JNPT Final Volume2v2

PORTS AND SHIPPING
JNPT Business Plan -

Final Report
Volume 2
ADVISORY
© 2006 KPMG Advisory Services Private Limited, an Indian private limited company and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.
1
Table of Contents
Section Page Section Page

Topic Topic
No. No. No. No.
Volume II of report 14 Detailed action plan (projects) 211
8 Client related projects 3 14.0 Overview of action plan 212
9 Public related projects 76 14.1 Infrastructure creation plan 219
10 Organizational improvements 127 14.2 Process improvement plan 260
11 Phased land use plan 140 14.3 Organizational improvement plan 266
12 Plan of action 149 Annexure 1 269
1.1 Impact of VAT 270

12.1 Plan of action to implement strategy 150
1.2 Liquid Cargo Opportunity 271
13 Financial aspects of business plan 158
1.3 Traffic at JNPT 290
13.0 Introduction to financial aspects 159
1.4 Pipeline and Tankages at JNPT 294
13.1 Sources of finance 164
1.5 Environmental Impact Assessment 295
13.2 Overview of investments 179
Benchmarking with international
1.6 297
13.3 P&L Analysis 188 players
13.4 Cash flow Analysis 200 1.7 Rail-Road Split 298
13.5 Balance sheet analysis 205 1.8 CFS and empties on port land 299
Annexure 2 (Financial statements) 300

13.6 Ratio analysis 107
Annexure 3 (List of abbreviations) 310
13.7 Well defined key figures 210
2
Chapter 8
Client related projects
3
8.1 Client Related Investment Projects
8.1.1 GTI to become fully operational
Summary Coverage
Project to be undertaken GTI terminal to become fully operational
Year of Completion 2006-07 (GTI has started initial operations)
Capacity of the project 1.3 Mn TEUs
Total Traffic handled at JNPT after 3.22 Mn TEUs by 2006-07

completion
Traffic handling capacity at JNPT in the 2.7 Mn TEUs

previous year
Need for the project JNPT would face capacity shortfall in areas of RMQC, wharf to yard and
gate capacity by 2006-07 due to increase in traffic. GTI which is currently
ramping up its operations should be scaled up to full capacity in 2006-07.
However while capacity is available at GTI it would take 2-3 years for
traffic to match GTIs full capability of 1.3 Mn TEUs.
Technical Description The project would involve GTI adding capacity to JNPT through its new
terminal by adding 8 RMQCs, 4 Reach Stackers, 29 RTGCs, 150 Tractor
Trailers, 270,000 SQM of yard area and 7-8 gates.
Key enablers for the project The successful execution of the project would require development of
processes within JNPT to handle the increasing complexity related to
sharing resources (such as mixed train handling) which would arise due
to addition of a terminal operator. GTI would also need to ramp up its
capabilities to match performance standards of other terminals at JNPT.
4
8.1.2 Development of 32 Hectares of land for CFS
Summary Coverage
Project to be undertaken Development of 32 Hectares of CFS Land
Year of completion 2007-08
Total Traffic handled at JNPT after 3.7 Mn TEUs by JNPT by 2007-08
completion
Need for the project There is a need for developing CFS as the increase in traffic would
require an additional 10-20 Hectares of CFS area by 2007-08. Currently a
number of CFS have made plans to develop facilities outside the port
area. Although the current plans submitted to the customs department (14
new CFSs with additional 114 Hectares of CFS space) is enough to meet
future requirements of JNPT till 2010-11, there is a risk of some of these
CFS not being able to acquire land and hence develop CFS operations.
This is because the availability of land around the port is becoming a
constraint in light of upcoming SEZs. Also the proposed CFSs are at a
distance of over 5-10 Kms from the port creating delays in transfer.
Hence it is proposed that out of the additional CFS capacity required till
2010 40% should be developed within the port boundaries.
Technical Description In the latter years as availability of land outside the port further reduces it
is proposed that 70% of the additional CFS requirements should be
developed within the port land.
The area earmarked for the CFS operation is shown in Exhibit 8.1.1.
This area is connected to SH54 and would be able to handle the increase
in traffic in light of 4 laning of SH54 which would be completed in 2007-08
(also identified as a project)
JNPT would develop the land (including roads) and lease it to CFS
operator who would develop and operate the facility. Revenues for JNPT
would comprise primarily of lease rentals obtained from the operators.
5
8.1.2 Development of 32 Hectares of land for CFS
Summary Coverage
Cost of Development for JNPT The cost of development for the land is expected to be around Rs. 114.2
Crore on the basis of a development cost of Rs. 3.3 Crore per hectare
(CIDCO report on reserve pricing of land). This includes the cost of
utilities, leveling, road development etc
Revenues for JNPT Revenues expected by JNPT would be around Rs. 48 lakhs /hectare/year
(based on Rs 40/sq metre /month which is recommended rate by CIDCO,
at a rate lower than this JNPT will be making losses on construction) The
total revenues expected from the 32 hectares of land would be Rs. 16
Crores in 2007-8
Cost of development for CFS Operator The cost of development for the land is expected to be around Rs. 98
Crore on a basis of Rs. 3.06 Crore per hectare (Secondary research on
CFS costs). This includes the cost of equipment, building, contingency
etc.
Revenue for CFS Operator Revenues expected by operator would be around Rs. 1
Crores/hectare/year (Secondary research on CFS costs) The total
revenues expected from the 32 hectares of land would be Rs. 32 Crores
Key enablers for the project The successful execution of the project would require effective road
connectivity between the port and the CFS area. In absence of such road
developments, the CFS infrastructure may lead to congestion. Hence, the
review of CFS development should be done periodically to ensure that it
is line with connectivity at the port and is not causing congestion
32 ha represents requirements of CFS for a three year period between 2007-08 to 2010-11. Keeping in mind that
the action on the plan is likely to begin only after April 2007, the CFS creation at any point of time during this 3
year period may suffice.
6
Exhibit 8.1.1 : 32 Hectares of CFS land development
32 Hectares of CFS
land (2007-08)
Road
Developments
7
8.1.3 330m Extension of current berth
Project – 330m Expansion of existing berth towards NSICT

