDERATIONS
10.1 Cost for Environmental Considerations 1.20 0.00 1.20
11
MECHANICAL - MATERIAL HANDLING EQUIPMENT
11.1 Cranes/ forklifts 200.00 210.00 410.00
12 VEHICLES/ EQUIPMENTS
Page 74 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
ITEM TITLE ESTIMATED COST
Phase-1
( till 2020)
Phase-2 ( 2020 onwards)
Total
12.1 Transportation Through
subcontract
13
ELECTRIFICATION & INSTRUMENTATION
13.1 Electrical installation & distribution 20.00 25.00 45.00
14
COMMUNICATION
14.1 Communication network 0.50 0.50 1.00
15
DREDGING
15.1 Dredging (Provisional) 0.00 190.00 190.00
15.2 Navigational Aids 0.00 3.80 3.80
16
TUGS & OTHER FLOATING CRAFT
16.1 Tugs & floating crafts Through
subcontract
17
PROFESSIONAL FEES
17.1 Project reports & approvals 6.00 10.00 16.00
17.2 Detailed engineering and project monitoring 4.00 16.50 20.50
17.3 Other professional fees 0.50 1.25 1.75
18
MISC. COSTS & CONTINGENCIES
18.1 Misc costs 2.50 3.25 5.75
18.2 Contingencies 36.30 78.85 115.15
Total Estimated Project Cost Rs. 400.00 1250.00 1650.0
0
Table 28: Additional project cost envisaged for development of Thankassery port
The existing land can be leased to the SPV at the market values. For the purpose of calculation, the lease
rental has been taken as Rs. 7.3 million per annum6.
6 This is based on the current market value of the land being Rs. 2 crore per acre and considering 11 acres, the cost
of the land is Rs. 22 Crore ( Rs. 220 million). Assuming that the concessionaire period is for 30 years, we have the figure of Rs. 220 million / 30 years i.e Rs. 7.3 million per annum.
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7. Determination of tariffs
7.1 Overview of port tariffs The proposed port at Thankassery shall price its services competitively in order to provide a cost feasible
logistics gateway to its end customers. The tariffs so determined are different for coastal vessels and for
foreign going vessels. The tariffs for containers and general cargo consist of two major components,
namely:
Vessel related charges
Cargo related charges
7.1.1 Vessel related charges
The vessel related charges includes port dues, pilotage charges and berth hire charges as illustrated in
table below (These rates shall differ for containerized cargo and general cargo):
Type of vessel related charges Unit of measurement
Port dues INR/GRT
Pilotage INR/GRT
Berth hire charges INR/GRT/Hour
Table 29: Vessel related charges
7.1.2 Cargo related charges
The cargo related charges for containerized cargo shall consist of the following components as shown in
the table below:
Particulars Unit of measurement (UOM)
Laden containers Empty containers
Handling charges
Between ship and container yard
Between container yard and CFS
Between container yard and truck INR/TEU INR/TEU
Average wharfage charges INR/TEU INR/TEU
Table 30: Cargo related charges
Similarly, the cargo related charges for bulk and dry-bulk cargo shall consist of the following
components as shown in the table below:
Particulars Unit of measurement (UOM)
Average wharfage charges INR/ton
Composite handling charges INR/ton
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Table 31: Cargo related component charges
7.1.3 Tariff regulatory framework
The major ports in India are administered under the Major Ports Trust Act of the Union Government.
The tariff is set by the Tariff Authority for Major Ports (TAMP). Thankassery being a non-major port is
being administered by the Directorate of Ports, Government of Kerala, which shall be vested with the
powers for tariff setting and review. The tariff rates for the Thankassery port will be determined by the
Special Purpose Vehicle Company ( SPVC) which will be set up with an equity stake of the Government
of Kerala as well as the Private Developer and will be governed from time to time by the state
government through the Directorate of Ports.
7.2 Tariff determination The schedule of port charges for Thankassery has to be fixed in such a way that it creates a win-win
situation for both the users and developers. The Consultants derived cues from the various vessel and
port related charges that the competing ports in the vicinity are charging and subsequently used most
suitable values in the financial model to check for feasibility. The tweaking of rates has been done
without compromising on the returns that has to be ensured for the private developer.
Heading Cost parameter Unit of
Measurement Container vessels
Vessel related charges
Port dues Rs. per GRT 4.00
Pilotage charges Rs. per GRT 5.00
Berth hire charges Rs per GRT per hour or part thereof
0.10
Cargo related charges
Wharfage charges Rs per TEU 250.00
Cargo handling charges Rs. per TEU 250.00
Table 32: Tariff for container vessels
Heading Cost parameter Unit of
Measurement Bulk vessels < 12,000 GRT
Vessel related charges
Port dues Rs. per GRT 4.00
Pilotage charges Rs. per GRT 5.00
Page 77 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Heading Cost parameter Unit of Measurement
Bulk vessels < 12,000 GRT
Berth hire charges Rs. per GRT per hour or part thereof
0.10
Cargo related charges
Wharfage charges Rs per MT 25.00
Cargo handling charges Rs. per MT 15.00
Table 33: Tariff for bulk coastal vessels
These rates are only indicative in nature and the respective maritime authority shall take a final decision
on this. The above rates shall undergo revision once in every three years with a 20% increase factored in
at the time of revision.
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8. Financial analysis
8.1 Introduction This chapter provides the financial analysis and financial projections for the investments proposed in the
earlier chapter. Accordingly the NPV and IRR calculations have been carried out and the overall financial
projections have been projected for a period of 30 years from 2011to 2040. The financial projections
show the financial performance and position over the investment horizon.
8.2 Identification of revenue streams
8.2.1 Traffic forecasts
The traffic projection of cargo for the port has been done for high, medium and low case scenarios.
Considering the macro-economic scenarios, the hinterland profile and the possibility of competition that
can be faced by the port; the medium case scenario has been used as the base case for financial
modeling. The table below shows the summary of the traffic assumed for financial forecasting.
Year Bulk ( Mn Tonnes) Container ( Mn Tonnes) Total Cargo ( Mn
Tonnes)
2015 1.527 0.680 2.207
2020 1.904 0.814 2.718
2025 2.398 0.989 3.387
2030 3.040 1.215 4.255
2035 3.839 1.504 5.343
2040 4.937 1.868 6.8057
Table 34: Projected traffic for financial modeling8
8.2.2 Tariffs
The tariffs form the second part of the revenue stream assumptions. The tariffs for cargo have been
determined keeping in view the competing ports that share the hinterland with Thankassery port. The
7 The traffic for the purpose of the financial projections for the year 2040 has been capped at 5.7 million tonnes
based on 75% of the capacity of the berth. 8 Cargo having a tonnage of greater than 20 tonnes per TEU has been excluded from the financial projections. This
is primarily because the material handling equipment so considered in the financial projections have a capacity to handle around 20 tonnes per TEU.
Page 79 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
port operations are based on coastal and feeder operations and keeping this in view, the tariff design
has been kept simple. Also the stevedoring and handling operations are expected to be outsourced.
The proposed schedule of port charges is given in the previous chapter.
8.3 Assumptions of investment and expenditure
8.3.1 Investment in capacity development
As indicated in the earlier sections, the additional infrastructure would be planned only when the
capacity of the existing wharf is fully utilized. To that extent, investment would be infused to strengthen
the existing infrastructure and additional investments would be made in a phase wise manner to cater
to the envisaged cargo growth. The existing investments and the phase wise investment expected
(excluding IDC / pre-operative expenses) in the future is detailed out in the previous chapter and the
summarized details has been indicated below:
Sr No Phase Time frame considered Amount in Rs. million
1 Existing infrastructure9 Till 2020 308.20
2 Phase I Till 2020 400.00
3 Phase II From 2020 onwards 1,250.00
Total 1,958.20
Table 35: Summary of phase wise investment details
8.3.2 Debt / equity financing assumptions
The assumptions pertaining to financing of the project are valid for all the phases. It is assumed that the
investment would be completed in the same year and the debt servicing would be possible from the first
year of operation itself
Assumption Description Unit
Debt percentage 70%
Equity margin 30%
GoK’s share in equity 49%
Developer’s share in equity 51%
Cost of long term secured debt 10%
Cost of equity 13%
Interest on Unsecured loan 8%
Margin money for Working Capital 40%
Interest on Working Capital 11%
Debt repayment period 10 years
Moratorium period 2 years
Construction period for Phase II 2 years
Working capital – Average receivables 0.5 month
9 The same is excluding the costs incurred by the Fisheries Department
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Working capital – Average payables 0.5 month
Table 36: Debt / financing options
Note:
1. IDC is not considered separately as it is included in the preoperative expenses;
2. In case of deficiency in cash balance the same will be made good by way of interest free
unsecured loans from promoters
8.3.3 Operations and maintenance expenses
The annual operating and maintenance costs including costs incurred on repairs can be best estimated
separately on each relevant component of the above estimated costs. For this purpose, the following
factors need to be taken into consideration:
Life of each type of infrastructure / equipment / asset
Nature / frequency of repair works required
Nature / frequency of maintenance works required
The efficiency of operations conducted
A realistic assessment of the operations and maintenance cost however often proves difficult as it varies
from project to project depending on the actual use of the equipment and the works, maintenance
standards, workforce employed and the local environment. As a practical approach the annual O&M
expense is fixed as a percentage of the capital expense. The expenses related to operations other than
O&M have been fixed as a percentage of the gross revenues.
Given the above, the table below shows such percentages assumed for the purpose of estimation of the
repairs and maintenance and admin and operating costs. The percentage of repairs and maintenance
will vary as the equipments become old and need more attention than in the early years.
As mentioned above, the operating and maintenance expenses are estimated as a percentage of
revenue and capital expenditure respectively. The Table below shows these percentages.
Sr.
No.
Description Operations & Maintenance
1 Repairs and Maintenance 0.5% of the total project cost
between 2011 to 2015
1% of the total project cost between
2016 to 2020
1.5% of the total project cost
between 2021 to 2030
2.0% of the total project cost
between 2031 to 2040
2 Selling, general & administrative expenses 5% of total revenue
3 Variable operating costs-cargo related & others 10% of total revenue
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Sr.
No.
Description Operations & Maintenance
4 Cargo handling charges using port facilities (
outsourced) - bulk
30% of cargo handling revenue
5 Cargo handling charges using port facilities
(outsourced) - container
30% of cargo handling revenue
6 Pilotage expenses – outsourced 70% of pilotage revenue
7 Lease rental for land Rs.7.33 million per annum
8 Number of administrative and managerial staff 15
9 Average salary per annum of managerial staff Rs. 0.475 million per annum
10 Average salary per annum of support staff Rs. 0.225 million per annum
11 Per annum increase in cost of salary 5%
Table 37: Operation and maintenance percentage
8.3.4 Royalty payment to the Government of Kerala
The royalty payments that are expected to be paid to Government of Kerala are as per the Table 38
below:
Description Rate (% of total revenue)
Full waterfront royalty to GoK - dry cargo 12
Full waterfront royalty to GoK – containers 12
Table 38: Waterfront royalty to GoK
8.3.5 Port related assumptions
The assumptions relating to overall port operations are as under:
Sr.
No.
Description Port related assumptions
1. Number of month in which port will
remain operational
12 months
2. No. of operational days in a year 270
3. No. of operational hours per day 16 hours
4. No. of shifts per day 2
5. Installed capacity of port - Phase I 3.6 mn. tonnes per annum
6. Increase in installed capacity of port in
the year 2020- Phase II
4.0 mn. tonnes per annum
7. Total installed capacity of port Phase I
& II
7.6 mn. tonnes per annum
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Sr.
No.
Description Port related assumptions
8. Available operational capacity as a
percentage of installed capacity
75%
9. Operational capacity Phase I & II 2.7 mn. Tones (phase I) plus 3 mn. Tonnes (Phase II)
= Total 5.7 million tones per annum
10. Loading / Unloading rate per hour for
Bulk cargo
Initially 450 MT, from 2020 & onwards 900 MT
11. Loading / Unloading rate per hour for
containerized cargo
Initially 16 TEUs, from 2020 & onwards 32 TEUs
12. Berthing time per ship – Bulk 15.33 hours
13. Berthing time per ship Container 14.50 hours
14. Size of vessel calling at port – Bulk Initially 8,000 GRT, from 2020 & onwards 15,000
GRT
15. Size of vessel calling at port – Container Initially 8,000 GRT, from 2020 & onwards 15,000
GRT
16. Average parcel size of vessels calling at
port – Bulk
Initially 6,000 MT, from 2020 & onwards 12,000
GRT
17. Average parcel size of vessels calling at
port – Container
Initially 200 TEUs, From 2020 & onwards 400 TEUs
Table 39: Port related assumptions
8.3.6 Depreciation and tax expenses
The WDV rates applicable for income tax calculation and the SLM rates are tabulated as below:
Item SLM WDV
No. of years Rate %
Land & Land Development - 0%
Buildings 60 10%
Marine Structures 40 10%
Machinery and equipments 20 15%
Utility (Water, electricity, commn &
firefighting) 15 15%
Furniture & fixtures 15 15%
Capital dredging 60 10%
Table 40: Depreciation rates for various assets
Replacement of assets is not considered once the useful life of the asset is completed. Any replacement
of the asset that may be required will be done from internal accruals and current assets.
