Project Information Memorandum - Development ... - Port of Chennai

Project Information Memorandum -Development of Barge Handling Facilityat Chennai Port on DBFOT basisCHENNAI PORT TRUSTJanuary 2012

Development of Barge handling Facility at Chennai Port on BOT basisJanuary-2012DISCLAIMERThis Project Information Memorandum (“PIM”) is intended to provide interested parties with abrief background of the proposed barge handling facility at Chennai Port. The PIM is made available forinformation purposes only and does not constitute an offer. No representation or warranty of any kind ismade by Chennai Port Trust (ChPT) and the no liability is assumed by in connection with the use ofinformation contained in this memorandum by the recipient. The PIM is provided to facilitate therecipient for the sole purpose of appraisal of the project and is not intended to serve as a basis for decisionto participate in the project. Each recipient is expected to make independent investigation and obtainindependent advice as deemed necessary for the decision to participate in the project.For Additional Information, Please contactChief EngineerChennai Port TrustTel No. : +9144 25360646Deputy Chief Engineer (Major Projects)Chennai Port TrustTel No.: +9144 253907502

Development of Barge handling Facility at Chennai Port on BOT basisJanuary-2012Table of Contents1. Introduction............................................................................................................................. 42. Brief Overview of the Chennai Port Location, Existing Facilities ......................................... 42.1 Port Location.......................................................................................................................... 42.2 Existing PortFacilities……………………………………………………………………....43. Development Plans .............................................................................................................. 83.1. Port Connectivity .................................................................................................................. 8Highway/ Roads Connectivity .............................................................................................. 8Rail Link ............................................................................................................................... 83.2. Port Infrastructure Development .......................................................................................... 83.3. Overview of Site conditions at Chennai Port........................................................................ 93.4. Rainfall.................................................................................................................................. 93.5. Temperature .......................................................................................................................... 93.6. Humidity ............................................................................................................................... 93.7. Tides...................................................................................................................................... 93.8. Waves.................................................................................................................................. 103.9. Current ............................................................................................................................... 103.10. Port Craft............................................................................................................................ 104. The Barge Handling Project .............................................................................................. 105. Demand Forecast for the proposed barge handling facility................................................ 125.1. Overview of Industries contributing to liquid cargo in the region ..................................... 125.2. Traffic Forecasts for The Proposed Facility ....................................................................... 133

Development of Barge handling Facility at Chennai Port on BOT basisJanuary-20121. IntroductionChennai Port is one among the twelve major ports in the country and the second largestport in India in terms of cargo volume handled per annum. It is also the second largestcontainer port in India. It is a gateway port for the vast hinterland of the States of TamilNadu, Karnataka and Andhra Pradesh. The port is under the administration of the ChennaiPort Trust (ChPT). The Traffic through the Port has been increasing over the years.2. Brief Overview of the Chennai Port Location, Existing Facilities2.1 Port LocationChennai Port is a major sea-port situated on the east coast of India (13° 06’ N & 80° 18’ E).The following section briefly describes the facilities at the port followed by a layoutdiagram of the port at Pg. No.7.2.2 Existing Port Facilities:The port has three Docks, 24 berths and a draft ranging from 12m to 16.5m. It has becomea hub port for Containers, Cars and Project Cargo in the East Coast. The long term planfor Chennai Port envisages that the Port will mainly handle 4C’s i.e. Containers, Cars,Cruise and Clean Cargo. Port has land area of about 237 hectares with storage capacity of1.6 million sq.m.The Chennai port has a Terminal Shunting Yard and runs its own Railway operationsinside the harbour. The port is having railway lines running up to 68 kms and handlesabout 25% of the total volume of the cargo with 12 nos. of 700 HP & 2 nos. 1400 HPDiesel Locos. The Chennai Port is also having an internal road network of 27.5 Kms.The Berth facilities are tabulated below:Sl.No.BerthTypeScheduledDepth(Metres)Quay Length(Metres)DR. AMBEDKAR DOCK1. North Quay General 8.50 198.002. West Quay 1 General / Other Liquid Bulk 11.0 170.64

Development of Barge handling Facility at Chennai Port on BOT basisJanuary-2012Sl.No.BerthTypeScheduledDepth(Metres)Quay Length(Metres)3. West Quay 2 General 12.0 170.64. Centre Berth General 12.0 170.65. West Quay 3 General 12.0 170.66. West Quay 4 Passenger/ Fertilizer /General 11.0 170.67. South Quay 1 Fertilizer / General 9.5 246.08. South Quay 2 Fertilizer / General 9.5 179.0SECOND CONTAINER TERMINAL (SCB)9. SCB 1 Containers 12.010. SCB 2 Containers 12.011. SCB 3 Containers 12.0820.0JAWAHAR DOCK (JD)12. JD 1 Food grains / General 10.4 218.3313. JD 2 Coal / Other Liquid Bulk 11.0 218.3314. JD 3 Food grains / General 10.4 218.3315. JD 4 Other ores / Coal 11.0 218.3316. JD 5 Food grains / General 10.4 218.3317. JD 6 Other ores / Coal 11.0 218.33BHARATHI DOCK (BD)18. BD 1 Oil 16.0 355.6519. BD 2 Ore 17.4 382.020. BD 3 Oil 17.4 307.505