Year of completion – 2008-09
General Description and motivation
Traffic projections indicate that the traffic expected at JNPT in 2008-09 is 4.43 Mn TEUs. The current capacity assessment
suggests that the capacity of all the existing terminals together, including GTI, would be 3.9 Mn TEUs in 2008-09 and
hence additional capacity would be required. Additional capacity can be provided by extending the current berth.
JNPT has recently conducted a feasibility report for the 330m extension wherein options for standalone and sharing of
berth was considered. A standalone berth would require rail ICD for which there is a limitation of space at JNPT at the
same time a standalone berth may not be able to accommodate larger vessels that may visit JNPT in the future (post
dredging).
One of the option as part of the feasibility report (as prepared by UTI) is to divide the 330m between JNPCT and NSICT. It
was found that the 330m berth would be developed by NSICT and the entire quay length would be shared between JNPT
and NSICT (805m).
The analysis carried out is from the perspective of the project alone.
Technical Description
It is expected that the berth would be divided between the two operators and each operator would get 165m long and 57.5
m wide extension. It is proposed to have two approach roads 16m wide and 290 m in length. Apart from this the current
NSICT bridge may also need to be expanded to meet the berth approach requirement.
The extension would allow each operator to increase number of RMQCs deployed by two. These RMQCs would be
equipped with twin move capabilities.
Apart from this the container stacking yard would be divided between the two operators and would have a total of 12
RTGCs and 2 Reach Stackers. Each operator would add 80 Tractor Trailers to move cargo between yard to wharf and
back.
The berth would require 27 Hectares of backup area which is proposed to be developed through reclamation. This backup
area would include the export and import yard for the extended berth. Each operator would undertake the development of
165m of berth and backup area. A summary of Environmental Impact Assessment findings for the project is provided in
Annexure 1.5
8
330 M Expansion
Approach Roads
Reclaimed Backup
Area of 27 ha for
Container yard
operations
Exhibit 8.1.2 : 330 m extension of current berth
9
Forecast of additional traffic Exhibit 8.1.3 Traffic potential for overall 330m
As the extension would become operational at a time expansion
where demand already exceeds supply of port Year Mn TEUs
infrastructure, it is expected that the berth would reach its
full capacity within a period of three years. Additional 2008-09 0.58
traffic that would be serviced through the 330m as a result
2009-10 0.73
of the expansion is given in Exhibit 8.1.3 and it becomes
stable after 2010-11. 2010-11 0.78
Calculation of Investments 2011-12 0.78
The Investments envisaged for 330 m of berth are shown 2012-13 0.78
in Exhibit 8.1.4. These investments have been calculated
on the basis of discussions with the port as well as 2013-14 0.78
through secondary research.
2014-15 0.78
Apart from this the port would also need to develop CFS
2015-16 0.78
and other supporting infrastructure (hinterland etc) for the
expansion. These projects have been identified separately 2016-17 0.78
and should be completed in time to ensure smooth
operations of the 330 m expansion berth. 2017-18 0.78
Calculation of revenues 2018-19 0.78
It has been assumed that the berthing charges accrue to 2019-20 0.78
JNPT and the terminal operators revenue source is limited
2020-21 0.78
to cargo handling operations
Currently the revenues from cargo handling are around Rs 2021-22 0.78
2650 per TEU. Based on recent trends the revenue per 2026-27 0.78
TEU is expected to be constant till 2013-14 beyond which
it is assumed to increase by a marginal 2.0% per annum. 2031-32 0.78
The marginal growth of revenue/TEU has been taken in 2036-37 0.78
light of the recent competitive pressures and in
discussions with the finance department at JNPT. 2037-38 0.78
2038-39 0.78
10
Calculation of Additional Costs Exhibit 8.1.4 Initial Investment outlay for 330 m of
Operating costs have been assumed to be 30% of the berth
revenues in the initial year. Subsequently these costs
Investments In Rs Mn
have been increased by the rate of inflation (4%) every
year.
Berth Construction 930.24
The equipment has been replaced after 18 years of
operation. The replaced equipment has been depreciated
so that residual value at the end of BOT period is Zero. RMQC (51 m reach QC’s) 1,427.71
The rate of inflation for all costs has been taken as 4%.
TTs 499.70
Infrastructure projects are eligible for a tax holiday for the
initial 10 years of their operation under the tax clause 80I.
This clause however would expire in 2010. As the 330 m Reach Stackers 24.88
berth begins operations before 2010 it has been given tax
benefits. The tax rate has been taken at 33.66%. RTGC 1,063.00
Approach road 192.87
NSICT Bridge Expansion 102.46
Reclamation Costs 1,067.44
Total 5,308.30
11
Financial Coverage Exhibit 8.1.5 Project NPV and IRR without revenue
The project is proposed to be financed through equity sharing
and debt with a debt: equity ratio of 1:1.
Project NPV
4,697,802,948 @ 12.95%
The WACC has been arrived at using the Zero Coupon (Rs)
Yield Curve. The cost of debt for the project is estimated
to be 9.70% (assuming 100 basis points above the rate IRR 24.263%
of return). Payback Period
6.5
The cost of equity for the project is expected to be (in years)
around 16.20%, this has been arrived at using the
market return rate, beta for infrastructure index and the
risk free rate of return.
NPV and IRR
The project shows a positive NPV and IRR indicating
positive returns for investors in such a project. Exhibit
8.1.5 shows the result of the NPV and IRR calculations.
The NPV IRR calculation have been assumed at a
WACC of 12.95% assuming a Debt to Equity ratio 1:1.
This is in line with TAMP guidelines which indicate a
Debt equity structure of 1:1.
As can be seen the project is profitable and has a
positive NPV as well as a high IRR.
Implementation Schedule
The implementation schedule of the project is 18 months
and is to be completed by 2008-09. This indicates that
the project should be started in 2007 1st quarter to meet
the capacity requirements of the future
12