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The tax rate applicable for the project is as per the table below
Income tax rates Rates
Income tax - corporate tax 33.22%
MAT Rate 18%
Table 41: Tax rates
8.4 Financial projections Based on the assumptions and estimates, the profit and loss statement and cash flow statement for the
project were prepared.
8.4.1 Projected revenues
The projected total gross revenues for each phase are as per the table below
Rs. Million Year Revenues
2015 176.43
2020 423.20
2025 596.75
2030 1077.54
2035 1945.62
2040 2411.78
Table 42: Projected Gross Revenues
8.4.2 Profitability
In Rs. Million Year EBIDTA
2015 91.53
2020 253.17
2025 365.20
2030 689.53
2035 1525.75
2040 2273.77
Table 43: EBITDA
8.4.3 Financial indicators – NPV, IRR and DSCR
This section provides the overall financial analysis for the proposed investments. Accordingly the NPV,
IRR and the financial projections have been carried out for a period of 30 years. DSCR calculations have
been carried out for each phases from availing the debt till its repayment.
Page 84 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
While a positive NPV shows that the project as feasible, the purpose of the IRR calculations is to assess
whether the returns are adequately above the hurdle rate the stakeholders would have in mind in terms
of an adequate return on investment and the purpose of DSCR is to evaluate the overall debt payment
capability.
Following is the summary of these financial indicators:
Description Amount
Internal Rate of Return (IRR) in % 12.51
Net Present Value (NPV) in Rs. Million 205.09
Payback period in years 15
DSCR – Phase I 1.82
DSCR – Phase II 2.81
Table 44: Financial feasibility indicators
Detailed calculations of each of above financial indicators are given in Annexure 11
Page 85 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
9. Way forward
The Consultants propose the following recommendations to develop Thankassery port -
It is important for Thankassery port to pre-empt direct competition with existing major ports such as Cochin port and Tuticorin port as these ports already have huge volumes of business and state of the art infrastructure in place. Accordingly Thankassery should be positioned as a coastal port complementing the existing operations of Cochin Port and the proposed operations at Vizhingham port.
At present the depths available at wharfs and inside the harbour are about -6.5 m to -7.0 m , which will allow vessels having draft upto 5.5 to 6 m to operate in the harbour. This will allow vessels of size 6,000 to 7,000 dwt to berth at all tides. Hence in phase 1 it is proposed to commence operations using 6,000 to 7,000 DWT vessels with minimal investment as this option obviates the requirement for deep dredging. In other words, the huge capital and maintenance dredging costs is pre empted here. In phase 2 from 2020, the port would be able to handle 15,000 DWT vessels ( after dredging) considering the increased traffic.
The State Government has already done a significant amount of the effort over the period of years to provide a ready gateway facility. This obviously becomes a selling point for Thankassery port, since the prospective Developer can invest the minimum amount required for material handling equipment, strengthening of berth and other minor contingencies and this also minimizes the risk for prospective private developers who can start operations within two to three months of signing of the concessionaire agreement.
Having an existing infrastructure also offers the prospective developer to utilize the facilities to its optimum capacity. Accordingly the private developer can observe the traffic flow to the port for a period of 5 to 6 years and based on the prevailing circumstances can ramp up capacities. This provides the port developers a leeway in terms of port planning.
The evacuation of the cargo is a critical parameter for Thankassery port and hence it is necessary
that the existing road network is augmented by additional dedicated four lane road corridor from the port complex upto a suitable point on the National Highway – 47 connecting Trivandrum and Cochin. The port connectivity is to be incorporated as part of development plan of Kollam city and surrounding areas in consultation with urban development authorities of Government of Kerala.
With regards to the development of the rail connectivity to the Kollam ( Thankassery) port, presently the inland movement of the cargo type being generated from the hinterland identified for Thankassery port is mainly through road since the primary cargo generators are within the radius of 150- 200 kms from the port. Cargo generators in the secondary hinterland of Tamil Nadu for the Kollam port is expected to use the rail connectivity, though this cargo expected is not very significant due to the same being routed towards Tuticorin port. Presently, based on the cargo identified for the port, rail connectivity is not a pre-requisite. However, if such a connection exists, it will provide additional advantage to the project.
Page 86 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
The cost for the development of road connectivity and that of the rail (if required) should preferably be undertaken by the government for making the project feasible and attractive to a private developer . ( A detailed financial analysis has been undertaken on the various funding options ( i.e funding to be provided either by government or the private developer) and the findings of the same has been indicated as part of Annexure 13 )
Page 87 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Annexure 1 : Stakeholders contacted for the traffic survey
From primary hinterland (Kerala)
Trade Associations
Sr No Name of organization Place
1. Tea Trade Association Cochin
2. The Cochin Chamber of Commerce & Industry Cochin
3. Cashew Export Promotion Council of India Cochin
4. Coir Shippers’ Council Alleppey
Commodity Boards
Sr. No Name of organization Place
5. Rubber Board Kottayam
6. Tea Board Cochin
7. Coir Board Cochin
8. Coconut Development Board Cochin
9. Spices Board Cochin
10. Coffee Board Bangalore
Customs Entities
Sr. No Name of organization Place
11. Cochin Custom House Agents Association Cochin
12. Cochin Customs House Cochin
13. Cochin Clearing House Pvt Ltd Cochin
14. Paul Abrao & Sons Cochin
15. Aspinwall Cochin
16. Jai Narayana Shipping Cochin
17. Oriental EXIM Agency Cochin
Shipping Companies
Sr. No Name of organization Place
18. Shreyas Shipping & Logistics Mumbai
19. Seaways Shipping Limited Cochin
20. Caravel Logistics Chennai
21. Vikram Logistics Bangalore
22. Jindal Waterways Cochin
Industry / Companies
Sr. No Name of organization District Industry
23. Kerala Balers Alleppey Coir
24. William Goodacre & Sons India (P) Ltd Alleppey Coir
Page 88 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Sr. No Name of organization District Industry
25. Cocomats International Alleppey Coir
26. Ceyenar Chemicals Pvt. Ltd Kottayam Rubber
27. Midas Treads (India) Pvt Ltd Kottayam Rubber
28. Kailas Cashews Kollam Cashew
29. Rajan Cashew Co. Kollam Cashew
30. Lourdes Matha Cashew Industries Kollam Cashew
31. St. Paul’s Cashew Factory Kollam Cashew
32. Asiatic Export Enterprises Kollam Cashew
33. Vijayalaxmi Cashew Co. Kollam Cashew
34. Capithans / Veronica Marine Exports Kollam Marine Food
35. Indian Aquatic Products Kollam Marine Food
36. Kerala Minerals and Metals Ltd Kollam Titanium di-oxide
37. Indian Rare Earths Kollam Sillimanite / ilmenite
38. Kerala Ceramics Kollam Clays
39. D’Cruz Navigation Kollam Sand
40. Greenland Paper Mills Kollam Paper products
41. RPC Paper Mills Kollam Paper products
42. Travancore Titanium Products Ltd Trivandrum Titanium di-oxide
43. English Indian Clays Ltd. Trivandrum Clays
44. Terumo Penpol Trivandrum Blood bags
45. Kerala State Industrial Development Corporation Trivandrum Industrial Development
46. A V Marbles Trivandrum Marbles
47. Variety Marbles Trivandrum Marbles
48. Gemwood Cochin Wooden products
49. Bharat Petroleum Corporation Limited Cochin POL
50. Grasim Industries Mumbai Cement
51. ACC (Gujarat Ambuja Cement) Mumbai Cement
52. Sanghi Cement Ahmedabad Cement
53. Malabar Cements Alleppey Cement
54. Cochin Condiments Idukki Spices
55. Leo Exports Idukki Vehicles
56. Lords Flavours Idukki Spices
57. Kanan Devan Hills Plantation Idukki Tea
58. Harrisons Malayalam Ltd. Idukki Tea
59. Nagarjuna Herbal Concentrates Idukki Ayurvedic medicine
60. Eastern Condiments Idukki Spices & food stuff
Page 89 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
From secondary hinterland (Tamil Nadu)
Custom entities
Sr. No Name of organization District
1. MSE Lines Tuticorin
2. Aspinwall & Co. Ltd., Tuticorin
3. A.V. Thomas & Co. Ltd Tuticorin
4. M/s Cargomar Tuticorin
5. Chakiat Agencies Tuticorin
6. Expo Freight Pvt. Ltd. Tuticorin
7. J. M. Baxi & Co. Tuticorin
8. Fly Jac Logistics Tuticorin
9. Galaxy (TTN) Agencies Tuticorin
10. Glow Freight Logistics Pvt. Ltd. Tuticorin
11. Indo Lloyd Freight Tuticorin
12. M/s Kuehne + Nagel (P) Ltd. Tuticorin
ICDs / CFSs/ Logistics Service Providers
Sr. No Name of organization District
1. Container Corporation of India Ltd. Tuticorin
2. M/s Sanco Trans Ltd Tuticorin
3. St John Freight Systems Limited Tuticorin
4. Container Corporation of India Ltd. Madurai
5. Central Warehousing Corporation Coimbatore
6. Container Corporation of India Ltd. Tirupur
7. Tirupur Container Terminals Private Limited Tirupur
8. M/s SICAL Distripark Ltd Tuticorin
Industry / Companies
Sr. No Name of company District Industry
1. Peacock Apparels Pvt. Ltd. Madurai Textiles
2. Fenner (India) Ltd. Madurai Rubber
3. Thiagarajar Mills Ltd. Madurai Textiles
4. T V S Srichakra Ltd. Madurai Tyres
5. Global Poly Bags Inds. Ltd Virudhunagar Polyethylene bags
6. TVS Interconnect Systems Madurai Electrical switches
7. Vaigai Chemical Industries Madurai Food processing
8. JVS Export Madurai Made-ups, fabrics trading
9. S.S.N. Trading Company Madurai Cement trading
10. Triumph Enterprises and Investment Pvt.
Ltd.
Madurai Cement trading
Page 90 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Sr. No Name of company District Industry
11. Concord Exports Madurai Agri/Food exports
12. Dunite Rocks Pvt. Ltd. Madurai Granite
13. S. Jawaharlal & Co. Madurai Cement, timber trading
14. Aruna Alloy Steels Pvt. Ltd. Madurai Steel products
15. Prime Stones Madurai Granite
16. Sundaram Industries Ltd. Madurai Rubber
17. Sourz Agri Food Processing (P) Ltd. Dindigul Food processing
18. Arkay Rock Produce Pvt. Ltd. Madurai Granite
19. Madura Stones Pvt. Ltd. Madurai Granite
20. Kaltec Granites Pvt. Ltd. Hosur Granite
21. Rajah Green Fields Madurai Coir Pith
22. Standard Granites Virudhunagar Granite
23. Stanco Traders Virudhunagar Granite
24. Standard Match Co Virudhunagar Matches
25. The Mehta Industries Virudhunagar Slack & residual wax
26. Chellsons Packaging Pvt Ltd Virudhunagar PVC shrink film labels
27. Sripathi Paper & Boards Pvt Ltd Virudhunagar Paper & related products
28. Lovely Offset Printers Pvt Ltd Virudhunagar Books
29. Supreme Duplux Board Mills (P ) Ltd Virudhunagar Paper & related products
30. Metal Powder Co. Ltd Madurai Aluminium
31. Hi-Tech Arai Ltd. Madurai Rubber
32. Madura Coats Pvt. Ltd. Madurai Threads
33. Hari & Co Tuticorin Timber
34. Loyal Textiles Mills Ltd. Tuticorin /
Tirunelveli
Textiles
35. Vigneshwar Exports Tirunelveli Food processing
36. Harvell Cocopeat Tirunelveli Coco products
37. A to Z Tiles Park Tirunelveli Marbles/ Tiles
38. D Kamak Bathe Homes Tirunelveli Marbles / Tiles
39. Prabhat Saw Mills Tirunelveli Timber
40. Tata Coffee Limited Theni Coffee
41. Sigma Agro Derivatives (P) Ltd. Theni BBQ Briquette
42. Shri Renuga Textiles Ltd. Theni Textiles
43. Azaad Timber Theni Wood & timber
44. Kumar Dhall Mills Theni Agri/Food products
45. S. K. Aiyakkalai Nadar & Son Theni Agri/Food products
46. Sri Lakshmi Dhall Mills Theni Agri/Food products
47. Theni Guru Krishna Textile Mills (P) Ltd. Theni Textiles
48. NVS Agro Derivatives Theni Coir pith & products
49. M. Muthuraj (HUF) Theni Agri/Food products
50. Menaka Cotton Mills Ltd. Theni Textiles
51. Shri Renuga Soft-X Towels Ltd Theni Textiles
52. Geetha Timbers Ltd. Theni Wood & timber
Page 91 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Sr. No Name of company District Industry
53. Geetha Timbers & Plywoods Ltd. Theni Wood & timber
54. Srinivas Fine Arts Pvt. Ltd. Virudhunagar Paper
55. Universal Polybags Inds Virudhunagar Polyethylene bags
56. Vel Stonex Pvt. Ltd. Virudhunagar Granite
57. V T M Ltd. Virudhunagar Textiles
58. SFA Technical Creations (P) Ltd Virudhunagar Textiles/Garments
59. Ambica Cotton Mills Dindigul Textiles
60. Arkay Glenrock Pvt. Ltd Dindigul Granite
61. Int’l Agricultural Processing Pvt. Ltd. Dindigul Food processing
62. Bnazrum Agro Exports (P) Ltd. Dindigul Food processing
63. Tanmix Company Dindigul Chemicals
64. Veg N Table Food Processing Pvt. Ltd. Dindigul Food processing
65. Sai Cocopeat Export Pvt. Ltd. Dindigul Coir products
66. Bannari Amman Spinning Mills Ltd. / Shiva
Texyarn Ltd.
