Setting up of Wholesale Cluster in

Bhubaneswar

“Inception Report”

Submitted to: BMC, Bhubaneswar

 Inception Report: Setting up of Wholesale Trader Cluster in Bhubaneswar

Table of Contents
I. Introduction ..................................................................................................................................... 3
(1) Project Rationale ..................................................................................................................... 3
(2) Objectives ............................................................................................................................... 3
II. Existing Wholesale Market ............................................................................................................. 4
(1) Infrastructure condition ........................................................................................................... 4
(2) Demand and Supply scenario.................................................................................................. 4
(3) Present Auction System .......................................................................................................... 7
III. Proposed Project Development Model ....................................................................................... 7
(1) Modern Market Facility .......................................................................................................... 7
(2) Master Plan ............................................................................................................................. 8
(3) Proposed Components of the model ....................................................................................... 9
(4) Project cost .............................................................................................................................. 9
(5) Layout Plan for temporary shifting of the traders ................................................................. 10
IV. Approach and Methodology for the Assignment ...................................................................... 11
V. Proposed Site: An Overview ......................................................................................................... 13
VI. Project Progress ........................................................................................................................ 13
VII. Project Implementation Schedule ............................................................................................. 14
VIII. Progress on Administrative and Statutory Clearances .............................................................. 14
IX. Future Strategy and way forward .............................................................................................. 14
X. Challenges ..................................................................................................................................... 15

Figure 1: Master Plan for 9.369 acres .................................................................................... 8

Figure 2: Layout plan over 2 acres for temporary shifting ............................................... 10

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 Inception Report: Setting up of Wholesale Trader Cluster in Bhubaneswar

I. Introduction
(1) Project Rationale
The department of General Administration (GA), Government of Odisha
established the market complex in Unit-1 in Bhubaneswar in 1962 to facilitate
wholesale trading for potatoes and vegetables. In 1984, the administration charge
of the market was handed over to Bhubaneswar Municipal Corporation (BMC). In
1992, BMC established godowns for potato wholesale traders at Kuberpuri near
Aiginia, an outskirt place in Bhubaneswar, with the objectives of:-
(a) avoiding the congestion in the market
(b) providing adequate storage facilities to the potato wholesale traders
(c) minimizing the truck movements inside the city
With the increase in demand from the growing population of Bhubaneswar
(8377371 in 2011), the trading volume got escalated over the years in the market.
This has resulted increase in the number of traders, both in wholesale and retail
space. This has led to a messy condition of the market leaving it as a disorderly and
dishevelled place.
Currently, there are about 2000 vegetable and fruit shops – some are permanent
shops, some are in the form of small compartments with polythene roof and wall
and some are in open space in narrow streets. The market being present inside the
city faces space constraint in terms of further expansion to accommodate the
growth in business volume. The place is also devoid of adequate parking, sanitation
and water facility.
In the current scenario, Bhubaneswar requires around 250-300 MT vegetables
daily. Handling such high volume requires
 Adequate space for wholesaling and retailing
 Adequate storage facility for any surplus commodities
 Traffic decongestion
In this backdrop, BMC has considered shifting of the wholesale market for
vegetable and fruit traders to a larger area in the outskirt of Bhubaneswar with
provisions for modern facilities. A land of area of 9.369 acres, adjacent to NH 5,
has been earmarked in Bhagawanpur mauza near Patraparain Bhubaneswar for the
purpose.

(2) Objectives
The main objectives of establishment of the new market are:-
(a) Providing a dedicated space for the wholesale trading activities for the
vegetable traders
(b) Relieving the market area of the daily traffic jams caused by transportation
and unloading of goods
(c) To facilitate smooth inbound and outbound logistics
(d) Provision for all modern facilities including primary processing such as
sorting and grading and storage facilities

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 Inception Report: Setting up of Wholesale Trader Cluster in Bhubaneswar

(e) Provision for adequate parking space, sanitation, water and power supply
_______________
1
http://www.census2011.co.in/census/city/270-bhubaneswar.html

II. Existing Wholesale Market

(1) Infrastructure condition
At present Unit-1 market in Bhubaneswar serves as both wholesale and retail
market. There are around 2000 wholesale and retail shops in the market, of both
categories of shops with permanent and temporary structures. The shops are
established in narrow streets, mostly with polythene roof and wall.
There is inappropriate facility and management system of garbage disposal at the
existing market. The market also does not have adequate sanitation, basic amenities
and drinking water facility.