Summary Cash Flow (In Rs Mn) Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Revenue (A) - - 1,533 1,927 2,058 2,105 2,164 2,382 2,285 2,349 2,414
Operating Expenses (B) - - 460 578 617 642 668 694 722 751 781
Depreciation (D)
- - 238 238 238 238 238 238 238 238 238
Tax @ 33.66% of Earnings* (E) - - - - - - - - - - -
Fixed Assets (F) 5,308 - - - - - - - - - -
Net Cash flow (A-B-F-E + D) (5,308) - 1,311 1,587 1,679 1,701 1,734 1,926 1,801 1,836 1,871
Summary Cash Flow (In Rs Mn) Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20
Revenue (A) 2,481 2,550 2,621 2,694 2,769 2,846 2,925 3,006 3,090 3,178
Operating Expenses (B) 812 845 879 914 950 988 1,028 1,069 1,112 1,156
Depreciation (D) 238 238 238 238 238 238 238 238 238 634
Tax @ 33.66% of earnings * (E) - 517 537 556 574 592 609 626 643 352
Fixed Assets (F) - - - - - - - - 5,958 -
Net Cash flow (A-B-F-E + D) 1,907 1,426 1,444 1,463 1,483 1,504 1,526 1,549 (4,385) 2,304
Summary Cash Flow (In Rs Mn) Year 21 Year 22 Year 23 Year 24 Year 25 Year 26 Year 27 Year 28 Year 29 Year 30
Revenue (A) 3,242 3,307 3,373 3,440 3,509 3,579 3,651 3,724 3,798 3,874
Operating Expenses (B) 1,203 1,251 1,301 1,353 1,407 1,463 1,522 1,582 1,646 1,712
Depreciation (D) 634 634 634 634 634 634 634 634 634 634
Tax @ 33.66% of earnings * (E) 407 454 495 530 560 587 610 630 647 662
Fixed Assets (F) - - - - - - - - - -
Net Cash flow (A-B-F-E + D) 2,267 2,236 2,212 2,192 2,176 2,164 2,154 2,146 2,140 2,135
* Tax is calculated on earnings post adjustment for depreciation. Depreciation taken for tax is the tax value of depreciation as per
Indian tax laws.
13
Sensitivity Analysis
Exhibit 8.1.6 Project NPV and IRR with decrease in
To assess the profitability of a project a sensitivity traffic
analysis should be carried out. The sensitivity analysis
provides insights on effect of changes in the Project NPV
environment on the profitability of projects. An 3,062,240,841 @ 12.95%
(Rs)
additional scenario has been considered by KPMG to
assess the profitability of project. This is as follows:
IRR 20.639%
z Decrease in traffic by 20%/Tariff reduction by
20%: This scenario assumes a 20% lower traffic Payback Period
8.0
potential/ lower tariff and indicates the feasibility (in years)
of the project under such a situation.
Scenario 1: Decrease in traffic by 20%/ Tariff
reduction by 20%
This scenario assesses the profitability of the project
under a reduced traffic/tariff assumption. The traffic
has been reduced by 20% to arrive at NPV and IRR.
As can be seen in Exhibit 8.1.6 the NPV and IRR of
the project is expected to be positive even under the
reduced revenue assumption.
All other assumptions on costs and revenues are the
same as that of the base case.
14
Scenario 1: Decrease in traffic by 20%
Summery Cash Flow (In Rs Mn) Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Revenue (A) - - 1,226 1,542 1,646 1,684 1,731 1,906 1,828 1,879 1,931
Operating Expenses (B) - - 368 462 494 514 534 556 578 601 625
Depreciation (D)
- - 238 238 238 238 238 238 238 238 238
Tax @ 33.66% of Earnings* (E) - - - - - - - - - - -
Fixed Assets (F) 5,308 - - - - - - - - - -
Net Cash flow (A-B-F-E + D) (5,308) - 1,097 1,317 1,391 1,409 1,435 1,589 1,489 1,516 1,545
Summery Cash Flow (In Rs Mn) Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20
Revenue (A) 1,985 2,040 2,097 2,155 2,215 2,277 2,340 2,405 2,472 2,543
Operating Expenses (B) 650 676 703 731 760 791 822 855 889 925
Depreciation (D) 238 238 238 238 238 238 238 238 238 634
Tax @ 33.66% of Earnings* (E) - 402 419 436 452 467 482 496 510 216
Fixed Assets (F) - - - - - - - - 5,958 -
Net Cash flow (A-B-F-E + D) 1,573 1,200 1,213 1,226 1,241 1,257 1,274 1,292 (4,647) 2,036
Revenue (A) 2,593 2,645 2,698 2,752 2,807 2,863 2,921 2,979 3,039 3,099
Operating Expenses (B) 962 1,001 1,041 1,082 1,125 1,170 1,217 1,266 1,317 1,369
Depreciation (D) 634 634 634 634 634 634 634 634 634 634
Tax @ 33.66% of Earnings* (E) 270 316 355 389 419 444 466 485 502 516
Fixed Assets (F) - - - - - - - - - -
Indian tax laws.
15
8.1.4 Development of 50 Hectares of land for empty depot operations
Summary Coverage
Project to be undertaken Development of 50 Hectares of land for empty depot operations
Year 2008-09
Traffic to be handled at JNPT 4.42 Mn TEUs by JNPT
Need for the project There is a substantial amount of empties traffic at JN Port (around
17.89% of stuffed containers). Apart from this empties are also produced
due to destuffing operations of import cargo at the CFS (around 75% of
import cargo at the CFS is destuffed at the CFS). The current location of
empty yards is shown in Exhibit 8.1.7. The total area for empties available
at these yards is around 74.4 Hectares (data obtained from Port planning
and development department at JNPT).
As the traffic increases this area would prove to be inadequate and will
have to be increased. The availability of land near the port is limited due
to development of SEZs etc. Hence, it is proposed that the port develops
empties yards within the port land. The expected requirement for empties
between 2008-09 and 2012-13 of around 50 Hectares.
Technical Description The generation of empties is shown in Exhibit 8.1.8. The project
envisages development of empties yard within the port. The empties yard
is located close to the CFS developed inside the port to minimize
movement of empties within the port. The additional traffic generated due
to the empties yard can be handled due to the improved efficiency of
SH54 and other projects such as grade separators which are to be
completed by 2008-09.
The location of the proposed empties yard is shown in Exhibit 8.1.9.
16
YAN
AL
K
TO
KALAMBOLI - Yards at SH-54
JUNCTION - Yards at NH-4B
- Yards at Gavhan Phata-
3 Chirner
MUMBAI
-Yards at Koproli-Khopta Rd.
PANVEL - Yards at NH-17
GavanMJP
Tank
PALASPE
10 12
1
6 0 11 1
9
4
N
5 2
H
3
-4
J.N.P.T. 2
1
1 CHRLE
54
8 2
- 7 3
SH
DIGHODA
5 4
-17
NH - 4B 6 TO
1 5 PO
NH
3 4 RANSAI DAM ON
2 A
4 KHOPTA-KOPROLI ROAD
1 CONNECTING NH - 17
Khopta Bridge
2 CHIRNER
5 1 1. Gavan Phata – ChirnerRoad.
KOPROLI 2. Koproli – Vasheni Sai Road.
3. Gavan Phata – PanvelRoad.
4. Dastan Phata – Dighoda Road.
2 SAI TO GOA 5. Karal Junction – UranRoad.
VASHENI
Exhibit 8.1.7: Layout plan showing roads leading to port & Empty container yards
17
Exhibit 8.1.8: Generation of empties
Destuffed Empties
Empties Yards
Empties for stuffing