Development of Barge handling Facility at Chennai Port on BOT basisJanuary-2012Sl.No.BerthTypeScheduledDepth(Metres)Quay Length(Metres)FIRST CONTAINER TERMINAL (CT)21. CT 1 Containers 13.4 200.022. CT 2 Containers 13.4 200.023. CT 3 Containers 13.4 200.024. CT 4 Containers 13.4 285.06

Development of Barge handling Facility at Chennai Port on BOT basisJanuary-2012Figure 1: Layout of Chennai Port7

Development of Barge handling Facility at Chennai Port on BOT basisJanuary-20123. Development Plans3.1 Port ConnectivityHighway/ Roads ConnectivityThree National Highways passes through the city of Chennai form the artery of its road network.The Golden Quadrilateral Road Project being implemented by NHAI connects Chennai toKolkata on the East by NH-5. Chennai is connected to Mumbai via Bangalore in the west byNH-4 which is also part of the Golden Quadrilateral network. Another important NationalHighway NH-45 connecting Chennai with Dindigul has been extended to Theni in the south.The last stretches of 15-20 kms from Highways on all directions to the Chennai Port throughChennai city are congested. This has called for regulated movement of heavy vehicles during theday. Thus the goods penetration in the hinterland is offset by the shorter but complex city transit.The regulation has ensured that heavy vehicles can run on city roads only during the night time.This has created constraints to the Chennai Port from the perspective of cargo evacuation. Toovercome this, the NHAI is implementing the Elevated Four Lane Port Link road (PPP basis)from Gate-10 of the port to Maduravoyal in the outskirts of the city. The 19 km Elevated FourLane Port Link road is seen as a boon to the port to solve evacuation issues.Evacuation on the Northern side of the port happens through traffic movement on EnnoreExpressway to Gate No.1 of Chennai Port is through the entry to the fisheries harbour. Thisnarrow section through the harbour causes traffic hold up leading to inconvenience. Thereforethis road is also proposed to be upgraded under Ennore-Manali Road Improvement Project(EMRIP) with Chennai Port Trust (ChPT) participating in the same through an equity stake. TheProject envisages improvement of about 30 km road network in North Chennai with theobjective of establishing efficient road connectivity from Chennai and Ennore ports to NHnetwork.Rail LinkChennai Port is well connected with the National Railway Network. The Port is linked toSouthern Railway network via Chennai Beach Railway Siding which connects Chennai Port toSouthern parts of Tamil Nadu and via Royapuram Siding which connects Southern RailwayTrunk line to Kolkata, New Delhi, Bangalore, Coimbatore etc.3.2 Port Infrastructure DevelopmentThe Port to enhance the capacity of cargo handling has the following development plans apartfrom this proposal.i. Development of Mega Container Terminal with a continuous quay length of 2 km underPPP mode.8

Development of Barge handling Facility at Chennai Port on BOT basisJanuary-2012ii. Development of Rajiv Gandhi Dry Port and Multimodal Logistics Hub in SIPCOTIndustrial Park at Mappedu, Sriperumbudur under PPP mode.iii. Development of Ro-Ro cum multipurpose berth and Multi level car parking facility atBharathi dock under PPP mode.iv. Master plan for Port Railway, Realigning Rail and Road network.v. Elevated Four Lane Port Link road from Chennai Port to Maduravoyal leading to NH4under NHDP VII is under progress to enhance the hinterland connectivity by way ofround-the-clock access to Port.vi. Ennore - Manali Road Improvement project to the north of Chennai Port to connect theNH under SPV.vii. The break water extension from existing outer arm in the proposed Mega ContainerTerminal under PPP mode will be utilized to develop deep draft oil berth for handlingVery Large Crude Carrier Vessels (VLCCs).3.3 Overview of Site conditions at Chennai Port3.4 RainfallChennai’s normal rainfall, in South West Monsoon (June to September) is 443.5 mm, in NorthEast Monsoon (October to December) it is 753.1 mm, in winter season (January to February) it is37.3 mm and in Hot weather (March to May) it is 64.2 mm. Average Monthly rainfall variesfrom 7 mm in April to 308 mm in November. The average annual rainfall is 1298.1 mm.3.5 TemperatureThe mean minimum temperature is 18 °C in January and 26.8 °C in May. The mean highesttemperature is 29.3 °C in December and 39.6 °C in May.3.6 HumidityThe relative humidity varies from 70% to 83% from September to May and 60% to 69% in restof the year.3.7 TidesThe tides in Chennai Port are semi-diurnal in nature i.e. occurrence of two high and two lowwaters every day. The mean tidal range at Chennai is of the order of 0.914 m to 1.219 m atspring and between 0.805 m to 0.610 m at neap tides. The tidal level information from thehydrographic chart of Geodetic and Research branch, Survey of India is as below,(w.r.t. Chart Datum)Highest High Water Level (HHWL) + 1.65mMean High Water Spring (MHWS)Mean High Water Neap (MHWN)+ 1.15 m+ 0.84 m9