More than 200 vehicles enter/exit the existing market place almost every day;
particularly in morning session traffic congestion in and around market place is a
regular phenomenon in absence of parking facilities; this parking problem at the
market place in turn spawns problem for the whole city.
There is no storage facility at the current market place; thus significant loss is
observed in unsold persihables. .

(2) Demand and Supply scenario

As per the discussions held with several traders of the market, the market is
basically a consumption market that serves to the population of Bhubaneswar and
nearby districts.
Majority of the vegetables and fruits coming to the market are procured from other
states and are sold to the retails traders from different parts of Bhubaneswar as well
as from adjacent districts and nearby places like Puri, Konark, Pipili, Jatani,
Baranga, Jagatsinghpur, Tata, Bhillai etc.
Vegetables and fruits are mainly procured from West Bengal, Jharkhand, Andhra
Pradesh, Madhya Pradesh, Himachal Pradesh, Delhi etc.

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 Inception Report: Setting up of Wholesale Trader Cluster in Bhubaneswar

Domestic production of Odisha contributes only minuscule to the overall trading

volume of the market mainly during the months of January-March
The table below provides the sourcing matrix for various vegetables in the market:-
Sl. No. Place/ State Agri Product
1 Bangalore Cauliflower, cabbage, capsicum, tomato,
beans
2 Nashik Carrot, tomato
3 Delhi Carrot, tomato
4 Raipur Capsicum, tomato, picado, mirchi, banana
flower
5 Andhra Pradesh Yam, plantain, pumpkin, michi
6 Kolkata Brinjal, spine gourd, pointed gourd, beans,
cucumber, ivy gourd
7 Ranchi Capsicum, tomato, picado, mirchi, banana
flower
8 Tamil Nadu Drum stick, pumpkin

The table below provides the sourcing matrix for various fruits in the market:-
Sl. No. Fruit Place/ State
1 Apple Delhi, Chandigarh, Simla, J&K
2 Grapes Chikbalapur (Karnataka), Solapur
3 Banana Rourpalam (AP), Bhusaval
4 Mango Andhra Pradesh, Karnataka (Chittor)
5 Papaya Andhra Pradesh, Raipur
6 Sapota West Bengal
7 Lichi Bhagalpur
8 Pomegranate Solapur, Nashik
9 Orange Punjab, Rajasthan, Nagpur
10 Pineapple Kerala

The existing market is basically consumption market where they mostly purchased
what they can sale within the same or next day.

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 Inception Report: Setting up of Wholesale Trader Cluster in Bhubaneswar

Demand and Supply scenario of major Vegetables

Name of Approx.Quantity Approx.Quantity *Sale *Stock *Stock
vegetables of purchse in of Sale in deviation for for Dry
MT/Day MT/Day (+/- Per Cold ware
Day) Storage house
in MT Storage
in MT
Potato 350 300 50 50 0
Onion 150 140 10 0 450
Green 300 250 50 50 0
Vegetables
(Cauliflowers,
lady finger,
beans,
brinjal, gourd
etc.)
Other 25 20 5 0 50
vegetable as
Garlic etc.
Total 825 795 30 100 500
* Data assumption is based on preliminary discussion with traders in the Unit-1
Market
*Currently the traders purchase what they can sale every day; provision of cold
storage is for storing the left over material for next day sale

* The dry warehouse is for storing of buffer stock for 3 days

Demand and Supply scenario of major Fruits

Name of Approx. Approx. *Sale *Stock for
vegetables Quantity of Quantity of Sale deviation Cold
purchase in in MT/Day (+/- Per Day) Storage in
MT/Day Average MT
Average
Apple 30 25 5 125
Orange 25 24 1 120
Grapes 25 24 1 120
Banana 70 65 5 0
Mango 60 58 2 0
Papaya 5 4 1 0
Sapota 4 3 1 0
Pomegranate 5 3 2 0
Pineapple 15 12 3 0
Other fruits 10 7 3 35
Total 259 233 26 400

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 Inception Report: Setting up of Wholesale Trader Cluster in Bhubaneswar

Demand and Supply scenario of major Fruits

Name of Approx. Approx. *Sale *Stock for
vegetables Quantity of Quantity of Sale deviation Cold
purchase in in MT/Day (+/- Per Day) Storage in
MT/Day Average MT
Average
* Data assumption is based on preliminary discussion with fruit traders in Ashok
Nagar Market
*5 Days of cycle is assumed for all the fruits to be put in cold storage this is as per
required business investment as discussed with the traders