Stuffing of Exports Destuffing of Imports To importer
Exports by Road 30% of total exports

CFS
57% of total imports
Direct to importer Imports by Road
Direct to port
Exports by Rail
JNPT
Imports by Rail
It is expected that the exports proportion and Empties

imports proportion would change as the road/rail
proportion changes. This has been incorporated (about 17.89% of
in the projections stuffed containers)
18
Summary Coverage
Cost of Development for JNPT The cost of development for the land is expected to be around Rs 185
Crores in 2008-09 on a basis of Rs 3.3 Crores per hectare (CIDCO report
on reserve pricing in 2005-06). This includes the cost of utilities, leveling
and road development etc
Revenues for JNPT Revenues expected by JNPT would be around Rs. 0.50
Crores/hectare/year (based on CIDCO report on reserve pricing for
JNPT). The total revenues expected from the 50 hectares of land would
be Rs. 25 Crores in 2008-09
Cost of development for empty depot The cost of development for the land is expected to be around Rs. 50
Operator Crore on a basis of Rs. 1 crore per hectare (Secondary research on
empty depot costs. Empty depot operators have lesser investment
requirements). This includes the cost of equipment, building, contingency
etc.
Revenue for empty depot Operator Revenues expected by operator would be around Rs. 0.67
Crores/hectare/year (Secondary research on empty operator costs) The
total revenues expected from the 50 hectares of land would be Rs. 33
Crores
land and connectivity to the empty depot area and ensuring optimal
utilisation of space in the yard. In absence of such connectivity, the empty
container yards development may lead to congestion. Hence, the review
of empty container yard development should be done periodically to
ensure that it is line with connectivity at the port and is not causing
congestion.
50 ha represents requirements of empty yards for a three year period between 2008-09 to 2011-12. Keeping in
mind that the action on the plan is likely to begin only after April 2007, the empty yard creation at any point of time
during this three year period may suffice.
19
Exhibit 8.1.9 : 50 Hectares of empty depot land development
50 Hectares of
Empties yard (2008-
09)
Road
Developments
20
8.1.5 Port Based Logistics and FTZ
Year of Completion: 2009-10

JNPT has over 1200 ha of developable land of which 670 ha have been proposed for port developmental activities.
A port based logistics and free trade zone could act as an attractive source of lease income for JNPT and create
additional traffic for the port.
A port based FTZ/logistics zone will allow for JNPT to provide end-to-end facilities for export based industries
including manufacturing, warehousing, assembly, packaging and finally shipment. The zone would be able to
capitalize on the proximity to major consumption centers like Mumbai and could serve as distribution hub for states
such as Maharashtra and Goa.
The stability of revenues earned from this zone would be based on the industrial production of Maharashtra as well
as port based logistics industries both of which are showing high growth.
JNPT has 4 zones (1,2,5 and 7) available for port operational activities. A contiguous area of 200 hectares could be
made available in zone 2 for the logistics/free trade zone. The zone would have 3 broad areas –
• Value added services/manufacturing zone for export based industries of 50 ha
• Logistics zone (packaging and assembly, sorting and invoicing) of 100 ha
• Storage and Distribution area (container handling, stuffing/destuffing services) of 50 ha
JNPT would invest to develop the land in the area for activities as well as set up utility services such as power and
water. This could then be leased out to various industries for manufacturing/logistic/storage activities for a period
ranging from 0-30 years The lessees will invest in construction and development of their area for carrying out
various logistic activities.
This zone could potentially be used as an additional container freight handling zone given the proximity to the port
as well as non-availability of space in the vicinity of the port.
As development work for the land would take time, this project has been envisaged for 2009-10. It will be in 3
phases with each phase coming on board in a given year. After 3 phases coming on board, it will be fully
operational by 202-13.
21
Exhibit 8.1.10 : Proposed Port based Logistics/FTZ
Proposed
Evacuation Roads
Logistics/Free Trade Zone

– 200 hectares
22
Forecast of additional traffic Exhibit 8.1.11 : Land development cost per

This zone is primarily an attempt to generate captive hectare for JNPT
traffic for JNPT. Units in the area could serve as points Total Development cost per Rs 33 million
of origination for port-bound containers. The estimate of hectare
container traffic depends on the exact composition and
size of industries. It can potentially be between 10,000- Source : CIDCO Land report
20000 TEUs per annum on completion of development.
The revenue accruing to the port from potential increase
in traffic has not been taken into account while
considering the revenues and returns.
Investment details
There are 2 sets of investments involved for creation of
the zone. These are investments made by JNPT to
develop the land as well as investments made by the
lessee to carry out operational activities at the zone. Exhibit 8.1.12 : Construction cost per hectare for
Exhibit 8.1.11 lists approximate current costs of Lessee
investment per hectare required to be made by JNPT to
Industrial building per Rs 83.85 million
develop the land. Exhibit 8.1.12 indicates approximate
hectare
current costs of investment per hectare to develop
industrial and storage facilities. Storage and distribution Rs 83.85 million
land per hectare
Cost of construction for the lessee for 200 hectares of
land works out to Rs 1700 cr in 2008-09 (phased over 3
Source: KPMG research, Industry averages
years) Costs of development of same area of land for
JNPT before leasing out work out to Rs 722 cr in 2007-
08 (phased over 3 years) JNPT would need to develop
the land a year before leasing it.
23
Calculation of revenue
Exhibit 8.1.13 : Annual revenues (in millions)
Revenues for the lessee are calculated on the
basis of revenue per hectare of land. The Year Lessee JNPT Year Lessee JNPT
revenue per hectare of land is taken as Rs 24.95 1 0 0 16 9192 1417
million per hectare annually based on industry
research. 2 2198 437 17 9560 1445
Revenues for JNPT are taken on the basis of 3 3935 774 18 9942 1474
lease rentals of Rs 4.8 million per hectare of land 4 5741 1117 19 10340 1504
as arrived at in the CIDCO report on JNPT land
price fixation. The lease revenues have been 5 5971 1140 20 10754 1534
worked out for a period of 30 years.
6 6210 1162 21 11184 1564
It is assumed that it will take JNPT as well as the
7 6458 1186 22 11631 1596
BOT developer a year each to develop and
construct on the land respectively. 8 6717 1209 23 12096 1628
9 6985 1233 24 12580 1660

