Indian Port Sector

INFRASTRUCTURE DEVELOPMENT
CORPORATION LIMITED
 Objective

ƒ To provide an overview of the Port sector

in the country
ƒ To share IL&FS Group experience in
development and implementation of Port
projects for the Public and Private sector
Background
 Importance of Ports

ƒ Ports Today
¾ Are dynamic nodes in the Supply chain involving
complex international production / distribution
network;
¾ Have become Integrated Transport Centers and
Logistics platforms for International trade, and
¾ Stimulate Trade and Regional development
¾ Developed under Land-lord Port and Private Port
Model in India
¾ Opportunities for Private Sector to either act as Port
Operator at Major Ports or Port Developer at minor
Ports
 Location of Ports in India

ƒ 12 Major Ports
ƒ 187 Minor Ports
Coast line of 7517 Km

Ennore
 Throughput at Ports in India
• Cargo handled 635 mn tonnes in
2006-07 with Growth rate of
about 9.3 %
• Containerized Cargo grown at
14% per annum in last five years
• Ports handle around 95% of
India’s total trade in terms of
volume and 70 % in terms of
value
• Cargo Share of Minor Ports is
increasing

ƒ Major Projects underway:

-“Sethusamundram”: Dredging of the Palk
Strait,
-National Maritime Development Programme
for modernization and expansion of port
capacities

ƒ Business Plan of Major Ports are

under preparation
Source: Port Statistics, Transport Research Wing, Department of Ports
 Future Growth Estimates of Ports in India

ƒ Cargo handling at all the ports is projected to grow at 7.7% p.a. till
2013-14 with Minor ports growing at a faster rate of 8.5% compared to
7.4% for the Major ports

ƒ Traffic estimated to reach 960 million tonnes by 2013-14

ƒ Containerized cargo is expected to grow at 17.3% over the next 9

years

ƒ The New Foreign Trade Policy envisages doubling of India’s share in

global exports in next five years to $150 billion

ƒ Growth in merchandise exports projected at over 13% p.a. underlines

the need for large investments in port infrastructure

ƒ Investment need of $13.5 billion in the major ports under National

Maritime Development Program (NMDP) to boost infrastructure at
these ports in the next nine years

Source: www.investmentcommission.in
 Public Private Partnership in Port Sector

POLICY

ƒ 100% FDI under the automatic route is permitted for port development projects

ƒ 100% income tax exemption is available for a period of 10 years

ƒ Tariff Authority for Major Ports (TAMP) regulates the ceiling for tariffs charged by
Major ports/port operators (not applicable to minor ports)

ƒ A comprehensive National Maritime Policy is being formulated to lay down the vision
and strategy for development of the sector till 2025

Projects developed through PPP

ƒ Significant investment on BOT basis by foreign players including Maersk (JNPT,

Mumbai) and P & O Ports (JNPT, Mumbai and Chennai), Dubai Ports International
(Cochin and Vishakhapatnam) and PSA Singapore (Tuticorin)

ƒ Minor ports are being developed by domestic and international private investors:
Pipavav Port by Maersk and Mundra Port by Adani Group (with a terminal operated
by P & O), Gangavaram under construction by Consortium lead by DSV Raju
Port Sector Experience of IL&FS
 Issues in Port Development

ƒ Issues to be considered before Project Development of Ports

} Environmental Clearance

} Land Acquisition

} Commercial Viability

} Hinterland Connectivity- Rail/Road

} Exit of foreign partners due to delays

} Financial closure not being achieved

} Litigations
 Vizhinjam – Transshipment Hub
ƒ Location: Kerala
ƒ Project: International Deepwater Seaport and Container Transshipment Terminal
ƒ IL&FS as Project Advisor to Govt. of Kerala to assist in project development and structuring
ƒ Initial Phase - A total of 6 berths including:
} Container Terminals (for 2 Main and 3 feeder Vessels)
} 1 Multipurpose Terminal (feeder/ general cargo/Passenger)
ƒ Estimated total investment in Initial Phase - Rs. 23.90 bn (US$ 575 million or Euro 430
million)

ƒ USP:
ƒ Proximity to international sea route
ƒ Natural water depth upto 24 m in one nautical mile of coast
ƒ Least Littoral transport: low dredging requirement
ƒ Natural all-weather harbour advantage
ƒ Immediacy to national/regional road, rail network
ƒ Flexibility in design and expansion being Greenfield project
ƒ Close to Thiruvananthapuram city that has an International airport, human resource
and social infrastructure
ƒ Status:
} Project under re-bidding process because of non-accord of necessary clearance of the
preferred bidder by Government of India
 Gangavaram Port…
ƒLocation: 15 kms south of Visakhapatnam Port (Andhra Pradesh)

ƒGangavaram Port Limited incorporated as the Special Purpose Company to develop the
Port

ƒPort to be developed as an all-weather deepwater multipurpose port

ƒThe Andhra Pradesh Industrial Infrastructure Corporation (APIIC) has entered into a
Project Development and Promotion Partnership (PDPP) with IL&FS to develop the
project.

Salient Features of Initial Phase Development

ƒ6 berths(Iron-ore 1; Coal 2; Other Dry Bulk 1; Multipurpose 1; Containers 1)
ƒDepth in harbour - 21 m
ƒDesign vessel size - 200,000 DWT (Largest that can berth at any Indian Port)
ƒHarbour water spread area - 400 acres
Present Status
ƒConcession Agreement Signed with Consortium lead by DSV Raju in August 2003
ƒFinancial Closure Achieved
ƒConstruction activities began
 Dighi Port…
ƒ Location: Dighi Bay of Rajpuri Creek, about 50 nautical miles South of JNPT
ƒ Promoter: Balaji Infrastructure Projects Limited (BIPL)

ƒ BIPL has incorporated an SPV – Dighi Port Ltd (DPL) for developing and
implementing the Project.