Dindigul Textiles
67. C A V Cotton Mills / Sangeeth Group Dindigul Textiles
68. G V G Paper Mills Pvt. Ltd. Dindigul Paper
69. Danalakshmi Paper Pvt. Ltd. Dindigul Paper
70. Sudhan Spinning Mills Pvt. Ltd. Dindigul Textiles
71. Gherkins Agro Exports (India) Pvt. Ltd. Dindigul Food processing
72. St. Roche Exports Kanyakumari Various
73. Nagammal Mills Ltd. Kanyakumari Textiles
74. Kanam Latex Industries Pvt. Ltd. Kanyakumari Latex products
75. APN Shell Craft Kanyakumari Seashells handicrafts
76. Kanyakumari Marine Foods Kanyakumari Fish export
77. V. V. Mineral Kanyakumari Minerals
78. M. S. S. Asan Exports Kanyakumari Agricultural products
79. Kumaran Fishnets Limited Kanyakumari Fishnets
80. Indian Rare Earth Limited Kanyakumari Minerals
81. Mercury Fishnet Limited Kanyakumari Fishnets
82. Suresh Marbles & Granites Kanyakumari Marbles
83. Thiraviyam Coco Products Kanyakumari Coco Products
84. Sabare & Co Kanyakumari Medicinal herbs
85. Jeyram Marbles Kanyakumari Marbles
86. Royal Marbles Kanyakumari Marbles
87. Shine Marbles Kanyakumari Marbles
88. Lebanon Christopher Enterprises Pvt Ltd Kanyakumari Timber
89. Jaya Timber Kanyakumari Timber
Page 92 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Annexure 2 : Statistical analysis of data for expected
traffic at Thankassery port
Methodology of traffic data collection
Deloitte followed a two pronged methodology for collection and validation of data for arriving at the
likely estimate of traffic data for Kollam Port. The research design adopted for this project was a two
stage process which consisted of
1. a Secondary Research of collecting all the available information and published data from
authentic sources in stage I and
2. a Primary Research based on a sample survey of key stakeholders in stage II
The data and information obtained in stage I (i.e. through Secondary Research) were screened rigorously
for correctness and appropriately filtered for purpose of quantitative analysis at a later stage. The
Primary Research was conducted in the primary and secondary hinterland of Kollam and involved
interviews of the major export / import oriented industries, trade associations and key stakeholders in
the potential development of the port at Kollam.
The inputs, qualitative as well quantitative, received through primary research were taken into
consideration for deriving assumptions on likely traffic and growth rate of traffic at Kollam port. The
data obtained from the Secondary Research was further seen and reviewed in light of findings and
inputs from the Primary Survey. Based upon the key findings, the data was qualitatively adjusted by
taking in account the various factors that could have a probable impact on the traffic that would be
handled at Kollam port.
The data so collected was analysed using different quantitative techniques which included measures
such as mean, proportion, standard deviation, outliers and appropriated statistical tools including
hypothesis tests.
The results for select commodities having a significant proportion of the traffic are furnished below
Statistical analysis of the data
In order to verify the validity of assumptions for expected traffic at Kollam port, we have used
hypothesis test for proportion. As the sample size was less than 30 and population deviation unknown,
t-distribution was used to test the hypothesis. In applying this test, it has been assumed that the data in
the population for each category follows Normal distribution. Even so, in some cases, the sample size
(number of respondents) being quite small limits the adoption of t-test for validation of proportion in
this manner. To remove that anomaly, we have taken weighted proportion instead of actual sample
proportion.
The findings and results for each category of cargo are tabulated separately for each category as follows:
Page 93 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Table 1: Hypothesis test for Food & Agri Processing Cargo from Madurai
Summary Statistics on Food & Agri Processing Cargo from Madurai
Particulars Value Units / remarks
No. of players in the category 42 Nos.
No. of respondents in the category 2 Nos.
Total Traffic 34736.14 tons
Traffic handled by Sample entities 14149.01 tons
Proportion of respondents saying yes for diverting traffic to Kollam
1.0 Sample proportion
Weighted proportion of respondents saying yes for diverting traffic to Kollam
0.4044 Weighted sample proportion
Estimate taken by Deloitte (Null hypothesis H0: p = 0.5) 0.5 Assumed proportion
Std. Error of estimate 0.3470 From sample
Calculated value of t statistic -0.2753 From sample
prob- value (significance) 0.8289 Far greater than 0.05
Note: While the sample size was only 2 respondents for this category, the two entities in sample
accounted for more than 40% of cargo for the category. Accordingly, we have estimated that 50% of this
traffic can be assumed to be diverted to Kollam port. Therefore, instead of taking the actual sample
proportion of 1.0 for hypothesis testing, we have taken weighted proportion of 0.4044 to validate the
assumption.
Result
As seen from the table, the prob-value for Null Hypothesis (H0: p = 0.5) to be true comes to be 0.8289. This value is far greater than the significance level of 0.05 and hence we can accept the Null hypothesis and accordingly expect 50% of traffic for this category to be diverted to Kollam Port.
Therefore, expected Traffic = 17368.1 (50% of 34736.14) tons
Table 2: Hypothesis test for Textile and related Cargo from Madurai
Summary Statistics on Textile and related Cargo from Madurai
Particulars Value Units / remarks
No. of players in the category 154 Nos.
No. of respondents in the category 13 Nos.
Total Traffic 27736.5 tons
Traffic handled by Sample entities 16220.5 tons
Page 94 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Proportion of respondents saying yes for diverting traffic to Kollam
0.7317 Sample proportion
Estimate taken by Deloitte (Null hypothesis H0: p = 0.75) 0.75 Assumed proportion
Std. Error of estimate 0.1231 From sample
Calculated value of t statistic -0.1624 From sample
prob- value (significance) 0.8737 Far greater than 0.05
Result
As seen from the table, the prob-value for Null Hypothesis (H0: p = 0.75) to be true comes to be 0.8737. This value is far greater than the significance level of 0.05 and hence we can accept the Null hypothesis and accordingly expect 75% of traffic for this category to be diverted to Kollam Port.
Therefore, expected Traffic = 20802.4 (75% of 27736.5) tons
Table 3: Hypothesis test for Textile and related Cargo from Theni
Summary Statistics on Textile and related Cargo from Theni
Particulars Value Units / remarks
No. of players in the category 17 Nos.
No. of respondents in the category 7 Nos.
Total Traffic 9057.2 tons
Traffic handled by Sample entities 8505.3 tons
Proportion of respondents saying yes for diverting traffic to Kollam
0.2614 Sample proportion
Estimate taken by Deloitte (Null hypothesis H0: p = 0.30) 0.30 Assumed proportion
Std. Error of estimate 0.1661 From sample
Calculated value of t statistic -0.2322 From sample
prob- value (significance) 0.8240 Far greater than 0.05
Result
As seen from the table, the prob-value for Null Hypothesis (H0: p = 0.30) to be true comes to be 0.9474. This value is far greater than the significance level of 0.05 and hence we can accept the Null hypothesis and accordingly expect 30% of traffic for this category to be diverted to Kollam Port.
Therefore, expected Traffic = 2717.2 (25% of 9057.2) tons
Page 95 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Table 4: Hypothesis test for Rubber Export
Summary Statistics on Rubber Export
Particulars Value Units / remarks
No. of respondents in the category 5 Nos.
Total Traffic from Hinterland 27978 tons
Traffic handled by Sample entities 1220 tons
Proportion of respondents saying yes for diverting traffic to Kollam
0.0526 Sample proportion
Estimate taken by Deloitte (Null hypothesis H0: p = 0.053) 0.053 Assumed proportion
Std. Error of estimate 0.0998 From sample
Calculated value of t statistic -0.0041 From sample
prob- value (significance) 0.9969 Far greater than 0.05
Result
As seen from the table, the prob-value for Null Hypothesis (H0: p = 0.053) to be true comes to be 0.9969. This value is far greater than the significance level of 0.05 and hence we can accept the Null hypothesis and accordingly expect 5.3% of traffic for this category to be diverted to Kollam Port.
Therefore, expected Traffic = 1482 (5.3% of 27978) tons
Table 5: Hypothesis test for Rubber Import
Summary Statistics on Rubber Import
Particulars Value Units / remarks
No. of respondents in the category 4 Nos.
Total Traffic from Hinterland 22160 tons
Traffic handled by Sample entities 9850 tons
Proportion of respondents saying yes for diverting traffic to Kollam
0.0629 Sample proportion
Estimate taken by Deloitte (Null hypothesis H0: p = 0.063) 0.063 Assumed proportion
Std. Error of estimate 0.1214 From sample
Calculated value of t statistic -0.0004 From sample
Page 96 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
prob- value (significance) 0.9996 Far greater than 0.05
Result
As seen from the table, the prob-value for Null Hypothesis (H0: p = 0.063) to be true comes to be 0.9996. This value is far greater than the significance level of 0.05 and hence we can accept the Null hypothesis and accordingly expect 6.3% of traffic for this category to be diverted to Kollam Port.
Therefore, expected Traffic = 1396 (6.3% of 22160) tons
Table 6: Hypothesis test for Cashew Kernels
Summary Statistics on Cashew Kernels
Particulars Value Units / remarks
No. of respondents in the category 6 Nos.
Total Traffic 70000 tons
Traffic handled by Sample entities 27931 tons
Proportion of respondents saying yes for diverting traffic to Kollam
0.9474 Sample proportion
Estimate taken by Deloitte (Null hypothesis H0: p = 0.85) 0.85 Assumed proportion
Std. Error of estimate 0.0912 From sample
Calculated value of t statistic 1.0692 From sample
prob- value (significance) 0.3338 Far greater than 0.05
Result
As seen from the table, the prob-value for Null Hypothesis (H0: p = 0.85) to be true comes to be 0.3338. This value is far greater than the significance level of 0.05 and hence we can accept the Null hypothesis and accordingly expect 85% of traffic for this category to be diverted to Kollam Port.
Therefore, expected Traffic = 59400 (85% of 70000) tons
Table 7: Hypothesis test for Cashew Nut Shell Liquid
Summary Statistics on Cashew Nut Shell Liquid
Particulars Value Units / remarks
No. of respondents in the category 1 Nos.
Total Traffic 7813 tons
Page 97 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Traffic handled by Sample entities 5000 tons
Proportion of respondents saying yes for diverting traffic to Kollam
0.7246 Sample proportion
Estimate taken by Deloitte (Null hypothesis H0: p = 0.80) 0.80 Assumed proportion
Std. Error of estimate 0.3159 From sample
Calculated value of t statistic -0.2386 From sample
prob- value (significance) 0.8509 Far greater than 0.05
Result
As seen from the table, the prob-value for Null Hypothesis (H0: p = 0.80) to be true comes to be 0.8509. This value is far greater than the significance level of 0.05 and hence we can accept the Null hypothesis and accordingly expect 80% of traffic for this category to be diverted to Kollam Port.
Therefore, expected Traffic = 6520 (80% of 8150) tons
Table 8: Hypothesis test for Marine Products
Summary Statistics on Marine Products
Particulars Value Units / remarks
No. of respondents in the category 6 Nos.
Total Traffic 100318 tons
Traffic handled by Sample entities 8400 tons
Proportion of respondents saying yes for diverting traffic to Kollam
0.1541 Sample proportion
Estimate taken by Deloitte (Null hypothesis H0: p = 0.15) 0.15 Assumed proportion
Std. Error of estimate 0.1474 From sample
Calculated value of t statistic 0.0280 From sample
prob- value (significance) 0.9787 Far greater than 0.05
Result
As seen from the table, the prob-value for Null Hypothesis (H0: p = 0.15) to be true comes to be 0.9787. This value is far greater than the significance level of 0.05 and hence we can accept the Null hypothesis and accordingly expect 15% of traffic for this category to be diverted to Kollam Port.
Therefore, expected Traffic = 15120 (15% of 100800) tons
Page 98 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Table 9: Hypothesis test for Spices
Summary Statistics on Spices
Particulars Value Units / remarks
No. of respondents in the category 5 Nos.
Total Traffic 23938 tons
Traffic handled by Sample entities 365 tons
Proportion of respondents saying yes for diverting traffic to Kollam
0.1096 Sample proportion
Estimate taken by Deloitte (Null hypothesis H0: p = 0.125) 0.125 Assumed proportion
Std. Error of estimate 0.1397 From sample
Calculated value of t statistic -0.1103 From sample
prob- value (significance) 0.9175 Far greater than 0.05
Result
As seen from the table, the prob-value for Null Hypothesis (H0: p = 0.125) to be true comes to be 0.9175. This value is far greater than the significance level of 0.05 and hence we can accept the Null hypothesis and accordingly expect 12.5% of traffic for this category to be diverted to Kollam Port.