During the preliminary discussion with the traders suggest that the market requires
approximately 500 MT of cold storage facility and similar quantum of dry
warehouse facility. However, the final capacity analysis with regard to products
and services can only be arrived after considering BMC guidelines on the no. of
traders and types of traders; after a thorough needs assessment and prioritization of
services. Capacity assessment of Waste Management System and other services
can also be arrived at after BMC guidelines and accessing detail requirement and
constraints analyzed in feasibility analysis.

(3) Present Auction System

The traders in unit-1 market purchase their material at the road side wherein
supplying trucks come from the other state. The base rate for a day is displayed at
a manually written board and is hanged at the road side. The price discovery takes
place through a bargaining process between the buyers and the sellers; however
generally it is the traders at the market who are at an advantageous condition in
price determination; the sellers from other states find it difficult to take back their
products to other markets because of additional transportation cost and the nature
of products being highly perishable.

III. Proposed Project Development Model

(1) Modern Market Facility
The prime objective of the proposed project is to provide the wholesale traders for
vegetables and fruits modern facilities to facilitate smoother operation and to ease
out the congestion problems of the existing market.

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(2) Master Plan

Figure 1: Master Plan for 9.369 acres

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 Inception Report: Setting up of Wholesale Trader Cluster in Bhubaneswar

(3) Proposed Components of the model

The proposed core components for the new market over an area of 9.369 acres
include:-
(a) Shops for around 52 traders – each shop of size 4x8 sqm
(b) Cold storage – 500 MT
(c) Dry warehouse – 500 MT
(d) Auction hall
(e) Cleaning, sorting and grading facility
(f) Waste Management System
(g) Automatic weighing system
The core facilities would be supplemented by support infrastructures like office
space, rest room, parking space, Bank extension counter cum ATM facility. The
proposed market will also entail sanitation, water and power supply facilities.
The wholesale market complex would provide one-stop solution in terms of
providing logistics support and storage facilities

(4) Project cost

The estimated cost for development of the proposed market includes the cost
towards basic infrastructure development, core facility and support facility
development and towards the equipment and machineries for these facilities.
Table 1: Estimated Project Cost

Sl. No. Particulars Amount (Rs. Lacs)

1 Basic Enabling Infrastructure 1,138.00
2 Core Facility 772.10
3 Support Facility 117.45
4 Equipment/ Machineries 27.30
5 Misc. Fixed Assets 4.00
Total Project Cost 2,058.85

The core facility development includes provision for cleaning, sorting and grading
facility, cold storage, warehouse, designated shops for the traders and auction hall.
Table 2: Core Facility Building Cost

Sl. No. Particulars Amount (Rs. Lacs)

1 Auction hall 30.00
2 Cleaning, sorting and grading 187.50
3 Cold storage (500 MT) 180.00
4 Warehouse (500 MT) 125.00
5 Shops 249.60
Total Building Cost 772.10

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Table 3: Core Facility Equipment cost

Sl. No. Particulars Amount (Rs. Lacs)

1 Automatic Weighing system 3.00
2 Sorting & Grading line (2MT/ hr) 15.00
3 Sorting and Grading table 1.80
4 Cold Storage 7.50
Total Equipment Cost 27.30

Note: The costs illustrated as above are the preliminary estimations only. Revision will
happen to the proposed project cost on the basis of the finalization of project
components and the related aspects. The same will be captured in DPR after
undertaking a detailed design of the finalized project components.

(5) Layout Plan for temporary shifting of the traders

To smoothen the trading operations at the existing market place, BMC proposes to
shift the beneficiaries to the new market location at an immediate effect basis by
providing temporary sheds over an area of around 2 acres. Figure 2 depicts the
layout plan for temporary relocation of the wholesale traders in the new market.

Figure 2: Layout plan over 2 acres for temporary shifting

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This includes provision for office space and parking space, apart from the provision for
temporary sheds, to facilitate a conducive trading environment to the beneficiaries during
this temporary arrangement period.