Calculation of additional cost 10 7265 1258 25 13083 1693
Additional costs for the lessee are essentially 11 7555 1283 26 13607 1727
lease rentals paid out to JNPT of 4.80 million per
hectare of land. In addition to that a utility cost of 12 7857 1309 27 14151 1762
10% of lease rentals has been estimated. 13 8172 1335 28 14717 1797
2% has been taken as this is the rate at which 14 8499 1362 29 15306 1833
leasing rentals are expected to be escalated in
JNPT contracts. The tax rate has been taken at 15 9151 1414 30 15918 1870
33.66%. Source: CIDCO report, KPMG analysis
Source : KPMG research
24
Financial Coverage
For the given project financial coverage is obtained by calculating as well as making suitable assumptions about the
developer’s capital structure.
The debt-equity structure of the lessee s taken as 1:1 in line with TAMP guidelines.
The lessee cost of debt is estimated by assigning a spread over the zero coupon yield curve for Government bonds as
well as taking into account a repayment period.
Here we assume the repayment period as 10 years and taking the ZCYC curve for 2008 and 2013 as of 11th July 2006
we arrive at the cost of debt for a loan taken in 2009-10. Here the cost of debt arrived at 9.79% on taking a risk spread
of 100 bps over the risk free rate of debt.
Using an equity Beta of 1 we arrive at the contractor’s cost of equity. One is the average infrastructure index Beta
between July 2002 and July 2005 in Indian equity markets. Indian market returns over risk free rate have been 6.5%
historically. Using these assumptions the cost of equity is calculated as 16.29%
Cost of capital arrived at for the project is 13.04% for a D/E ratio of 1.
For JNPT the investments are assumed from port internal resources at an opportunity cost of 9% annually.
Phasing of EPZ
After construction of JNPT financial statements and analysis of cash flows it was observed that the investments in the
FTZ are not sustainable in a single year hence they have been phased out over 3 years of 2008-09 till 2010-11.
Simultaneously the revenue stream to the port from leasing begins a year post investment in a given phase,
beginning from 2008-09. EPZ becomes fully operational in the year 2012-13. This phasing is evident in the financial
model and in the description of the project.
25
IRR/NPV of the project for the Lessee Exhibit 8.1.14 : NPV and IRR for the lessee
positive returns for investors in such a project, as seen in Net present value Rs 13, 681 million
exhibit 8.1.14.
The net present value of the project has been calculated Internal rate of return 23.19%
at a WACC of 13.04% assuming a Debt to Equity ratio 1:1.
This is in line with TAMP guidelines which indicate a Debt Payback Period (in years) 9.3 years
equity structure of 1:1.
The IRR could be substantially higher depending on the
exact nature of the industry activity carried out in the
leased land.
Exhibit 8.1.15 : NPV and IRR for JNPT
IRR/NPV of the project for JNPT

Net present value Rs 3,481 million
As far as JNPT is concerned, the project could be an way
of earning regular rentals from a one time investment. Internal rate of return 14.50%
The IRR of 14.50% could be higher except that leasable Payback Period (in years) 12.1 years
land at JNPT requires substantial development cost. This
is because of reclamation costs arising from marshy
nature of land. It is important to note that NPV/IRR
calculations do not include revenues from cargo handling
due to additional TEUs generated.
26
8.1.6 Development of the first phase of 4th Terminal
Project – 1) Development of the first phase of 4th Terminal*
2) Development of Rail ICD for the fourth terminal
3) Development of road for the fourth terminal
4) Relocation of BPCL Jetty
JNPT would start experiencing shortage of container handling capacity by 2010-11, when traffic expected is 5.92 Mn
TEUs as compared to capacity of 5.59 Mn TEUs. In the years upto 2014-15, this shortfall could increase up to 2.7m
TEUs. As a result, there exists a case to develop a 4th container terminal.
The 4th Terminal is proposed to be setup to overcome the shortfall perceived in 2010-11 and to handle the increase
expected in subsequent years. It is proposed that the terminal would have a quay length of 1000 m and would be
setup at the location of the BPCL Jetty. The current BPCL jetty (300m) would be extended by 700 m. The developer
will extend the current BPCL jetty and relocate BPCL to a new marine terminal. The cost of relocation will be borne
by the developer.
Along with the fourth terminal the developer would also develop the rail ICD for the terminal as well as the road
leading from the port approach road to the terminal. Maps are shown in exhibit 8.1.16,8.1.17 and 8.1.18.
The berth is proposed to be 1000m long. The berth would extend the current BPCL jetty (300m) by 700m and
expand the existing BPCL jetty for container operations. Apart from this the developer would also bear the cost of
relocating BPCL to the new marine terminal. It is proposed that the developer would reclaim around 200 Ha of land
for cargo related operations
The developer would utilize only part of the reclaimed land for its operations while the remaining would be used by
the second phase of the 4th terminal.
The equipment details proposed for the terminal are given in exhibit 8.1.20. The facility is proposed to be equipped
with 12 RMQCs, 43 RTGCs, 6 Reach Stackers and 250 TTs.
The RMQCs would be capable of double moves. Once the fourth terminal becomes operational the port will be able
to maintain double moves proportion at 10% which would further add capacity to the port.
A summary of Environmental Impact Assessment findings for the project is provided in Annexure 1.5.
* As part of the Interim report a number of options for development of 4th terminal were considered. Post discussions
with the port, the option described herein has been used for the financial model
27
Exhibit 8.1.16 : Existing state of JNPT's sea side
28
Exhibit 8.1.17 Planned fourth terminal
4th Terminal,
created by shifting
BPCL shifted to the new BPCL and
Marine Terminal extending the Jetty
200 Ha of
reclaimed land for
use as yard
Reclaimed
JNP ( Next Phase)