Therefore, expected Traffic = 2992 (12.5% of 23938) tons
Table 10: Hypothesis test for Raw Cashew Nuts
Summary Statistics on Raw Cashew Nuts
Particulars Value Units / remarks
No. of respondents in the category 6 Nos.
Total Traffic 372497 tons
Traffic handled by Sample entities 65600 tons
Proportion of respondents saying yes for diverting traffic to Kollam
0.7927 Sample proportion
Estimate taken by Deloitte (Null hypothesis H0: p = 0.80) 0.80 Assumed proportion
Std. Error of estimate 0.1655 From sample
Calculated value of t statistic -0.0442 From sample
prob- value (significance) 0.9664 Far greater than 0.05
Page 99 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Result
As seen from the table, the prob-value for Null Hypothesis (H0: p = 0.80) to be true comes to be 0.9664. This value is far greater than the significance level of 0.05 and hence we can accept the Null hypothesis and accordingly expect 80% of traffic for this category to be diverted to Kollam Port.
Therefore, expected Traffic = 297997.6 (80% of 372497) tons
Table 11: Hypothesis test for Newsprint
Summary Statistics on Newsprint
Particulars Value Units / remarks
No. of respondents in the category 2 Nos.
Total Traffic from Hinterland 8680 tons
Traffic handled by Sample entities 6950 tons
Proportion of respondents saying yes for diverting traffic to Kollam
0.7597 Sample proportion
Estimate taken by Deloitte (Null hypothesis H0: p = 0.70) 0.70 Assumed proportion
Std. Error of estimate 0.3021 From sample
Calculated value of t statistic 0.1976 From sample
prob- value (significance) 0.8757 Far greater than 0.05
Result
As seen from the table, the prob-value for Null Hypothesis (H0: p = 0.70) to be true comes to be 0.8757. This value is far greater than the significance level of 0.05 and hence we can accept the Null hypothesis and accordingly expect 70% of traffic for this category to be diverted to Kollam Port.
Therefore, expected Traffic = 6076 (70% of 8680) tons
Estimated figures based on judgemental analysis
Some of the commodities are handled completely by 1 or 2 players in the hinterland of Kollam port. These players form the entire population for each of such categories and we have taken their opinions on their willingness to divert the traffic to Kollam port. Therefore, for these figures there is no need for statistical analysis as the entire population rather than a sample has been covered through primary survey. Hence, traffic suggested by these players, has been taken as baseline figure for such commodities. The figures are furnished in Table 12 below:
Page 100 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Table 12: Estimated figures A
Estimated Figures A
Commodity No. of players
Traffic Handled (tons)
Willingness to divert traffic to Kollam port
Baseline figure taken (tons)
Titanium Di Oxide 2 9200 Yes 9200
Selemanite 1 400 Yes 400
Blood Bags 1 140 Yes 140
Clay 1 40000 Yes 40000
Further, for some of the categories, all the players in the sample for particular category stated their
willingness to divert the respective traffic to Kollam port. This imples, that all the traffic from industry for
that particular category will be diverted to Kollam port. However, based on inputs received and
qualitative analysis of other factors, we have taken a little smaller than suggested traffic as baseline
figures for such commodities. The figures are furnished in Table 13 below:
Table 13: Estimated figures B
Estimated Figures B
Commodity No. of respondents
Traffic Handled (tons) by sample entities
Total traffic potential (tons)
Baseline figure taken (tons)
Timber ( Kerala) 2 24000 48000 48000
Timber ( Tamil Nadu)
3 1500000 128000 25600
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Annexure 3 : Growth rate taken for the various commodities
Commodities from primary hinterland
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Commodities from secondary hinterland
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Annexure 4 : Traffic projections for various commodities
Projections of major commodities from primary hinterland
Raw cashew nuts ( imports)
The Indian cashew industry lags in competitiveness due to its reliance on imported raw cashew kernels and scattered non-mechanized processing sector that depends on labourers. India imports more than half of its requirement of raw cashew, owing to the poor productivity of its cashew plantations. For e.g the productivity of Vietnam is 2.8 tonne cashew nuts per hectare, while the average productivity in India is only 663 kg per hectare
The industry is dominated by small-scale, single-owner or family-owned businesses. Over two-thirds of the processing units are in Kerala, while the remainder are scattered across other states. Together, these units have an annual processing capacity of over 800,000 tonne
The import of raw cashew nuts into India rose from 2.49 lakh tonnes in 2000-01 to a 6.05 lakh tonnes in 2008-09, showing a CAGR growth rate of around 11%. The lion share of imported raw cashew (upto 60%) was utilized by processing units in Kerala which has its hub in Kollam.
In future context, the shortage of indigenously produced cashew nuts would compel the units to import raw cashew nuts to operate their units to optimum level.
Accordingly, one can safely assume a y-o-y growth rate of around 5% in the next five years on a lower estimate basis.
The Kerala government has set up a special agency for promoting cashew cultivation, which aims at achieving a quantum jump in the availability of raw cashew nuts in the State. Efforts are on to increase the cashew nuts yields which hopefully would bear results in the next five years.
Accordingly for obtaining the low, medium and high growth scenario for the purpose of forecasting of the traffic, the following has been the indicative growth rates taken.
Scenario Growth rate
2010-2015
2016-2020
2021-2025
2026-2030
2031-2035
2036-2040
Low 5% 3% 3% 3% 3% 3%
Figure 10 : Import trends of country’s raw cashew
nuts Source: www.dacnet.nic.in and Cashew Export Promotion Council of India
Figure 11 : Import trends of raw cashew nuts
through Cochin Port
Source: Cochin Port Trust
Page 105 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Medium 8% 5% 5% 5% 5% 5%
High 10% 6% 6% 6% 6% 6%
The growth of raw cashew nuts import cargo in Thankassery port has been worked out as under
In’000 tonnes
Baseline open cargo as on 2009
Scenario 2015 2020 2025 2030 2035 2040
298 Low 399 462 536 621 720 835
Medium 472 603 769 982 1,253 1,599
High 527 706 944 1,264 1,691 2,263
Cashew kernels (exports)
The last seven years CAGR growth rate of cashew kernel exports for Kerala has been around 4.8% and that for India has been 3.62%. Kerala alone accounts around 60% of the cashew kernel exports.
The ratio of export-domestic cashew nut consumption, which once stood at 60:40, has now reached 40:60 due to growing domestic cashew consumption. In 2003, India exported 1.26 lakh tonnes of cashew kernels and consumed 88,426 tonnes in the domestic market. In 2008, the country exported 1.10 lakh tonnes of kernel and consumed 1.92 lakh tonnes in the domestic market
Increase in the domestic per capita income; rise in the number of middle-class households; increased use in sweets, confectionary, etc; and rapid growth of modern retail outlets are some of the main reasons for this growth story in domestic consumption.
Processing capacity by cashew entrepreneurs has gone up substantially from eight lakh tonnes a year to 13 lakh tonnes. But the total exports are consistent.
Figure 12 : Export trends of country’s cashew kernels
Source: www.dacnet.nic.in and Cashew Export
Promotion Council of India
Figure 13 : Export trends of raw cashew nuts
through Cochin Port
Source : Cochin Port Trust
Page 106 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Accordingly one can assume a consistent quantum of exports to the tune of around 60,000 tonnes for the next five years and given the trend of a strong domestic consumption based on higher per capita income.
In subsequent years, based on the assumption that the domestic consumption will increase, the exports will decrease and the same has been reflected over the slab period of 5 years taken till 2040.
The following is the growth pattern taken in a block of 5 years for cashew kernel exports
Scenario Growth rate
2010-2015
2016-2020
2021-2025
2026-2030
2031-2035
2036-2040
Low -3% -3% -3% -3% -3% -3%
Medium -1% -1% -1% -1% -1% -1%
High 0% 0% 0% 0% 0% 0%
The growth of cashew kernel export cargo in Thankassery port is indicated below
In’000 tonnes
Baseline open cargo as on 2009
Scenario 2015 2020 2025 2030 2035 2040
59 Low 49 42 36 31 27 23
Medium 56 53 51 48 46 43
High 59 59 59 59 59 59
Marine food exports
The marine exports growth rate over the past five years has been at a CAGR of around 7.21% for Kerala and 7.91% for India.
Figure 14 : Export trends of country’s marine food
Source: MPEDA
Figure 15 : Export trends of marine food through
Cochin Port
Source: MPEDA
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The quantum of exports from Kollam is from a group of around 6 exporters who have indicated a positive export business growth outlook to the range of around 20 to 30%.
However a very conservative growth rate has been taken for forecasting purposes inspite of the very positive outlook and a very high growth rate predicted by the marine exporters
The following is the growth pattern taken in a block of 5 years for marine food exports
Scenario Growth rate
2010-2015
2016-2020
2021-2025
2026-2030
2031-2035
2036-2040
Low 1% 1% 1% 1% 1% 1%
Medium 3% 3% 3% 3% 3% 3%
High 4% 4% 4% 4% 4% 4%
The growth of marine export cargo in Thankassery port is indicated below
In’000 tonnes
Baseline open cargo as on 2009
Scenario 2015 2020 2025 2030 2035 2040
15 Low 16 17 18 19 20 21
Medium 18 21 24 28 33 38
High 19 23 28 34 42 51
Timber logs
The import of logs by the Kollam / Trivandrum timber dealers through Tuticorin port is to the extent of around 48,000 to 50,000 tons per annum. The quantum of these imports is expected to be more or less steady for the next fifteen years. The growth trends are primarily based on the feedback indicated by the timber importers.
The following is the growth pattern taken in a block of 5 years for timber logs from the primary hinterland ( Kerala importers)
Scenario Growth rate
2010-2015
2016-2020
2021-2025
2026-2030
2031-2035*
2036-2040*
Low 1% 1% 1% 1% 1% 1%
Medium 2% 2% 2% 2% 2% 2%
High 3% 3% 3% 3% 3% 3%
* - For the particular block of the five years, growth has been considered only for the years of, 2035 and 2040
The growth trends of timber cargo from the primary hinterland in Thankassery port is indicated below
Page 108 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
In’000 tonnes
Baseline open cargo as on 2009
Scenario 2015 2020 2025 2030 2035 2040
48 Low 51 54 56 59 60 60
Medium 54 60 66 73 74 76
High 57 66 77 89 92 95
Sand
Due to the restrictions in mining of sand in Kerala, sand is usually sourced through other states including Gujarat. Presently sand is being moved from Gujarat to Thankassery through coastal movement. As per the feedback obtained, the sand shipments will tend to increase. However the growth has been kept on a conservative basis and has been increased as per the respective scenario growth rate only once in the block of five years. The following is the growth pattern taken-
Scenario Growth Rate in %
Low 3%
Medium 5%
High 8%
The growth trends of sand in Thankassery port is indicated below In ‘000 tonnes
Baseline open cargo as on 2009
Scenario 2015 2020 2025 2030 2035 2040
72 Low 86 100 116 119 123 126
Medium 96 123 157 165 173 182
High 114 168 247 266 288 311
Waste paper / newsprint
On interaction with some of the paper mills, it was indicated that they are planning expansion of their production capacities. Given Kerala’s high literacy rates, the extensive reading habits of the local population one would definitely perceive an increase in the imports. However due to the limited numbers of such importers in the hinterland the growth rate applied is only to the extent of once in the block of five years. The following is the growth pattern taken-
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Scenario Growth Rate in %
Low 5%
Medium 15%
High 20%
Accordingly the growth trends of waste paper / newsprint in Thankassery port is mentioned below In ‘000 tonnes
Baseline open cargo as on 2009
Scenario 2015 2020 2025 2030 2035 2040
5.3 Low 5.5 5.8 6.1 6.4 6.7 7.1
Medium 6.1 7.0 8.0 9.2 10.6 12.2
High 6.3 7.6 9.1 10.9 13.1 15.8
Spices exports Pepper
Idukki accounts for around 28,000 tonnes of pepper production which is almost 60 per cent of pepper production from the Kerala State, with an average CAGR of 16% for the past five years.
Of the 28,000 tonnes of pepper produced in Idukki, around 17,000 to 18,000 tonnes (60-64%) are exported.
The Spices Board has got the approval from the National Horticulture Mission for re-plantation and rejuvenation of pepper in Idukki district for five years from 2009-10. The objective of the scheme is to increase the production to one lakh tonnes in five years from the present 28,000 tonnes in Idukki, which accounts for 60 per cent of pepper production from the State. The scheme is to replant old
Figure 16 : Production trends of pepper in Idukki district
Source: Spices Board
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and senile as well as disease affected pepper vines with disease free high yielding pepper vines in about 68,000 hectares
Accordingly by 2014, under ideal conditions and given the serious commitment of the Spice Board, one may foresee an increase in pepper production in Idukki to the tune of 1,00,000 tonnes. On a realistic note, given the various constrains in implementation of schemes, the increase in the production may not reach one lakh tonne but say around 75,000 tonnes.
Accordingly if we maintain that 60% of the 75,000 tonnes is exported, by 2014, the actual exports from Idukki may reach to the level of 45,000 tonnes.
In terms of future growth rate of pepper, the experts in the trade have indicated that a y-o-y growth rate of around 8 % can be expected; however for the purpose of the traffic projections the following growth rate has been assumed.