IV. Approach and Methodology for the Assignment

The action plan and way forward for the project consists of:-
• Assessment of raw material flow to understand commercial sustainability of the
market complex
• Gaining the confidence of the Stakeholders including the wholesale traders and
retail traders
• Assessment of existing infrastructure and requirement of infrastructure
development
Activities to be undertaken:-
(1) Defining the project components
(a) Assessment of existing infrastructure and requirement of infrastructure
development for implementation of the modern market facility
(2) Identification of stakeholders
(a) Identification of the wholesale traders to be relocated to the new market
place, the beneficiaries of the project, whose feedback and suggestions will
be critical for designing the project. Questionnaire based detailed survey
process will be adopted in this regard.
(3) Consultation with stakeholders
(a) To understand the social and political acceptability of the project
(b) To understand the existing status of fruit and vegetable trading, the associated
issues and perceived threats related the proposed market facility
(c) To identify the project components
(d) To disseminate relevant information about the concept as well as to increase
their ownership towards the project
(4) Field survey
(a) To undertake an assessment of the capacity requirement for the cold storage,
warehouse, waste treatment systems etc. that will aid in master plan
development
(b) Study on Cold chain technology such as temperature controlled facilities
used in other similar market facilities
(5) Site analysis
(a) To undertake topographical survey, geo-technical survey, soil testing, water
testing etc.

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(b) To carry out location and connectivity analysis which will involve road
network connectivity, proximity to the urban settlements etc.
(c) To study the availability and level of service of physical infrastructure in the
neighborhood of the site. These would include water supply, sewerage,
power, drainage, etc.
(d) To review previous studies and map planned and ongoing projects
surrounding the project site, if any, including civil infrastructure projects,
communication networks etc.
(6) Preparation of business plan and pre-feasibility report
(a) To work out the project economies/ financial models for the proposed project
through research on govt. policies and assistance, field study, and detailed
consultation with various stakeholders
(b) To explore options for leveraging of Investment
(c) To identify operating models for the proposed wholesale market like PPP,
O&M etc.
(7) Preparation of cost-benefit analysis
(a) To provide assistance to BMC in presenting a comprehensive cost-benefit
analysis to the traders to aid them in taking investment decision and in
participating in the proposed market
(b) To prepare a detailed financial analysis
(8) Assistance to BMC in designing the means of finance for the project with exploring
the options for dovetailing of funds form Central government schemes
(9) Preparation of detailed project report
(a) To undertake the assessment of the site analysis reports
(b) To carry out regulatory analysis
(c) To prepare the project concept and configuration recommendation
(d) To undertake the financial analysis related to cost and revenue estimation,
payback period, total surplus/deficit, DSCR, IRR, NPV
(e) To do the Master Planning, Infrastructure Planning and Architectural
Designing and estimating block costs
(f) To prepare working drawings, final drawings, cost estimation and
specifications
(10) Assistance to BMC for taking Statutory Approvals
(a) To assist BMC in applying and obtaining statutory approvals relevant for the
project
(11) Preparation of tender documents and selection of contractor

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(a) Proposing a detailed plan for developing and executing the procurement
process of the project
(b) Bid process management services for selection of contractors for undertaking
construction work at site and for selection of equipment suppliers
(12) Monitoring and Supervision
(13) Development of suitable Implementation model for the project along with
assistance to BMC for identification of suitable O&M agency

V. Proposed Site: An Overview

The proposed project site of 9.369 acres is located in Bhagawanpur mauza of Khurda
district near Patrapara area just adjacent to NH 5. The vicinity of the site to the national
highway will facilitate an easy movement of the trucks coming to the market.

Observations for land condition:-

 The land is almost leveled

 Soil condition seems good at prima facie level
 Currently heavy plantation is observed at the site

VI. Project Progress

For the ground level implementation of the proposed project, BMC has appointed IL&FS
Clusters as the PMC and the agreement has been executed between BMC and IL&FS
Clusters.

To roll out the devised action plan, IL&FS Clusters has undertaken the preliminary level
activities for the project.

 Interaction and meetings have been undertaken with different stakeholders such as
vegetable traders, fruit traders, and BMC officials
 The topo survey and geo-tech investigation has been completed
 The master planning has been completed for the entire area of 9.369 acres.
However, the finalization of the master planning is subject to the discussions with
BMC authorities and the beneficiaries.
 Master planning has also been done for an area of 2 acres in the allocated patch of
land to facilitate an immediate shifting of the beneficiaries to the proposed market

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VII. Project Implementation Schedule

Based on preliminary discussion and time frame, project implementation schedule has
been devised as below; however based on further study the final project implementation
schedule shall be produced in Detailed Project Report(DPR).