Development of Barge handling Facility at Chennai Port on BOT basisJanuary-2012Mean Sea Level (MSL)Mean Low Water Neap (MLWN)Mean Low Water Spring (MLWS)Indian Springs Low Water Level (CD)+ 0.54 m+0.43 m+0.14 m+ 0.00 m3.8 WavesWaves in the deep water around Chennai harbour are ranging from 0.4m to 2.0m height and thepredominant being 0.4 m to 1.2 m high with wave periods predominantly in the order of 4 to 10seconds. During Cyclone season, waves of height exceeding 2.5 m are common.Wave directionPredominant direction during South West Monsoon145 0 from NorthPredominant direction during North East Monsoon 65 0 from North3.9 CurrentThe following details of current prevalent off the Coromandel Coast apply particularly to thevicinity of Chennai.In January, the current sets South Westward or Northward at a rate of from 1 to 11/2 knots, but itis irregular in February (Northward parallel with the Coast 11/2 knots). In March, April and Maythe current sets Northward from 1 to 3 knots, but in May from 1 to 2 knots. In June variable butsometimes southward and weak in July and in August southward or against the wind from 2 to 3Knots at times. In September the current sets South and South-westwards and in OctoberSoutherly along the Coast. In November and December the current sets South-westerly andsoutherly along the Coast.3.10 Port CraftChennai Port currently has 2 Dredgers, 7 Tugs, 5 Pilot Launches, 3 Mooring Launches, 1 Multipurposeharbour vessel, 1 Oil recovery vessel, 10 Shore Electric cranes, 3 Mobile cranes, 20Fork Lifts, 2 Pay Loaders and 14 Diesel Loco for efficient operation of the Port.4. The Barge Handling ProjectChennai Port handled about 61 million tonnes of cargo in the year 2010-11. The vessel traffic atthe port has also been growing steadily over the past five years as shown below10

Development of Barge handling Facility at Chennai Port on BOT basisJanuary-2012Figure: Vessel Traffic at Chennai PortIn the wake of increasing vessel movements and vessel sizes 1 , the bunkering requirement forvessels at Chennai Port has increased considerably. The total demand for bunkering at ChennaiPort stood at 174,835 tonnes for the year 2009-10. This consists of bunkering of furnace oil anddiesel oil. The following table shows the total bunkering activity at the port for the years 2005-06to 2009-10Sl. No. Year In Tonnes1 2005 - 2006 57,1742 2006 - 2007 82,0233 2007 - 2008 103,7044 2008 - 2009 120,2585 2009 - 2010 174,835Table: Bunkering Demand at Chennai Port for the last 5 yearsBunkering activity at the Chennai Port is currently being carried out through the barge jetty inthe extreme northern end of Bharathi Dock between BD2 and BD1& 3. The existing barge jettyis a temporary facility having a length of around 30 metres. The available draft in the jetty isabout 2.5- 3.0 metre.1 Globally, Shipping lines are opting for larger vessels due to economies of scale11