Scenario Growth rate
2010-2015
2016-2020
2021-2025
2026-2030
2031-2035
2036-2040
Low 2% 2% 2% 2% 2% 2%
Medium 4% 4% 4% 4% 4% 4%
High 6% 6% 6% 6% 6% 6%
In ‘000 tons
Baseline open cargo as on 2009
Scenario 2015 2020 2025 2030 2035 2040
2.61 Low 2.9 3.2 3.6 4.0 4.4 4.8
Medium 3.3 4.0 4.9 6.0 7.2 8.8
High 3.7 5.0 6.6 8.1 9.8 12.0
Cardamom and Spice Oils & Oleoresins
The quantum of exports of the referred commodities expected through Kollam is not much.
The all India CAGR export rate for both Cardamom and Oils & Oleoresins is 4% in the last four years.
Since Kerala accounts for 30% and 80% of the Cardamom and Oils & Oleoresins exports, we can safely assume a growth rate of 4% y-o-y for the purpose of traffic estimation in medium scenario.
In ‘000 tons
Baseline open cargo as on 2009
Scenario 2015 2020 2025 2030 2035 2040
0.30 Low 0.33 0.37 0.41 0.46 0.50 0.55
Medium 0.38 0.46 0.56 0.70 0.82 1.00
High 0.42 0.56 0.75 1.07 1.35 1.80
Rubber ( exports & imports)
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Kerala accounts for almost 91 to 92% of the all India rubber production. Accordingly a bulk of the exports is routed through Kerala.
While the production of natural rubber has witnessed a CAGR growth rate of 5.14% from 2000-01 to 2006-07; the exports of natural rubber have been fluctuating.
The export quantum also depends on the price it fetches at the international market, which is very dynamic. Hence any increase in the international rubber market will witness an increase in the exports.
It would be thus a bit difficult to estimate the exact forecast for the rubber commodities both import and export of natural rubber, synthetic and reclaimed rubber.
Given the volatile EXIM nature of rubber, the following conservative growth estimate has been taken
Scenario Growth rate
2010-2015
2016-2020
2021-2025
2026-2030*
2031-2035*
2036-2040*
Low 2% 2% 2% 2% 2% 2%
Medium 5% 5% 5% 5% 5% 5%
High 7% 7% 7% 7% 7% 7%
* - For the particular block of the five years, growth has been considered only for the years of 2030, 2035 and 2040
The growth of exports (natural rubber and reclaimed rubber) and imports (natural rubber and synthetic rubber) cargo in Thankassery port is indicated below Imports
In ‘000 tonnes
Figure 17 : Exports trends of natural rubber ( Kerala vis-à-vis India)
Source: Rubber Board
Page 112 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Baseline open cargo as on 2009
Scenario 2015 2020 2025 2030 2035 2040
1.47 Low 1.62 1.79 1.97 2.05 2.10 2.14
Medium 1.97 2.51 3.20 3.36 3.53 3.71
High 2.20 3.09 4.33 4.63 4.96 5.31
Exports In ‘000 tonnes
Baseline open cargo as on 2009
Scenario 2015 2020 2025 2030 2035 2040
1.40 Low 1.58 1.74 1.92 1.96 2.00 2.04
Medium 1.87 2.39 3.05 3.21 3.37 3.53
High 2.10 2.94 4.13 4.42 4.73 5.06
Cashew Nut Shell Liquid (exports)
Cashew nut shell liquid (CNSL) is a natural chemical product, which finds application in the paint, automobile and foundry industry. However, exports of the commodity had been languishing for several years due to low global prices and the difficulty in handling and transporting the highly corrosive chemical.
CSNL is a by-product of the cashew nut processing. In most cases due to the nature of the industry, CNSL is not actively sourced during the conversion. CNSL is produced in the 'steam cooking method 'of conversion, which cooks the hard shell in hot steam before taking out the nut. The shell is not destroyed unlike the alternate method of 'drum roast'.
CSNL production is increasing as more processors are turning to the 'steam cooking method' of processing instead of the "drum roast method'.
Over the past 18 years, the exports of CSNL on an all India level basis have shown an increase to the tune of 1.17%.
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Figure 18 : Exports trends of Cashew Nut Shell Liquid ( Kerala vis-à-vis India)
Source : www.dacnet.nic.in and Cashew Export Promotion Council of India
However export of cashew nut shell liquid, which is a by-product of the cashew nut processing industry, is recording a commendable increase thanks to government incentives in the form of duty credit. With the government including CNSL in the Vishesh Krishi Upaj Yojana (VKUY), exports has been looking good.
The US continues to be the major market and imports nearly 95-98% of the Indian commodity. However, new markets like China, Korea, Japan and the UK are catching up.
Accordingly, a conservative y-o-y increase rate of 4% has been taken for the first five years under the medium growth scenario and the same being stabilized in the next 5 years and again a 4% increase in the next 10 years. The rationale behind the increase in the 4% in the first five years stems from the initiatives of the government and the willingness of the cashew processing units to shift to steam cooking method and realization of the export potential of CSNL.
Scenario Growth rate
2010-2015
2016-2020
2021-2025
2026-2030
2031-2035
2036-2040*
Low 2% 0% 2% 0% 2% 0%
Medium 4% 0% 4% 0% 4% 0%
High 6% 0% 6% 0% 6% 0%
Accordingly, the growth of CSNL cargo in Thankassery port is indicated below In ‘000 tonnes
Baseline open cargo as on 2009
Scenario 2015 2020 2025 2030 2035 2040
6.50 Low 7.18 7.32 7.92 8.24 8.91 8.91
Medium 8.22 8.22 10.01 10.01 12.17 12.17
High 9.22 9.22 12.34 12.34 16.51 16.51
Clay
Clay is primarily sold by English India Clays which has demonstrated a dynamic growth over the past 4 years, with close to 14 per cent CAGR. But movement of any mineral (particularly export) is subject to vagaries of market and also determined by Government policies. Clay has a wide range of applications spanning diverse segments including paint, paper, inks, plastics, fiberglass, catalysts, etc. & therefore has a good market potential
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Considering that the clay movement is dependent on just one company, a conservative growth rate of 6% in the first year of each of the 5 year slab has been taken to enable our forecasts of normal scenario to hold good in event of unforeseen circumstances.
The forecast has been applied for both coastal and export movement of clay.
However with the expected commissioning of Vizhingham port and the company location being based in Trivandrum, after 2016, it has been assumed that the export cargo would be diverted to Vizhingham.
The growth of clay cargo in Thankassery port is indicated below Clay ( EXIM)
In ‘000 tonnes
Baseline open cargo as on 2009
Scenario 2015 2020 2025 2030 2035 2040
10
Low 10 - - - - -
Medium 11 4 - - - -
High 11 13 10 - - -
Clay ( Coastal)
Baseline open cargo as on 2009
Scenario 2015 2020 2025 2030 2035 2040
30 Low 31 32 34 35 36 38
Medium 32 34 36 38 40 43
High 32 35 38 41 44 48
Titanium Di Oxide
It represents the exports from two companies viz Kerala Minerals & Metals Ltd (KMML) and Travancore Titanium Products Ltd (TTPL). TTPL have just begun with exports to the tune of 2000 tons p.a. and are anticipating an increase of exports to around 4000 tons after 5 years. We can assume the same to be constant thereafter, since market is unpredictable. In terms of exports from KMML , we have assumed a 6% growth in the first year of the five year slab period in absence of sufficient information.
Since TTPL is based in Trivandrum, we are assuming the cargo for Thankassery will be diverted to Vizhingham, once the same is commissioned.
The growth of Titanium di Oxide in Thankassery port is indicated below In’000 tonnes
Page 115 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Baseline open cargo as on 2009
Scenario 2015 2020 2025 2030 2035 2040
Titanium Di-Oxide (KMML)
7.2 Low 7.5 7.8 8.1 8.4 8.8 9.1
Medium 7.6 8.1 8.6 9.1 9.6 10.2
High 7.8 8.4 9.1 9.8 10.6 11.4
Titanium Di-Oxide
(TTPL)
2.0 Low 2.06 - - - - -
Medium 2.10 0.89 - - - -
High 2.14 2.49 2.00 - - -
Finished fertilizers (Urea and Muriate of Potash)
Domestic capacities in Kerala and production of fertilizers have stagnated for more than a decade. The demand for fertilizers on the other hand has been rising. This has resulted in dependence on imports of finished fertilizers. , thereby increasing the subsidy requirement further.
Imports of Muriate of Potash through Cochin port over the last five years grew at a CAGR of 14.72%, while the y-o-y growth of urea in 2008-09 was more than 150% over the previous year.
Kerala has been known to have shortage of fertilizers and is dependant on external sources for its fertilizers needs.
Based on the above considerations and the cargo indicated by Aspinwall, a conservative growth rate of around 5% under medium growth scenario has been taken for the purpose of traffic forecast.
Scenario Growth rate
2010-2015
2016-2020
2021-2025
2026-2030
2031-2035*
2036-2040*
Low 2% 2% 2% 2% 2% 2%
Medium 5% 5% 5% 5% 5% 5%
High 8% 8% 8% 8% 8% 8%
* - For the particular block of the five years, growth has been considered only for the years of 2035 and 2040. Accordingly the likely growth of urea and muriate of potash is indicated below
In’000 tonnes
Baseline open cargo as on 2009
Scenario 2015 2020 2025 2030 2035 2040
Finished 125 Low 141 155 172 189 193 197
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fertilizers Medium 168 214 273 348 366 384
High 198 291 428 629 680 734
Cement
The growth of the cement market is taken as 1.3% more than the country GDP growth rate. In addition, if we consider the regional market of Kerala, the GDP growth rate has been quite strong with a y-o-y growth rate of more than 8% for the past few years.
Accordingly, given the spurt of construction activities and other ancillary infrastructure projects being planned in the region, the cement consumption is bound to increase.
For the purpose of calculation, the growth rate under the normal scenario has been taken at a conservative level of 7%.
Scenario Growth rate
2010-2015
2016-2020
2021-2025
2026-2030
2031-2035
2036-2040
Low 3% 3% 3% 3% 3% 3%
Medium 7% 7% 7% 7% 7% 7%
High 9% 9% 9% 9% 9% 9%
Based on the above, the likely growth trends of cement is indicated below
In ‘000 tonnes
Baseline open cargo as on 2009
Scenario 2015 2020 2025 2030 2035 2040
Cement 600 Low 637 738 855 992 1,150 1,333
Medium 687 963 1,351 1,895 2,658 3,728
High 713 1,097 1,688 2,597 3,995 6,147
Projections of major commodities from secondary hinterland
Timber logs
On interaction with some of the leading indenting agents who arrange for the procurement of timber logs on behalf of the saw mills, it was indicated that a significant bulk of around 1.2 to 1.5 lakhs is routed towards Shencottai However of these 1.5 lakhs, not all cargo is expected to be diverted towards the Kollam port, since the infrastructure at Tuticorin is already well established.
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Figure 19 : Import trends of timber in the districts of Kanyakumari, Thiruneveli, Virudhunagar, Tuticorin
and Madurai
Source: EXIM information obtained from Shivsanth Consultancy, Tuticorin
A certain percentage of the cargo (of 1.5 lakh tons) can be diverted initially and based on the positive feedback, the diversion of the cargo will only increase (under the presumption that the operations at Thankassery are efficient). However one does not foresee the entire diversion of cargo and the importers may at best divert cargo to a maximum extent of 50% of the baseline cargo.
The likely growth trend of timber logs from Tamil Nadu hinterland to Thankassery port is indicated below
In’000 tonnes
Baseline open cargo as on 2009
Scenario 2015 2020 2025 2030 2035 2040
128 Low 14 23 25 27 30 30
Medium 22 44 51 59 68 68
High 31 76 92 110 132 132
Marbles, tiles The growth rate considered under medium scenario is 15% in the first year of the five year slab period. The likely growth trend of marbles from Tamil Nadu hinterland to Thankassery port is indicated in the subsequent table.
In ‘000 tonnes
Baseline open cargo as on 2009
Scenario 2015 2020 2025 2030 2035 2040
18 Low 20 22 24 26 29 35
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Baseline open cargo as on 2009
Scenario 2015 2020 2025 2030 2035 2040
Medium 21 24 27 31 36 48
High 22 26 31 37 45 64
Food/Agricultural Products & Spices
This category covers variety of food and agricultural products and spices as well. The main products are maize, corn, chillies, onions, gherkins, papads, etc.
Three companies, viz. Concord Exports, C.M.S. Balan & Co. and Deva Chitra Exports, who have expressed their interest in using Thankassery port contribute to nearly 90% of the total food & agricultural products and spices exports for Madurai district. The growth of their export volumes is extra-ordinarily high. It ranges from 25% to almost 100% over the last three years.
Therefore to arrive at more reasonable export growth rate, export statistics for a 5-year period from 2002-03 to 2007-08 from the Agricultural and Processed Food Products Export Development Authority (APEDA) website have been used to calculate a CAGR for select commodities. The CAGR so arrived is 6.54%.