29
4th Terminal, Exhibit 8.1.18 Fourth terminal and supporting
created by shifting infrastructure
BPCL shifted to the new BPCL and
Marine Terminal extending the Jetty
4 Laning of SH54
Reclaimed area
to be used as
Container yard
Addition of rail ICD
Road Leading to
the fourth terminal
30
Forecast of additional traffic Exhibit 8.1.19 Traffic Potential - 4th Terminal Phase 1
Traffic forecast for the 1000m berth has been given Year Mn TEUs
alongside. The traffic expected for the fourth terminal is
0.04 Mn TEU going upto 2.4 Mn TEU in the 4th year of 2010-11 0.04
operations as seen in exhibit 8.1.20. 2011-12 0.86
2012-13 1.81
Calculation of Investments
2013-14 2.31
The Investments envisaged for the project are shown in
2014-15 2.4
Exhibit 8.1.21. These investments have been calculated
on the basis of discussions with the port as well as 2015-16 2.4
through secondary research. These include costs for
strengthening of BPCL jetty to support container ships 2016-17 2.4
as well as cranes. 2017-18 2.4
Apart from this the port would also need to develop CFS 2018-19 2.4
and other supporting infrastructure (hinterland etc) for
the expansion. These projects have been identified 2019-20 2.4
separately and should be completed in time to ensure
2020-21 2.4
smooth operations of the terminal.
2021-22 2.4
Calculation of Revenues 2026-27 2.4
JNPT had already commissioned a detailed feasibility 2031-32 2.4

for 4th container terminal via Consulting Engineering 2036-37 2.4
Services Ltd.
2037-38 2.4
Revenues for cargo handling are taken as around Rs
2650 per TEU and then increased by 3% every year. 2038-39 2.4
2039-40 2.4
2040-41 2.4
31
Calculation of Additional Costs Exhibit 8.1.20 Initial investment & Expenditure - 4th
Terminal Phase1 (in rupees Mn)
Operating costs have been assumed as a
percentage of capital costs. Subsequently these Container Berth (700m X 57.5m) 1,969.64
costs have been increased by the rate of Container Berth (Expansion of BPCL) 377.62
inflation every year.
Approach to container Berths 4 No 290X 21m 1,002.93
The equipment has been replaced after 18
years of operation A BOT has been Buildings 40.82
assumed for 30 years. The replaced equipment
Roads and Pavements 831.54
has been depreciated so that residual value at
the end of BOT period is Zero. Electrical works 477.80
Utilities 128.57
Infrastructure projects are eligible for a tax Rail container depot 77.95
holiday for the initial 10years of their operation
under the tax clause 80I. This clause however RMQC X 8 (54m Reach) 2,969.64
would expire in 2010 and therefore tax rebates RMQC X 4 (63m Reach) 1,606.31
for projects have been considered till 2010. The
tax rate has been taken at 33.66%. RTGC X 43 556.25
Reach Stacker X 6 141.73
Tractor Trailer X 250 1,461.62
Total reclamation (200 Ha) 11,101.40
Total Dredging 2,085.27
Sub Total 24,829.1
BPCL Jetty Costs 3,954.6
Common utilities 825.4
New Landing Jetty 744.8
Total 30,353.1
32
The project is proposed be a BOT over a 30 year period. sharing
The project is proposed to be financed through equity and
Project NPV (in
debt keeping the debt: equity ratio of 1:1. 2,800,899,414 @ 13.15%
Rs)
The WACC has been arrived at using the Zero Coupon
Yield Curve. The cost of debt for the project is estimated IRR 14.236%
to be 9.70% (assuming 100 basis points above the risk
Payback Period
free return rate). 22.3
(in years)
The cost of equity for the project is expected to be around
16.20%, this has been arrived at using the market return
rate, beta for infrastructure index and the risk free return
rate.
NPV and IRR
and is to be completed by 2010-11. This indicates that the
The project shows a positive NPV and IRR indicating project should be started in 2008 1st quarter to meet the
returns for investors in such a project. Exhibit 8.1.22 capacity requirements of the future
shows the result of the NPV and IRR calculations.
The NPV IRR calculation have been assumed at a WACC
of 13.15% assuming a Debt to Equity ratio 1:1. This is in
line with TAMP guidelines which indicate a Debt equity
structure of 1:1.
As can be seen the project is profitable and has a positive
NPV however the project has a low IRR.
33
In Rs Mn Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Revenue (A) - - - 827 3,016 5,736 7,715 7,509 7,796 8,093 8,414
Operating Expenses (B) - - - 165 603 1,147 1,543 1,502 1,559 1,619 1,683
Depreciation (D)
- - - 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200
Tax @ 33.66% of Earnings* (E) - - - - - 654 1,289 1,323 1,479 1,628 1,776
Fixed Assets (F) 23,541 - 6,813 - - - - - - - -
Net Cash flow (A-B-F-E + D) (23,541) - (6,813) 1,862 3,613 5,135 6,084 5,885 5,958 6,046 6,155
Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20
Revenue (A) 8,749 9,099 9,463 9,844 10,240 10,655 11,087 11,539 12,048 12,531
Depreciation (D) 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200
Tax @ 33.66% of Earnings* (E) 1,921 2,063 2,204 2,344 2,485 2,626 2,769 2,914 3,072 3,220
Fixed Assets (F) - - - - - - - - - 13,462
Net Cash flow (A-B-F-E + D) 6,279 6,416 6,567 6,731 6,908 7,098 7,301 7,518 7,767 (5,458)
Revenue (A) 12,935 13,354 13,787 14,236 14,700 15,180 15,678 16,193 16,726 17,279
Depreciation (D) 2,221 2,221 2,221 2,221 2,221 2,221 2,221 2,221 2,221 2,221
Tax @ 33.66% of Earnings* (E) 2,667 2,897 3,113 3,319 3,517 3,708 3,896 4,080 4,263 4,445
Fixed Assets (F) - - - - - - - - - -
Indian tax laws.
Note: Under reduced traffic the terminal will make a loss of 665 Mn in year 3 (revenue-expenses-depreciation) this loss is offset
against the tax liability in year 4 and 5.
34
Exhibit 8.1.22 : Project NPV and IRR with decreased
To assess the profitability of a project a sensitivity analysis traffic
should be carried out. The sensitivity analysis provides
insights on effect of changes in the environment on the
profitability of projects. An additional scenario has been Project NPV
116,883,579 @ 13.15%
considered by KPMG to assess the profitability of project. (Rs)
This is as follows:
z Decrease in traffic by 20%/ Tariff reduction by 20%: IRR 13.196%
This scenario assumes a 20% lower traffic potential/
lower tariff and indicates the feasibility of the project
under such a situation. Payback Period
29.5
(in years)
reduction by 20%
This scenario assesses the profitability of the project
under a reduced traffic/tariff assumption. The traffic has
been reduced by 20% to arrive at NPV and IRR.
As can be seen in Exhibit 8.1.22 the NPV and IRR of the
project is expected to be positive even under the reduced
traffic/tariff assumption.
35
Scenario 1: Decrease by 20% in traffic
Revenue (A) - - - 668 2,450 4,687 6,341 6,208 6,483 6,770 7,083
Operating Expenses (B) - - - 134 490 937 1,268 1,242 1,297 1,354 1,417
Depreciation (D)
- - - 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200
Tax @ 33.66% of Earnings* (E) - - - - - - 607 972 1,125 1,272 1,418
Fixed Assets (F) 23,541 - 6,813 - - - - - - - -
Revenue (A) 7,413 7,758 8,121 8,502 8,902 9,323 9,765 10,230 10,760 11,176
Depreciation (D) 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200
Tax @ 33.66% of Earnings* (E) 1,561 1,702 1,843 1,983 2,124 2,267 2,413 2,562 2,725 2,856
Fixed Assets (F) - - - - - - - - - 13,462
Revenue (A) 11,613 12,068 12,543 13,038 13,554 14,092 14,654 15,240 15,851 16,490
Depreciation (D) 2,221 2,221 2,221 2,221 2,221 2,221 2,221 2,221 2,221 2,221
Tax @ 33.66% of Earnings* (E) 2,311 2,550 2,778 2,996 3,208 3,415 3,620 3,823 4,027 4,233
Fixed Assets (F) - - - - - - - - - -
Indian tax laws.
Note: Under reduced traffic the terminal will make a loss of 665 Mn in year 3 (revenue-expenses-depreciation) this loss is offset
against the tax liability in year 4 and 5.
36
8.1.7 Marine Chemical terminal – phase 1