Project Implementation Schedule

Major Activity Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8
Report
Approvals and
Clearances
Capacity
Assessment and
master
Planning
Detail
engineering
design
Bid process
management
construction
Activities
Provision for
External
infrastructure
Project
completion
activities

VIII. Progress on Administrative and Statutory Clearances

The project may require following documents/ clearances:
 Land transfer
 Land conversion
 Approval from Horticulture Department for Cold Storage
 Labor License
 Fire prevention
 Insurance
 NOC Pollution
 Certificate of weight and measurement etc.

IX. Future Strategy and way forward

Based on current project status following are the strategic concerns and way forward
towards project development:
 Identification of the beneficiaries – the vegetable wholesale traders to be relocated
to the proposed market

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 Feasibility analysis on different aspects towards project development and

preparation of DPR
 Preparation of guidelines on project O & M structure and also role of different
stakeholders and detailing of project & future operational management aspect to
avoid fall out and minimize risk
 Establishment of vibrant communication and coordination between different
stakeholders from initial level of project development to implementation
 Finalization of means of finance for the development of the project

X. Challenges
(1) Project Component Prioritization – As per the preliminary discussions held with
the traders, different views have been received from the traders related to inclusion
of storage facilities and other modern amenities in the proposed market. Some
traders have preferred to stick to their traditional set up while some have preferred
to avail the modern facilities in the new market. Thus selection and prioritization
of project components would be a daunting task.

(2) Identification of the actual beneficiaries -Due to presence of a large number of

traders and more than one association for the traders, the selection of the actual
beneficiaries would be a challenging job. A systematic approach of listing and
selection on certain criteria like investment done in existing market, turnover,
average transaction quantity per day, variety of products dealt with etc would be
followed.

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Annexure1:
Stakeholder Analysis Framework
Stakeholders Reason for Positive(+) Negative(-) Course of action
(Both Primary & involvement interest in the interest in to increase his
Secondary) project the project involvement/Risk
Management
measures

High Influence/Power

Retail BMC & Traders

Traders

Sellers to Producer Farmers

this market in the village

Low Influence & Low Power High Interest

Note: The above Influence and Interest Grid is just an example which can be derived only after
analysis.

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Annexure2:
Questionnaire for Wholesale Trader

1. Name:

2. Father’s Name:

3. Address:

4. Contact details:

5. Age:

6. Shop No. _______________ Shop Size (ft x ft) ______________________

7. Family members/ other partners involved in business ___________________________

8. Month/ year of opening the shop in Unit – 1 Market ____________________________

9. Approx. investment in the business Rs.Lakhs___________________________________

10. Future investment plan in the business in Rs. Lakhs and time frame_________________

11. Business details:-

S.No Name of Avg Place of Purchase Avg. Category of Location Selling

the Purchase/ purchase price/ Sale /day Buyer as of the price
Vegetables day of Quintal (Quintal) retail/small buyer per/
being sold (Quintal) respective (in Rs.) vendor/sub- Quintal
vegetable stockist ( in
Rs.)

1. Describe the facilities/advantage of the existing location

_______________________________________________________

12. Describe the problems/disadvantage of the existing place of business i.e Unit-1/Ashok Nagar

market_______________________________________________________

13. Willingness to relocate to new market: □ Yes □ No

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Specify the reason _______________________________________________________

14. Shop Size requirement based on the business volume ___________________________

15. Services Required at the Hub:- (Pl. put 4 √ in most priority,3 √ in second most priority,2 √ in

third most priority and 1 √ in other required services)

□ Storage and Cold Storage facility

□ Temperature controlled warehouse

□ Auction platform & Price display system

□ Ripening Chamber

□ Sorting, grading, washing and packing lines

□ Material handling equipment (plastic crates etc.)

□ Movement and parking facility for vehicles

□ Transport services

□ Banking services

□ Waste treatment and disposal systems

□ Bulk Weighing facility

□ Drinking water, toilets

□ Business Information desk

□ Emergency services, police/ general security and fire fighting

16. Capacity of facility (Cold Storage, Dry ware house, ripening chamber etc. ) to be utilized for and

for how many days ________________________________

17. Are you willingness to purchase from collection centres? Yes/No ------

Specify the reason_________________________________

Name and signature of surveyor:

Date:

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