The growth rate considered under normal scenario is 7% in the first year of the five year slab period. The likely growth trend of food / agricultural products and spices from the identified Tamil Nadu hinterland to Thankassery port is indicated below
In ’ 000 tonnes
Baseline open cargo as on 2009
Scenario 2015 2020 2025 2030 2035 2040
17 Low 18 19 20 20 21 22
Medium 19 20 21 23 24 26
High 19 21 23 25 28 31
Textiles, yarns and fabrics
This category of exports from Madurai and Theni districts consists of cotton yarn, garments, fabrics, made-ups, terry towels, etc.
During 2007-08, Indian Textile and Clothing (T&C) exports were valued at US $ 22.4 billion of which Textile exports accounted for US $ 12.7 billion and Garment exports accounted for US $ 9.7 billion.
The export earnings from the T&C industry are estimated to increase to US $ 55 billion by 2012. (Source: Report of the Working Group on Textiles & Jute Industry for the Eleventh Five Year Plan)
T&C exports have increased at a CAGR of 12% from 2005-06 to 2007-08.
During the last fiscal (period April – December 2008) T&C exports have missed the expected growth targets on account of economic slowdown in major T&C export markets.
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As a result, during Apr – Dec 2008 India’s garment exports grew by 7% (y-o-y) as against a growth of 9% (y-o-y) in FY08 whereas India’s Textile exports declined by 4% (y-o-y) as against a growth of 21% (y-o-y) in FY08.
The companies so contacted in Tamil Nadu have registered a modest growth and are optimistic over the long run on their exports. Considering all the above factors, a growth rate( for normal scenario) of 8% in the first year of the five year slab period has been adopted.
The likely growth trend of textiles, yarns and fabrics from the identified Tamil Nadu hinterland of Theni and Madurai to Thankassery port is indicated below
In ‘000 tonnes
Baseline open cargo as on 2009
Scenario 2015 2020 2025 2030 2035 2040
23 Low 24 25 26 28 29 31
Medium 25 27 29 31 34 36
High 26 29 32 36 40 45
Cement
Import of Cement is mostly in the district of Madurai. The quantity is close to 16,000 tonnes
annually.
The respondents during the primary survey included S.S.N. Trading Company, Triumph Enterprises
And Triumph Enterprises & Investment Pvt Ltd and they together import 7,000 tonnes of the total
imports and are open to diversion of cargo from the Thankassery port.
The growth rate under normal scenario has been taken at around 10% in the first year of the five
year slab period. The indicative growth trend of cement routed to Madurai is indicated below In ‘000 tonnes
Baseline open cargo as on 2009
Scenario 2015 2020 2025 2030 2035 2040
16 Low 17 18 19 19 20 21
Medium 18 19 21 23 26 28
High 18 21 24 28 32 37
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Annexure 5 : Route of roads, canal and railway line near
Port area
The drawing of the route profile of roads, canal and railway line near the port area as prepared by Atlas Survey Engineering Systems is attached below this page
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Annexure 6 : Topography and contour map – port area
The topography / contour map of the port area as prepared by Atlas Survey Engineering Systems is attached below this page
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Annexure 7 : Bathymetric chart
The Bathymetric chart for the Thankassery harbour dated 13th October, 2007 is attached below this page
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Annexure 8 : Borehole tests results
The borehole details made available by Harbour Engineering Department based on actual bore results at pile locations number 3 and 15 of cargo wharf are attached below this page
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Annexure 9 : Rapid Environmental Impact Assessment
The REIA report prepared by Centre for Environment and Development, Trivandrum is attached below this page
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Annexure 10 : Port development layout
The existing facilities map layout prepared by Harbour Engineering Department, GoK and the development layout plan prepared by MEC Consultants are attached below this page
Page 126 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Annexure 11 : Financial projections
Page 127 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Annexure 12 : Queries received from DoP on the draft
final report submitted
Page 128 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Annexure 13 : Clarifications submitted in the draft final
report
Page 129 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Table of Contents for the clarifications to the queries raised on the draft DFR
Query 1 - Whether the project costing Rs. 40 Crores in 1st phase for development at Kollam port can
be carried out by the Government of Kerala without private participation – a SWOT. ...................... 130
Query 2 - If initial investment is done by government as per point above, whether operation is to be
given on BOT – a SWOT. ................................................................................................................. 130
Query 3 - The hinterland connectivity using backwater and waterways, road / rail connectivity may be
included in the DFR with cost ......................................................................................................... 135
Query 4 - Reducing the time to start second phase – ( in the draft report it has been indicated as
2025). ............................................................................................................................................ 144
Query 5 - If 20,000 or more DWT vessels need to come what need to be done and costs as the future
requirements are larger vessels to reduce cost of transportation .................................................... 144
Annexures (Profit & Loss Account Statement and Financial Indicator statements)
Scenario Option Annexure number
Scenario 1 - The rail and road connectivity cost to be
borne by 100% by the Private Developer through SPV
Option 110 13.1
Option 211 13.2
Scenario 2 - 50% of the rail and road connectivity cost is
to be borne by the Private Developer through SPV and
the balance 50% will be incurred by the Government.
Option 1 13.3
Option 2 13.4
Scenario 3 - 50% of the rail connectivity cost to be borne
by the Private Developer through SPV, while the 100%
road connectivity cost would be borne by the
government
Option 1 13.5
Option 2 13.6
Scenario 4 - 100% of the rail and road connectivity cost
will be borne by the Government
Option 1 13.7
Option 2 13.8
Option 1 - maximum vessel that can berth at the port is of size of 20,000 DWT Option 2 - maximum vessel that can berth at the port is of size of 15,000 DWT
10 Option 1 - maximum vessel that can berth at the port is of size of 20,000 DWT 11
Option 2 - maximum vessel that can berth at the port is of size of 15,000 DWT
Page 130 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Query 1 - Whether the project costing Rs. 40 Crores in 1st phase for development at Kollam port can be carried out by the Government of Kerala without private participation – a SWOT.
Query 2 - If initial investment is done by government as per point above, whether operation is to be given on BOT – a SWOT.
Findings for the queries 1 and 2
The Government of Kerala has already developed facilities at Thankassery port. In order to facilitate
commercial operations of the port, additional development would be required which entails for an
investment of around Rs. 40 Cr. While the government would build the facilities and would not dilute its
share in the ownership of the port, it would be open to outsourcing of the operation of the port to an
experienced third party.
The pros and cons of such an arrangement has been sought to be reviewed and is indicated below
SWOT analysis for query 1 - Whether the project costing Rs. 40 Crores in 1st phase for development at
Kollam port can be carried out by the Government of Kerala without private participation.
Strengths Weakness
1. The government would bank upon its own
resources (financial and technical) for building
the facilities and hence would not have to
depend on a third party.
2. For obtaining any approval / clearance from a
particular state regulatory or government
agency, the same would be expedited earlier
by the state government through its inter-
departmental connections. Comparatively the
time taken for a private developer in obtaining
the same set of clearances may be more.
3. With the funds already been approved for
development of infrastructure facilities etc,
the disbursement might be faster for the
government than for a private party who
would be required to raise his own funds for
the project.
4. The entire port has been completed by the
state government so far and only a Rs. 40
crore investment is pending for phase 1. It
makes sense that the government completes
this (provided it is able to provide funds) and
1. Any delay in approval and subsequent
disbursement of the allotted funds might lead
to possible postponement of the completion
of the facilities for phase - 1
2. In the event of a third party developing the
facilities, there would have been checks and
penalties based on completion of certain
milestones, which would have enforced the
timely completion of the project. In the
proposed scenario, the government cannot
impose a penalty on itself. In the absence of
any strict milestone completion schedule /
deadlines, there might be possibilities of
completion work getting delayed.
3. Any delays in the completion of the facilities
for Phase –I might result into cost –over runs
leading to the project cost increasing from
anywhere between 5 to 25%. This has
happened in the past for Kollam port.
4. In the event of purchase of material handling
equipments which is part of the Rs. 40 Cr
investment, there might be delay in obtaining
Page 131 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Strengths Weakness
hands it in full readiness to a private party for
operating the port instead of asking the
private party to invest a small amount and
getting him to develop the port to that extent.
the same due to drafting of the specifications,
floating tender for the purchase, evaluation of
the vendors and the final selection of the
vendor for the purchase. Adherence to the
strict governmental norms may lead to the
delay in the purchase of the equipment.
Accordingly, the purchase of the material
handling equipment would be best left to the
private party selected to purchase and
operate
Opportunities Threats
1. The proposed arrangement would lead to the
government having full control in the
development of the facilities. All assets would
be under government ownership instead of a
small amount of Rs. 40 Crore being under
private ownership.
2. The government can prioritize its plans for
various port facilities and accordingly invest in
the facility deemed to be more important than
the rest.
1. Development of an infrastructure project
through governmental resources may not
necessarily be aimed for commercial
objectives. The political-social objectives may
over-ride the commercial aspects and the
project may end up as an exercise purely for
employment generation and other social
obligations.
2. There might be a scenario that the funds
allotted to a particular project may get
diverted for another project of similar nature
and to which a higher priority has been
assigned by the State Government. This will
lead to a delay in the development of the
project for which the funds were earlier
earmarked and whose development would
commence only when fresh funds would be
reallocated towards it. Under such
circumstances, the investment is better left to
the private parties to make.
3. Good road connectivity is essential for smooth
evacuation and movement of cargo. Usually
development of approach roads is undertaken
by governmental agencies. In the event the
government falls short of the funds for
approach road development (after having
invested in the development of the port), the
project will run the risk of not yielding
sufficient returns without proper connectivity..
Page 132 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
SWOT analysis for query 2 - If initial investment is done by government as per point above, whether
operation is to be given on BOT.
The investment of Rs. 40 Cr (indicated in the earlier point) includes Rs. 20 cr of material handling
equipment. For the operation by the third party, two scenarios may arise –
1. Scenario 1 – Wherein the private operator is asked to invest in the material handling equipment ( Rs.
20 Cr) and operate the same on BOT basis
2. Scenario 2 – The government invests in the material handling equipment and outsources the
working of the same to a private party for a fixed tenure of years.
The underlying factors (pros and cons) for both the scenarios are captured in the table below –
Strengths Weakness
The private party invests in the material
handling equipment of Rs. 20 Cr
1. In the event the private party is made to invest
in the material handling equipment also, the
application of private capital will free up
government funds ( to that extent of the funds
infused by private party) for other priority
projects including on access infrastructure and
protective works relating to port extension
and on renovation projects
2. The functions can be performed at a price that
is substantially lower than the cost of
conducting them in the public sector
3. There would be a large field for competitive
bidding
4. The transfer of risks for construction, finance,
and operation of the facility to the private
operator
5. The attraction and use of possible foreign
investment and technology
Common factors for both the scenarios
6. Considering that the government would not
The private party invests in the material
handling equipment of Rs. 20 Cr
1. In the event the private operator is asked to
invest money on obtaining the material
handling equipment and installing the same
at the port, the perceived costs are high for
the government. Besides the borrowing cost,
there is a profit element in the equity portion
of the financing, which is higher than the debt
cost. That is the price the government will
pay for passing off the risk to the private
sector
2. The government would have a lesser control
in the day to day operations. This can
however be mitigated by putting in adequate
safeguards in the concession agreement.
3. The need for continuing close government
regulation and oversight
Other common factors for both the scenarios
4. In the event of traffic falling below the
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have the requisite experience in port
operations, outsourcing of the same to an
experienced third party operator would
ensure that the respective capabilities (that of
the government and of the private party)
would be leveraged appropriately.
7. Outsourcing of operations to an experienced
operator would lead to efficiency and smooth
functioning of the port.
8. The government can set forth KPI (Key
Performance Indicators) and can penalize the
operator on non –adherence of the same.
9. The government would not be required to
spend resources on the marketing of the port,
which would be best taken by the private
operator.
10. The port can provide an improved customer
service quality with a competitive price
expected growth, the port operator would
not expect the anticipated revenue growth
and may not recover his costs. In such an
event, after the contract of the private
operator has, there may not be new interest
amongst private parties for the port
operations. This can however be mitigated by
the Government providing additional
incentives for cargo to come to the port and
ensuring its continued existence.
5. Winning bids are sometimes based on
unrealistic financial projections, placing the
sustainability of the agreement in jeopardy
Opportunities Threats
The private party invests in the material
handling equipment of Rs. 20 Cr
1. There are multiple captive cargo generators
interested in the port which will ensure
committed cargo flow to the port. The
Government can give a mandate to the
captive cargo generator that he must also
cater to third party cargo as and when these
also come to the port for loading / unloading.
Common factors for both the scenarios
2. The proposed model can be one of the PPP
models which can be emulated in other
upcoming ports of the state.
3. Outsourcing the operations to a private party
will allow the government to benchmark or
compare their own operations (existing /
The private party invests in the material
handling equipment of Rs. 20 Cr
1. Contracting out may create a monopoly for
those activities, which would be contrary to
the public interest, unless there is a proper
regulatory oversight framework.
2. Change of political party, change of
organizational control, anti-privatization
backlashes (nationalization), unexpected new
tax regulations, and other governmental
actions could make comprehensive the BOT
scheme much less attractive
Common factors for both the scenarios
3. If the number of potential bidders is limited, a
meaningful comparison of the bids may not
possible. This can be mitigated by a well
planned marketing effort that ensures
Page 134 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
future) in with those of what is expected to
be more efficient private sector operations.
That can lead to improvements being made in
the state government port sector operations
maximum participation
4. Potential bidders may form a cartel or
otherwise collude when bidding for a
contract.