In 2011-12, JNPT will face capacity pressure from a liquid cargo perspective with total traffic rising to around 7.6
Mtpa after ONGC crude volumes increase to around 3 Mtpa. The current jetty with its facilities will not be sufficient
to handle the increased traffic creating the need for an additional berth.
A BOT operator would be invited to construct a 300 m berth so as to cater to additional liquid traffic. The berth
would be alongside the 2 berths of the BPCL liquid jetty and together will constitute the marine chemical terminal.
The berth will have connectivity to existing pipeline corridor of BPCL. This project will become operational a year
after the relocated BPCL jetty begins operations and would utilize the same pipeline network. Maps are shown in
exhibit 8.1.23.
The BOT operator will have to create a new jetty with the following specifications :-
Length 300 m * 46.5 m wide allowing single side berthing towards the sea for vessels of upto 60000 DWT. The jetty
would be able to receive vessels with LoA of 260 m, Beam 38.1m and draft 13.9m. The berth should be able to
handle vessels with approach velocity of 0.15 m/s. Dredging in front of the berth will be 14.75 m CD to handle
60000 DWT crude carriers with the berth being designed for ultimate depth of 16 m CD.
The berth would service crude oil, POL products, chemicals and other liquids. The equipment required at the berth
would consist of a 16 inch unloading arm to handle crude oil as well as three12 inch arms to handle other traffic.
Connectivity via an approach trestle including 7 m carriage way, 7 m wide pipeline corridor, overall width of 17.2 m
to existing pipelines would be available. The pipeline connectivity for this berth would be the same as with the
relocated BPCL jetty.
Fire protection and fighting abilities including fire water pump sets, tower monitor with electrical remote controlled
water/ foam system, fire alarm system and gas detection system would need to be installed.
A summary of Environmental Impact Assessment findings for the project is provided in Annexure 1.5
Key enablers for the project
The timely shifting of the BPCL jetty along with the associated pipelines would be the most important factor affecting
this project. This is because the new berth would be connected to the same pipeline network.
37
Exhibit 8.1.23 Map of Marine Chemical terminal – 1st phase (300 m berth)
d
cate tty
lo e
Re CL J
B P
MARINE CHEMICAL Area to

be Rec
TERMINAL – First la imed
phase (300 m berth)
38
Forecast of additional traffic Exhibit 8.1.24 : Additional traffic till 2026-27

