Enayam Port

Tamil Research Institute
RAPID TECHNO-ECONOMIC FEASIBILITY REPORT FOR
DEVELOPMENT OF COLACHEL PORT AT TAMILNADU
FINAL REPORT
Cost of Diesel
Repair & Maintenance - Civil
Repair & Maintenance - Equipment
Insurance
Labour, salary and Administrative Cost
52.76 INR/ ltr
1.0% of civil assets
2.0% of equipments
1.0% of gross fixed assets
40.0% of total O&M Cost
Table 50: O&M cost assumptions
The escalation rate for O&M costs has been taken as per the Wholesale Price Index (WPI). The CAGR for WPI
from 2004 to 2014 is 6.6%. The escalation rate has been tapered down over the concession period, from 6%
in first 15 years to 5.5% in the last 15 years.
13.1.6. Funding structure
The funding structure has been assumed as per industry benchmarks for port projects that developed through
private sector participation. A debt-equity ratio of 70:30 has been assumed. Other details of the funding
structure are provided in the table below.
Debt: Equity 70:30
Interest Rate 12.5%
Moratorium
3 years
Repayment Period
12 years
Syndication Fee 1.0%
Cost of Equity 16 - 18%
WACC 10.6%
Table 51: Assumptions for Funding Structure
The interest rate and debt terms have been used as per the terms of commercial lending by Indian banks for
large infrastructure projects. In case, government is able to procure funding from multilateral and bilateral
agencies such as ADB, World Bank, JICA etc., the interest rates could be around 1 - 3% and the payback
period could be up to 30 years. The VGF required in that case, maintaining an equity IRR of 16-18%, will be to
the tune of 10-15%. The financial model has been made flexible to adjust the debt-equity ratio and cost of
capital.
13.1.7. Tax and Depreciation
The assumptions for taxation structure are as follows:
Corporate Tax rate 33.99%
Minium Alternate Tax (MAT) rate 20.96%
Carry forward of losses
8 years
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