5. Opposition by labour trade unions on the
outsourcing of the operations of the port
6. The danger that the private operator will not
properly maintain the facilities under
concession, returning them to the
government in bad condition. This can
however be mitigated by putting in adequate
safeguards in the concession agreement.
7. In the event, the government indicates that
the existing port staff are to be deployed for
port operations, the private operator
company may be saddled with excess labor
and labor costs that cannot be sustained in a
competitive market.
Page 135 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Query 3 - The hinterland connectivity using backwater and waterways, road / rail connectivity may be included in the DFR with cost
Findings for the query 3 is given below -
1. Viability of inland water connectivity for the Thankassery port
1.1. Background
To assess the possible linkage of the inland backwaters of Kollam to the Thankassery port for the
movement of cargo from the backwaters to the point and vice-versa, a small study was undertaken. This
involved understanding the present cargo movement through the backwaters ( West Coast canal) , the
potential and challenges faced for cargo movement by interacting with the players involved in the cargo
movement through backwaters including barge owners , Kerala State Water Transport Department,
CHAs and other shippers in Kollam.
1.2. Existing cargo movement through west coast canal
The existing NW-3 West Coast Canal is from
Kottapuram to Kollam along with Champakara and
Udyogmandal canals (205 kms) has been declared as
National Waterway (NW-3) in 1993. The bulk of the
major cargo which is moved through National
Waterways-3 consists mostly chemicals and
products such as sulphur, Rock Phosphate,
Phosphoric Acid, salt, coal, zinc, furnace oil and
fertilizers. Cargo movement presently is however
limited to Champakkara and Udyogmandal canals.
Fertilizers and Chemicals Travancore Limited (FACT)
is the major player which is involved in the
movement of bulk cargo from Cochin port to its
Udyogmandal factory and accounts for more than
95% of the cargo movement of the west coast canal.
Some of the other players include Binani Zinc,
Hindustan and Travancore Cochin Chemicals Ltd
(movement of salt, though the same is not frequent.
Over the past few years, it has been observed that there has been a gradual decline in the movement of
the bulk cargo with liquid ammonia cargo (Eloor to Ambalamugal) being shifted to road. The indicative
trends in the cargo movement through the West Coast Canal is indicated in figure 2 below
Figure 20 : West coast canal map
Source : Inland Waterways Authority of India (IWAI)
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1.3. Infrastructure facilities on the west coast canal
Water terminals have been developed at seven locations across the West Coast Canal including at
Kottapuram, Aluva, Maradu, Viakom, Taneermukham (Chertala), Trikkunnapuzha and Kayamkulam.
Construction of 8th terminal at Kollam was entrusted to CPWD. The water terminal in Kollam is a boat
jetty facility located at Ashramam road near to the KSRTC bus stand.
1.4. Draft constraints
The draft availability is a serious constraint for movement of cargo across the length of the West Coast
Canal. The minimum draft available recorded across the various stretches of the West Coast Canal for
the month of April and May 2010 is indicated in the table below
Depth in meters
Sr. No Name of the Beat
( Chainage in Kms)
April,
2010
May,
2010
1 Champakara Canal (21.5 kms)
Cochin Port - Ambalamugal Factory 1.5 1.5
(0.0-21.5)
2 Udyogmandal canal ( 21 kms)
Cochin Port - Pathlam Bridge 1.5 1.7
(0.0 -21.0)
3 West Coast Canal ( 183 kms)
Kottapuram Terminal - Kochi Port 1.1 1.1
(0.0-34.0)
3- i Kochi Port - Panavalli Jetty 2.0 2.0
(34.0-54.0)
3- ii Panavalli - Thanneermukkom Terminal 2.0 2.0
(54.0-77.0)
3- iii Thaneermukkom Terminal - Alappuzha 2.0 2.0
(77.0-97.0)
Figure 21 : Cargo movement trends on the West Coast Canal
Source: Inland Waterways Authority of India (IWAI)
Page 137 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Sr. No Name of the Beat
( Chainage in Kms)
April,
2010
May,
2010
3- iv Alappuzha - Thakazi jetty 1.9 1.9
(97.0-118.0)
3- v Thakkazi jetty - Trikunnapuzha Terminal 1.4 1.4
(118.0-136.0)
3- vi Trikunnapuzha Terminal - Ayiramthengu jetty 1.2 1.2
(136.0-154.0)
3- vii Ayiramthengu jetty - Edapallikotta Junction 1.2 1.2
(154.0-167.0)
3- viii Edapallikotta - Kollam terminal 0.9 0.9
(167.0-183.0)
Table 45: Minimum draft recorded across the various stretches of the NW-3
Source: Inland Waterways Authority of India (IWAI)
The expected tidal variation over the least available draft is around 0.4 to 0.5 meters.
1.5. Existing cargo movement at the Kollam
backwater stretch
With regards to the cargo movement in the Kollam
backwater stretch, it has been given to understand
that over the past one month Kerala Minerals and
Metals Ltd (KMML) is experimenting with the
movement of sand from their Kayankulam mining
areas to their factory at Chavara (distance of around
20 kms). In Kayankulam, sand is mined and the
possibility of the inland movement to the KMML’s
Chavara plant is being tested out.
If successful and stabilized, it is expected that an
annual movement of 200,000 tonnes of sand is
possible from the mining sites of KMML at
Kayamkulam to its mineral separating factory at
Chavara. The movement will be in barges and in bulk
format.
Indian Rare Earths Limited (IREL) also has a processing plant at Chavara. In fact IREL had also tried to
move sand from their mining sites to their factory. Unfortunately for IREL, there is a Foot Over Bridge at
Kovilthottam between the KMML factory and the IREL factory which obstructs the cargo movement.
Hence while KMML is trying to experiment bringing in cargo to its factory from Kayamkuliam, IREL is
Figure 22 : Overview map of Kollam to Kayamkulam area
Source: Google map
Page 138 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
unable to move the sand through inland waters due to the low-lying foot over bridge at Kovilthottam.
The height of the bridge from the water is 4.8 m, while the central span width is 9.1m. While the Inland
Waterways WAI had offered to construct a new alternate bridge and later demolish the existing bridge
to allow the cargo movement, the locals have opposed the plan.
1.6. Possibility of movement of the identified cargo of Thankassery port along the Kollam backwaters
The inland water transport is being advocated primarily as a means of cheaper inland transportation
option and also to ease congestion from the roads. The cheaper inland transport would be realized
when the origin and destination have their units near the water body and the cargo is transported to the
barges from the source and later directly transferred to its destination. A classic example is the existing
movement of sulphur, rock-phosphate being moved from the FACT jetty at Cochin port to its factory at
Udyogmandal via the Udyogmandal canal and to its factory at Ambalamedu through the Champakkara
canal. The distance is around 20-25 km and in one barge around 500 to 600 tonnes is moved at an inland
cost of Rs. 70-80 per tonne. At both the ends, the cargo is pumped in/out by a mechanized conveyor
system, without any intermittent double handling making the operations very cost effective.
With the Thankassery port being operational in the near future, the possibility of cargo movement from
the immediate hinterland via the Kollam backwater was explored. The cargo being identified for the
Thankassery port essentially comes from the immediate hinterland of Kollam, Trivandrum and the
coastal cargo (cement) meant for the South Kerala region.
While the cargo generators from Trivandrum hinterland would move by road, the immediate possible
cargo movers for the Thankassery port that would possibly use the inland water system would arise
from the hinterland of Kollam, which are mainly cashew exporters. These exporters have their units
spread across the district and do not necessarily have their units near the river banks unlike IREL and
KMML. In the event the cashew cargo generators use the inland water for the movement of their cargo
to Thankassery port, the last mile connectivity or the first mile connectivity for imports and exports
respectively would be by road movement. The possible savings which has been depicted in section 3.8.5
of this report would be offset by the double handling charges i.e. additional handling charges that the
shipper would be required to pay for the transfer of the container from the truck on the road to the
barge on the inland water. Accordingly it is more prudent for them to directly move their cargo by road
to and from Thankassery port.
For cement, the cargo would be pumped directly from the vessel to the silos from where it will be
bagged and later sent to the various cement depots mainly in the South Kerala region thereby not
necessitating the need of utilizing the inland water mode.
1.7. Other issues
Draft -
One of the key issues with regards to the movement in the Kollam stretch is the low draft
(0.9m) as recorded in May 2010. Accordingly the cargo movement would have to depend
extensively on the tidal variation which is recorded at 0.4 to 0.5. In the event the cargo
generator utilizes the backwater, he would be required to time his cargo movement based on a
favorable tide factor, which will be very inconvenient and result in time over-runs. Low draft
across the canals is an issue which is being addressed by the authorities concerned by dredging
of the canals. However they are facing opposition from the local fishermen community.
Page 139 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Material handling –
In addition, the water terminals so built are ready to use, but do not have the requisite crane
facilities for the container handling. These cranes are possibly available on lease, but these are
charged at Rs.50,000/- to Rs.60,000/ - per day and proves to be unviable for a shipper.
Width –
The width of a barge is around 10 meters, while the Kollam stretch of canal varies from 10 m to
20 m thereby making the navigation of the barges highly difficult in stretches which have just
about 10 m width.
Sea-worthiness of barges –
The barges plying are mainly inland barges requiring minimum safety and other technical
requirements for getting permissions from statutory authorities for navigation. For using
Thankassery Port these will have to be upgraded to satisfy conditions of sea worthiness which
would involve huge additional costs and regular inspection and statutory clearances which
owners of these barges would not accept being uneconomical.
Integration issues –
At the outset, there is no convenient point of entry in the immediate vicinity of Thankassery Port
to connect directly the inland waterways directly in the port. This would require barges to enter
sea and then from approach channel to enter Thankassery Port. Therefore, an integrated
movement from the inland waterway to the sea port does not seem to be a viable option.
1.8. Conclusions
Based on the cargo generation pattern identified for the Thankassery port, it becomes viable for the
cargo generators to use the inland road transport. In addition, the factories are not located on the bank
side and movement through roads is more convenient and inland water movement of cargo for the
Thankassery port would not be advisable. Movement by inland water would only entail multiple, loading
and unloading activities leading to additional charges and hence would increase the logistics cost of the
shipper.
Page 140 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
2. Possibility of rail connectivity to Thankassery port
As directed, the possibility of rail connectivity to Thankassery port, it alignment and indicative cost was
also explored.
2.1. Proposed route alignment
In terms of the feasibility of laying down the railway line, a survey was undertaken was undertaken from
the existing rail head to the port and the most probable route (with the minimal disruption to existing
structures) was chalked out. The most probable route that can be used as the rail corridor appears to be
on either the left or the right side of the road from the Police camp to the Thankassery port. The
proposed indicative rail alignment from the existing rail head to Thankassery port is indicated in the
diagram below
Figure 23 : Proposed rail alignment from existing rail head to Thankassery port
Source: Survey conducted by Atlas Survey Engineering System, Kollam
Page 141 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
The approximate rail length would be around 1800 meters. For laying the rail line, a corridor of
minimum 20 meters would be required. So approximately around 36000 sq. meter of land would be
required to be acquired (8.89 acres).
As indicated above, this corridor can be either on the right side or the left side of the road from the
Police Camp to the Thankassery port. The limitation however for laying down the rail line is the presence
of significant human habitation in the corridor. The details of such inhabitants and the various
structures are as follows:
Left side of the road
Police Camp to Kochuplamoodu Bridge Junction
1. S.P. Office - 1 number
2. Tiled roof residential Building – 5 numbers
3. Two storied shop – 6 numbers
4. Two storied residential building – 8 numbers
5. Three storied commercial building – 1 number
6. Three storied big hotel – 1 number
7. Banyan Tree – 1 number
Kochuplamoodu bridge junction to Kollam Port
8. Two storied co-operation building - 1 number
9. Empty Area - 1 number
10. Fishermen’s single storied residential building - 38 numbers
Right side of the road
S.P Office to Kochuplamoodu Bridge Junction
1. Temple
2. YMCA Office with empty frontage
3. S.N. Trust School with empty frontage
4. Congress Bhavan with empty frontage
5. Corowther Masnic hall with empty frontage
6. Vijayalekshmi Cashew’s Office with empty frontage
7. Tiled roof small shop - 8 numbers.
8. Two storied residential building – 2 numbers.
9. Tiled residential building – 1 number.
10. Indian Red Cross Society two storied with empty frontage
11. Empty Land
12. Two storied shopping complex
Kochuplamoodu bridge junction to Kollam Port ( May kindly check if the following structures fall
in the stretch of Kochuplamoodu junction to Kollam port)
13. Empty Land
14. Tiled residential building - 2 numbers.
15. Fishermen’s Single storied residential building - 28 numbers.
16. Empty land
17. Fishermen’s Single Storied residential building - 72 numbers.
Page 142 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
2.2. Cost estimates
The approximate cost details for the proposed rail line would be as follows
Sr
No
Heading Parameter Cost factor
In Rs.
million
Project cost factor
in Rs. million
1 Rail track cost Cost of developing the rail track per km 80.00
Indicative project cost for covering 1.8 km
from existing rail head to Thankassery
port
144.00
2 Land
acquisition cost
Cost of acquiring land at market rate per
acre
30.00
Cost of acquiring the indicative 8.80 acres
at market rate
266.70
3 Site
development
cost
Cost of site development per km 5.00
Cost of site development per 1.8 km 9.00
4 Miscellaneous
cost
Any other miscellaneous cost per km 1.00
Any other miscellaneous cost per 1.8 km 1.80
5 Total Project Cost in Rs. Million 421.50
Table 46: Rail connectivity cost details
2.3. Conclusions
Presently the inland movement of the cargo type being generated from the hinterland identified for
Thankassery port is mainly through road since the primary cargo generators are within the radius of 150-
200 kms from the port. Cargo generators in the secondary hinterland of Tamil Nadu if at all will use the
rail connectivity, though this cargo expected is not very significant due to the same being routed
towards Tuticorin port.