ƒ Role of IL&FS as Co-Developer and Advisor to the Project:

} Part Finance the Project
} Identify Strategic Investors/Partners
} Assist in Project Development
} Develop the Business Plan
} Develop the Financing Strategy
} Mobilize Financing
ƒ Present Status
} Substantial part of the Engineering studies have been completed. Balance
studies are underway.
} All the approvals including approval from Ministry of Environment and Forests,
Government of India have been obtained.
} Discussions are on with potential Users, Sub-Concessionaires for berths and
Partners for developing the transportation links.
 Rewas-Aware Port…
ƒ Location: South of the Karanja Creek (Maharashtra) about 10 km South of JNPT.
ƒ Promoter: Amma Lines Ltd. (ALL)
ƒ Project: All weather deep draft port to be implemented in 3 phases with initial phase
investment of Rs. 40 bn

ƒ Role of IL&FS as Co-Developer and Project Advisor:

} Part Finance the Project
} Identify Strategic Investors/Partners
} Assist in Project Development
} Develop the Business Plan
} Develop the Financing Strategy
} Mobilize Financing

ƒ Present Status
} IL&FS and ALL have jointly incorporated an SPV for project development.
} Substantial part of the Engineering studies have been completed.
} Environment related studies are complete.
} Public Hearings were successfully completed.
} Work is underway for obtaining approval under Coastal Zone Management Plan
from the Government of Maharashtra.
} Discussions are on with potential Users, Sub-Concessionaires for berths and
Partners for developing the transportation links.
 Deep Sea Port in West Bengal
ƒMinistry of Shipping, Road Transport & Highways (MoSRTH) nominated Department of
Shipping (DoS) as Nodal Agency to develop a Modern Deep Sea Port on Coastline of
West Bengal through Private Sector Participation (PSP)

ƒThe deep sea green-field port with complete range of services and facilities is proposed

o As the existing draft at Haldia/ Kolkata Dock System not suitable for handling
large and modern vessels AND

o To meet growing demand of port facilities due to accelerated economic growth

ƒDoS proposes to appoint a Consultant for preparation of Detailed Project Report and
Master Plan for the proposed project, including project management of implementation

ƒ DoS retained IL&FS to handhold DoS and Indian Ports Association (IPA) in above
consultant selection process
Present Status
ƒIL&FS in consultation with DoS prepared and finalized the RFP
ƒRFP issued to 7 shortlisted consultants
 IL&FS: Format of Services
ƒ IL&FS may provide following levels of intervention
} Project cum Financial Advisor
} Co-developer/ Partner
} Stackholder (optional)

ƒ To
} Port Trusts/ Authorities
} Maritime Boards/ Agencies
} Private Developers / Entrepreneurs
} Others

ƒ For
} Port Proposal
} Other Maritime Activities
ƒ Ship Building Yard
ƒ Ship Breaking Yard
ƒ Inland Water Transport
ƒ Port Connectivity
ƒ Port Led Development
ƒ Tourism
ƒ Others
 IL&FS: Project Development Cycle

Initial Project Screening

Project Documentation Technical Close

•Detailed Feasibility and Project Report •Formation of Bid Evaluation & Review Committee
•Investment Banking Report •Qualifying Criteria and Selection Methodology
•Environmental and Social Assessment Report •Issue of advertisement and Project Marketing
•Risk Management Plan •Short listing of Operators/Developers
•Bidding Documents •Selection of Operator/Developer
•Contract Documentation •Finalization of Contract
•Project Information Memorandum

Financial Close
•Financial Requirements
•Merchant Banking
 Range of IL&FS Services

IL&FS provides services for:

Î Screening/Scoping: Include establishing initial feasibility and identifying critical
issues.
Î Procurement of Experts: Arranging domestic/ International technical expertise
Î Preparation of Project Documentation: Includes preparation of a
comprehensive project document.
Î Preparation of Business Plan: Includes Marketing Strategy, Competition
Analysis, Vertical Integration, etc.
Î Due Diligence/ Appraisal: Project Proposal
Î Bid Process Management: After taking all the statutory clearances, competitive
bidding will be undertaken to identify the Developer/ Operator.
Î Awarding of the Project: After due- diligence and evaluation the project will be
awarded to the successful bidder for implementation.
Î Partner Search: Arranging and negotiations with Co-developer, Operator
Î Financial closure: Mobilization of equity, Debt, etc to achieve financial closure
Î Supervision: During construction and thereafter during concession period
 Contact
Mr. Saibal De
Vice President
IL&FS Infrastructure Development Corporation Ltd.
1st Floor, Aum Plaza, No. 76, 3rd Cross
Residency Road, Near Hotel Ballal Residency,
Bangalore - 560 025
Phone : + 91 80 4034 3333 (EPBX) Fax : + 91 80 4034 3310
Mob: 93428 22204 Email: saibal.de@ilfsindia.com

Mr. Prakash Gaur Mr. T. R. Rao

Senior Manager Assistant Vice President
IL&FS Infrastructure Development IL&FS Infrastructure Development
Corporation Ltd. Corporation Ltd.
301, Dev-Arc, Opposite Big Bazaar, 1st Floor, Aum Plaza, No. 76, 3rd Cross
Near Fun Republic, S.G.Highway, Residency Road, Near Hotel Ballal Residency,
Ahmedabad-380 015 Bangalore - 560 025
Tel: +91-79-4020 6211 Phone : + 91 80 4034 3333 (EPBX)
Fax: +91-79-4020 6299 Fax : + 91 80 4034 3310
Mob: +91 9898079323 Mob: + 91 9342440704
Email: prakash.gaur@ilfsindia.com Email: raghu.rao@ilfsindia.com
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