Development of Barge handling Facility at Chennai Port on BOT basisJanuary-2012This jetty is currently being used exclusively by Indian Oil Corporation Limited (IOCL) forbunkering of Navy, Coast Guard, Bulk carrier, Container ships etc. The bunkers cater to bothcoastal and foreign ships.On account of the increasing trend of traffic in the port, the demands of the bunker requirementshave outpaced the supply of infrastructure needed for bunkering. This has necessitated the needfor augmenting the bunkering capacity. To bridge this infrastructure gap and to augment thebunkering capacity at the Port, The Chennai Port Trust (ChPT) has planned to develop a Bargehandling facility in Bharathi dock. The proposed length of the jetty is 150 m and the width is 15m. The dimensions of the jetty have been proposed to accommodate barges with a carryingcapacity of 1000MT to 3000 MT. In addition to the barge jetty, a trestle has been proposed toconnect the jetty with the land through a 5 metre wide approach trestle with a length of 40m. Toaccommodate barges of size 4000 DWT, a minimum draft of -9.0 m is desirable. Thus, dredgingto the tune of 10,000 m 3 is envisaged.The cost of development of the barge jetty and allied infrastructure including dredging is shownbelow.Estimated cost of Development of Barge handlingfacility and associated facilitiesRs. 26 crore 2 (Approx.)The Chennai Port Trust (the “Authority”) proposes to undertake “Development of Bargehandling facility in Bharathi Dock at Chennai Port” (the “Project”) through Public-PrivatePartnership (the “PPP’) on Design, Build, Finance, Operate and Transfer (the “DBFOT”) basisand has decided to carry out the bidding process for selection of the developer who offers the“Highest Revenue Share”.5. Demand Forecast for the proposed barge handling facility5.1 Overview of Industries contributing to liquid cargo in the regionFurnace Oil / Bunker FuelFurnace Oil (FO) is a dark viscous residual fuel obtained by blending mainly heaviercomponents from crude distillation unit, short residue and clarified oil from fluidized catalyticcracker unit.In India, furnace oil is the third largest cut off the crude barrel after High Speed Diesel (HSD)and Superior Kerosene Oil (SKO). But unlike High Speed Diesel (HSD) and SKO, its prices arenot administered by the Government. The product is freely importable.Internationally, furnace oil is known as fuel oil and is traded in many varieties based on itsspecifications of viscosity and sulphur percentage. Majority of fuel oil is traded in two varieties2 This amount does not include the likely financing costs, physical contingencies etc., of the project cost12

Development of Barge handling Facility at Chennai Port on BOT basisJanuary-2012180 CST and 380 CST (CST- Centistokes, means the measure of viscosity of the product).Furnace oil 380 CST for bunkers is the preferred fuel in the main engine of the vessels, operatedby many ship-liners. The demand for FO 380 CST at Chennai has been very encouraging. IndianOil Corporation Limited (IOCL) and its subsidiary Chennai Petroleum Corporation Limited(CPCL) are seen as the major contributors to the traffic for the proposed barge handling facility.Vegetable OilIndia imports half of its edible oil requirement. This makes India, third-largest importer of edibleoil in the world. Vegetable oil consumption has increased following a rise in household incomesand consumer demands. The country imports Soya oil from countries like Argentina & Braziland palm oil from Malaysia & Indonesia.Major Industrial houses handling large quantities of edible oil at Chennai Port include:• Ruchi Soya Industries Limited• M/s. Suraj Agro Ltd• Integrated Service Process Private Limited (ISPPL)4.1 Traffic Forecasts for the Proposed FacilityBunkering oil is seen as the major cargo for the proposed facility. This demand is seen as aspillover from the existing facility being operated by Indian Oil Corporation. Based on theprojections given by Indian Oil and the interests shown by other Oil marketing Companies, thedemand for bunkering at the port shown below; Also, edible oil is seen as the next majorcommodity to be handled at the proposed facility. The demand for both these commodities isshown below.Traffic projections for Barge Handling Jetty( in '000 tons)Year Bunker Oil Edible Oil2011-12 307 1132012-13 334 1412013-14 362 1742014-15 389 2122015-16 416 2542016-17 480 3012017-18 507 3522018-19 535 4082019-20 562 4682020-21 589 5332021-22 617 6032022-23 698 6772023-24 725 75613

Development of Barge handling Facility at Chennai Port on BOT basisJanuary-2012Traffic projections for Barge Handling Jetty( in '000 tons)Year Bunker Oil Edible Oil2024-25 753 8392025-26 780 9272026-27 807 1,0202027-28 835 1,1172028-29 952 1,2192029-30 979 1,3252030-31 1,007 1,4362031-32 1,034 1,5512032-33 1,062 1,6712033-34 1,089 1,7962034-35 1,116 1,9252035-36 1,234 2,0592036-37 1,261 2,1972037-38 1,288 2,3402038-39 1,316 2,4882039-40 1,343 2,6402040-41 1,370 2,7962041-42 1,398 2,9582042-43 1,425 3,1232043-44 1,452 3,294Table: Demand projections for Bunker Oil and Edible oil for the proposed barge handlingfacilityIn addition to bunkering fuel and edible oil, other cargoes that are envisaged to be handled at theproposed facility include• Vegetable oil (Crude and Refined)• Furnace Oil (FO)• Other Non-Hazardous Liquid Cargo• MolassesMany players have shown interest in using the services of Chennai port for their requirements forhandling of liquid cargo. Based on these, the potential demand for other liquid cargo is as seenbelow;14

Development of Barge handling Facility at Chennai Port on BOT basisJanuary-2012Cargo Type Volume (MTPA) Growth Rate per annumOther liquid cargo 60000 15%Bitumen 120000 15%Fresh water 120000 15%Table: Demand for other liquid cargoGiven the demand, this Project is seen to add value to the developer in the form of good returnson investment and to the port in the form of improved bunkering capacity.15