Factors such as the suitability of the alignment, connectivity to the rail mainline, safety aspects etc. are
under the purview of Indian Railways, no comments can be given regarding its feasibility at this stage.
The proposed alignment indicated is purely on the basis of availability of land and its connection to the
Thankassery port. Irrespective of whether the State Government develops the rail corridor directly or
through a BOT operation, it will be totally subject to approval by rail authorities.
The development of a railway line usually comes under the purview of Indian Railways (under the
Central Government). The state government assists in the land acquisition process and other clearances
required. Alternatively, the rail line could be developed by the Private Developer (through JV / SPV
route). If the Developer bears the entire costs, there would be a certain impact on the viability of the
project.
Page 143 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Accordingly, three scenarios has been worked out wherein the rail connectivity cost is apportioned to
various entities and the financial viability has been so calculated. The revised financial viability is
indicated in the financial analysis section of this note.
2.4. Road connectivity
In the draft DFR, under section 5.13 of Port Planning Chapter, evacuation of cargo by 4 possible
approach road options were indicated of which one option was through the Port gate via
Kochuplamoodu junction and then to Police camp ( around 2.5 km). Harbour Engineering Department
have initiated work in the above mentioned route including proposed acquisition of 1 acre of land near
proposed Kochuplamoodu bridge ( being built by PWD) for easy access of trucks from port road to the
proposed bridge. The indicative costing for the approach road has been worked out as under
Sr
No
Heading Parameter Cost factor
In Rs.
million
Project cost factor
in Rs. million
1 Approach road
cost
Indicative cost of construction of
approach road to National Highway per
km
36.00
Indicative project cost for covering 2.5 km
from port gate to
90.00
2 Land
acquisition cost
Cost of acquiring land at market rate per
acre
30.00
Cost of acquiring the indicative 1 acre at
market rate
30.00
3 Site
development
cost
Construction of road drain and foot path
(LS)
7.70
Electrification of port road ( L.S)
7.50
4 Total Project Cost in Rs. Million 135.20
Table 47: Approach road cost estimates
The cost estimates obtained from road / rail connectivity has been worked out in the revised financial
analysis and the same is enclosed in the subsequent section.
Page 144 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Query 4 - Reducing the time to start second phase – ( in the draft report it has been indicated as 2025).
Query 5 - If 20,000 or more DWT vessels need to come what need to be done and costs as the future requirements are larger vessels to reduce cost of transportation
Findings for the query 4 and 5 is given below -
1. Reducing the time to commence second phase The traffic projections presented in the draft DFR has taken into account cement traffic of around 6 lakh
tons from Ultra Tech Cement to start with. The cement so projected in the draft DFR could cater to the
South Kerala market.
After the submission of the draft DFR, there has been a proposal of interest from Mehta Group for
setting up a cement terminal of 5 lakh tons per annum at Thankassery port.
Presumably the cement traffic indicated by both Mehta Group and Ultra Tech individually will be
sufficient to cater to the South Kerala market and hence the traffic projections so indicated in the draft
DFR should hold good inspite of the additional cement cargo so indicated by Mehta Group.
However if we consider the cement traffic projected by Mehta Group as the additional cargo which
would also be supplied to the immediate hinterland it is observed that phase 2 which was earlier
estimated to commence from 2025 would commence from 2020.
Accordingly the revised traffic projections considering the additional cement traffic of 5 lakhs is
indicated in the table 4 below. The traffic projections indicated in the draft DFR has also been indicated
in Table 5 for comparative purpose.
2015 2020 2025 2030 2035 2040
Low 2,024,156 2,215,084 2,444,550 2,694,710 2,965,614 3,275,218
Medium 2,207,468 2,718,296 3,387,763 4,255,490 5,343,259 6,805,717
High 2,305,530 3,073,216 4,139,866 5,596,144 7,504,658 10,280,692
Table 48: Revised traffic projections in tonnes
Table 49: Traffic projections in tonnes as indicated in the draft DFR
2015 2020 2025 2030 2035 2040
Low 1,524,156 1,715,084 1,944,550 2,194,710 2,465,614 2,775,218
Medium 1,707,468 2,218,296 2,887,763 3,755,490 4,843,259 6,305,717
High 1,805,530 2,573,216 3,639,866 5,096,144 7,004,658 9,780,692
Page 145 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
2. Additional cost to be incurred in the event 20,000 dwt or more vessels berth at Thankassery.
Presently, the wharf has an available draught of 6.30 m but the structure is designed for a draught of
10.00 m after dredging, where by vessels of size upto 20,000 DWT can be directly berthed at wharf.
In the draft DFR, the vessel size that would call on Thankassery port has been kept at around 10,000 to
15,000 DWT due to the following reasons.
Thankassery port is primarily positioned as a feeder / coastal port. We do not envisage direct
berthing of international container vessels at Thankassery port given the existence of Cochin port in
the vicinity and the lack of adequate container cargo to attract an international container vessel to
call on Thankassery. Through Thankassery port, the container cargo coming from the hinterland of
Kollam and Trivandrum would be transshipped to Cochin port via feeder vessels of around 10,000
DWT. This would be good example of the hub and spoke arrangement where in the synergies of
both the ports would be utilized to eliminate the surface transportation cost and reducing the
logistics cost of the shipment
Cement is presently accounting for a dominant chunk of the bulk traffic cargo for Thankassery port.
The cement will be sourced from Gujarat. As a general practice, coastal movement of cement
usually occurs in vessel sizes of around 10,000 DWT mainly due to the draft restrictions of the jetties
where cement is loaded in Gujarat. Accordingly for the coastal movement of the cement from
Gujarat to Thankassery, vessels of maximum 15,000 DWT were considered.
In addition, the vessel sizing has also been arrived based on the principle that the existing
infrastructure facilities should be utilized to its full potential. Accordingly, the future investments for
strengthening of jetty, etc has been worked out based on the available operating constraints of the
existing facilities which has a limiting factor on the type of vessels it can accommodate.
In the event a 20,000 DWT vessel berths, the additional cost to be incurred is indicated below. However
the feasibility of the project vis-à-vis the cost to be incurred and the cargo volume to be generated also
has to be considered.
Sr
No
Parameter Project cost factor in
Rs. million
1 Additional cost for strengthening of the existing berth 44.00
2 Cost of dredging in Phase 1 76.00*
3 Total 120.00
Table 50: Additional cost to be incurred for berthing of 20,000 DWT vessels.
Maintenance cost of dredging per year ( @ 5% of capital dredging cost)
* - Cost pre-poned from Phase 2 to Phase 1
Page 146 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
6. Financial viability analysis
The financial analysis of the project has been re-worked based on:
the revised traffic as indicated in table 48-
Addition of the rail and road connectivity cost as indicated in table 46 and 47
Addition of cost for strengthening and dredging to accommodate 20,000 DWT vessels as indicated in
table 50.
While the additional cost to accommodate the 20,000 DWT vessels would be required to be borne by
the Developer, the rail / road connectivity cost can either be fully incurred either by the State
Government or by the private developer. Alternatively the rail / road connectivity cost can be
apportioned equally between the government agency and the private developer. In case the private
developer needs to invest for the road / rail connectivity, the same will be routed through a SPV.
Accordingly, based on the various permutations / combinations of the investment pattern for road / rail
connectivity, the following scenarios have been considered.
Scenario 1 The rail and road connectivity cost to be borne by 100% by the Private Developer
through a SPV
Scenario 2 50% of the rail and road connectivity cost is to be borne by the Private Developer
through a SPV and the balance 50% will be incurred by the Government.
Scenario 3 50% of the rail connectivity cost to be borne by the Private Developer through a SPV,
while the 100% road connectivity cost would be borne by the government
Scenario 4 100% of the rail and road connectivity cost is borne by the Government
The financial viability analysis for the revised traffic figures based on the above four scenarios has been
worked out. In addition, a comparative analysis has been undertaken for the above referred scenarios
considering the following two options -
1. Option 1 - Maximum vessel size berthing at the jetty is 20,000 DWT
2. Option 2 - Maximum vessel size berthing at the jetty is 15,000 DWT.
A diagrammatic representation of the financial analysis so undertaken is indicated below
Page 147 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
The summarized financial viability findings and our recommendations are indicated below. The detailed
financial workings (Profit & Loss account, financial indicators statement) are enclosed as Annexures 3.1
to 13.8 at the end of this section.
3.1. Scenario 1 - The rail and road connectivity cost to be borne by 100% by the Private Developer
through a SPV
Description Option1
( maximum vessel size of
20,000 DWT)
Option 2
( maximum vessel
size of 15,000 DWT)
Internal Rate of Return (IRR) in % 8.70 9.35
Net Present Value (NPV) in Rs. Million (440.52) (298.08)
Payback period in years 17 17
DSCR Consolidated 1.29 1.43
3.2. Scenario 2 - 50% of the rail and road connectivity cost is to be borne by the Private Developer
through a SPV and the balance 50% will be incurred by the Government.
Description Option1
( maximum vessel size of
20,000 DWT)
Option 2
( maximum vessel
size of 15,000 DWT)
Internal Rate of Return (IRR) in % 9.77 10.61
Net Present Value (NPV) in Rs. Million (190.31) (46.59)
Payback period in years 16 16
DSCR Consolidated 1.55 1.69
3.3. Scenario 3 - 50% of the rail connectivity cost to be borne by the Private Developer through SPV,
while the 100% road connectivity cost would be borne by the government.
Description Option1
( maximum vessel size of
20,000 DWT)
Option 2
( maximum vessel
size of 15,000 DWT)
Internal Rate of Return (IRR) in % 10.10 10.99
Net Present Value (NPV) in Rs. Million (129.63) 14.49
Payback period in years 16 15
DSCR – Consolidated 1.62 1.77
3.4. Scenario 4 - 100% of the rail and road connectivity cost will be borne by the Government.
Description Option1
( maximum vessel size of
20,000 DWT)
Option 2
( maximum vessel
size of 15,000 DWT)
Internal Rate of Return (IRR) in % 11.35 12.51
Net Present Value (NPV) in Rs. Million 61.80 205.09
Payback period in years 15 15
DSCR – Consolidated 1.88 2.10
Page 148 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
3.5. Conclusions
Based on the above analysis, only in Scenario 4, the project becomes viable for a private developer.
Therefore the project will be viable to a private developer only if the connectivity cost of the road and
rail (if required) are borne by the Government. The developer will be required to put in the additional
investment required for strengthening the existing berth and dredging to accommodate 20,000 DWT
vessels. However from the financial analysis it is observed that the profitability of catering to a 15,000
DWT vessel is more attractive than for 20,000 DWT vessels.
Page 149 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Annexure 13.1
Scenario 1 - The rail and road connectivity cost to be borne by 100% by the Private Developer through
SPV
Option 1 - maximum vessel size of 20,000 DWT
Page 150 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Annexure 13.2
Scenario 1 - The rail and road connectivity cost to be borne by 100% by the Private Developer through
SPV
Option 2 - maximum vessel size upto 15,000 DWT
Page 151 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Annexure 13.3
Scenario 2 - 50% of the rail and road connectivity cost is to be borne by the Private Developer through
SPV and the balance 50% will be incurred by the Government.
Option 1 - maximum vessel size of 20,000 DWT
Page 152 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Annexure 13.4
Scenario 2 - 50% of the rail and road connectivity cost is to be borne by the Private Developer through
SPV and the balance 50% will be incurred by the Government.
Option 2 - maximum vessel size upto 15,000 DWT
Page 153 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Annexure 13.5
Scenario 3 - 50% of the rail connectivity cost to be borne by the Private Developer through SPV, while
the 100% road connectivity cost would be borne by the government
Option 1 - maximum vessel size of 20,000 DWT
Page 154 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Annexure 13.6
Scenario 3 - 50% of the rail connectivity cost to be borne by the Private Developer through SPV, while
the 100% road connectivity cost would be borne by the government
Option 2 - maximum vessel size upto 15,000 DWT
Page 155 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Annexure 13.7
Scenario 4 - 100% of the rail and road connectivity cost will be borne by the Government
Option 1 - maximum vessel size of 20,000 DWT
Page 156 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
Annexure 13.8
Scenario 4 - 100% of the rail and road connectivity cost will be borne by the Government
Option 2 - maximum vessel size upto 15,000 DWT
Page 157 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
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whether in writing or oral are provided solely for the use of the Client in connection with the services
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DTTIPL does not accept any responsibility or liability for the projections or any losses that may be
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Page 158 of 158 (c) 2010 Deloitte Touche Tohmatsu India Private Limited
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