The additional berth has been suggested owing to
Additional traffic
capacity pressure with total liquid traffic rising to around
Year (in TMTPA)
7.6 Mtpa after ONGC crude volumes increase to around 3
Mtpa. The BPCL jetty with its facilities will not be sufficient 2011-12 2277
to handle the increased traffic as it will begin to reach limit
2012-13 2837
of capacity with traffic reaching 5.48 Tmtpa in 2010-11
creating the need for an additional berth. 2013-14 3098
Forecast for traffic for the berth from 2011-12 till 2026-27 2014-15 3365
is indicated in exhibit 8.1. 24 alongside.
2015-16 4645
2016-17 4939
Investment details
2017-18 5248
The investments shown in exhibit 8.1.25 are primarily :
2018-19 5573
• Construction of jetty with associated piling.
2019-20 5915
• Purchase and installation of liquid equipment
including a 16 inch marine loading arms and three 2020-21 5915
12 inch arms.
2021-22 5915
• Dredging costs apportioned to berth of the Marine
2022-23 5915
chemical terminal (MCT) from area dredged for 4th
container terminal, BPCL jetty as well as 1st phase 2023-24 5915
of MCT.
2024-25 5915
2025-26 5915
2026-27 5915
* Thousand metric tonnes per annum
39
Calculation of revenue -
Exhibit 8.1.25 : Investment Details (in Rs
Revenues are calculated using TAMP guidelines on liquid
million)
cargo. The average wharfage charges are taken at Rs 65
per ton of liquid cargo. The revenue per ton is expected to Investment value in
be constant for the till 2013-14 beyond which it is Year 2010-11
assumed to increase by a marginal 2% per annum. The
marginal growth of revenue/ton has been taken in light of Civil Works &
the recent competitive pressures and in discussions with Buildings
the finance department at JNPT.
Jetty Cost (300m,1
Calculation of additional cost – side berthing) 382.71
Based on discussion with JNPT officials it was felt that
Buildings 16.34
operating expenses to revenue ratio for the first year of
liquid cargo operations could be assumed to be 15%. Plant and Machinery
Operating expenses were then grown at 4% annually to
account for inflation. Liquid Bulk Handling
equipment (New
A BOT has been assumed for 30 years. The equipment
Berth) 141.77
has been replaced in year 20 of operations. New marine
loading arms are put in at an inflation-adjusted cost of Rs Channel related
298 million in 2029-30. costs
Depreciation cycle for replaced equipment is kept at 11
Dredging 342.5
years bringing value of equipment on books to zero at end
of BOT period. This is in line with current BOT contracts in
place at JNPT. Dredging carried out by BOT operator is
depreciated over the period of the contract. Total 883.37
Infrastructure projects are eligible for a tax holiday for the

initial 10 years of their operation under the tax clause 80I.
This clause however would expire in 2010 and therefore
tax rebates for this project have not been considered The
tax rate has been taken at 33.66%.
40
Financial Coverage – Exhibit 8.1.26 : NPV and IRR for BOT operator
For the given project financial coverage is obtained by without revenue sharing
calculating as well as making suitable assumptions
about the developer’s capital structure. The debt- Net present value Rs 556 million
equity structure of the BOT contractor is taken as 1:1
in line with TAMP guidelines.
The Developer's cost of debt is estimated by assigning
Internal rate of return 19.64 %
a spread over the zero coupon yield curve for
Government bonds as well as taking into account a
repayment period. Here we assume the repayment
period as 10 years and taking the ZCYC curve for Payback period 10.4 years
2009 and 2014 as of 11th July 2006 we arrive at the
cost of debt for a loan taken in 2009-10. Here the cost
of debt arrived at 9.91% on taking a risk spread of 100
bps over the risk free rate of debt. The NPV IRR calculation have been assumed at a
Using an equity Beta of 1 we arrive at the Developer's WACC of 13.19% assuming a Debt to Equity ratio 1:1.
cost of equity. One is the average infrastructure index This is in line with TAMP guidelines which indicate a
Beta between July 2002 and July 2005 in Indian equity Debt equity structure of 1:1.
markets. Indian market returns over risk free rate have
been 6.5% historically. Using these assumptions the This NPV is also an indication of the maximum
cost of equity is calculated as 16.41%. Cost of capital amount that a developer can pay as upfront fee for the
arrived at for the project is 13.17% for a D/E ratio of project under the current assumptions.
1:1.
Implementation schedule –
IRR/NPV of the project – The implementation schedule for this project is
The project shows a positive NPV and IRR indicating contingent on the relocation of BPCL jetty and the
positive returns for investors in such a project. Exhibit associated shifting of pipeline. The period for jetty
8.1.26 shows the result of the NPV and IRR construction and allied activities would be 12 months.
calculations.
41
Revenue (A) 0 0 148 184 201 223 314 341 369 400 433
Operating Expenses (B) 0 0 22 23 24 25 26 27 28 29 30
Depreciation (D)
0 0 33 33 33 33 33 33 33 33 33
Tax @ 33.66% of earnings (E) 0 0 41 53 59 66 96 105 114 124 135
Fixed Assets (F) 883 0 0 0 0 0 0 0 0 0 0
Net Cash flow (A-B-F-E + D) (883) 0 117 141 151 165 224 241 260 279 300
Revenue (A) 442 450 459 469 478 488 497 507 517 528
Depreciation (D) 33 33 33 33 33 33 33 33 33 52
Tax @ 33.66% of revenues (E) 138 140 143 146 148 151 154 157 159 162
Fixed Assets (F) 0 0 0 0 0 0 0 0 0 299
Net Cash flow (A-B-F-E + D) 305 310 315 320 325 331 336 342 347 74
Revenue (A) 538 549 560 571 583 594 606 618 631 643
Depreciation (D) 52 52 52 52 52 52 52 52 52 52
Tax @ 33.66% of revenues (E) 165 168 171 175 178 181 184 187 191 194
Fixed Assets (F) 0 0 0 0 0 0 0 0 0 0
Indian tax laws.
42
Sensitivity Analysis - Exhibit 8.1.27 : Sensitivity analysis for NPV/ IRR of

To assess the profitability of a project a sensitivity analysis BOT operator with decreased traffic
should be carried out. The sensitivity analysis provides
insights on effect of changes in the environment on the Net present value Rs 302 million
profitability of projects. An additional scenario have been
considered by KPMG to assess the profitability of project.
These are as follows: Internal rate of return 16.92 %
z Decrease in traffic by 20%/ Tariff reduction by 20%:
This scenario assumes a drop in traffic/tariff by 20% Payback period 13.4 years
across all years of operation, without any drop in
costs. This scenario assumes a drop in traffic/tariff by
20% leading to a drop in revenues and indicates the
feasibility of the project under such a situation.
reduction by 20%
An additional scenario was considered to assess the

profitability of project. This scenario assumes a that
traffic/tariff attracted by the terminal will be 20% lesser
than initially expected across all years of operation. The
cost is not expected to decrease from earlier levels. This
scenario results in decrease in NPV to Rs 302 million. IRR
to falls to 16.92%.
43
Scenario 1: Decrease in traffic by 20%

Revenue (A) 0 0 118 148 161 178 251 273 295 320 346
Operating Expenses (B) 0 0 22 23 24 25 26 27 28 29 30
Depreciation (D)
0 0 33 33 33 33 33 33 33 33 33
Tax @ 33.66% of earnings (E) 0 0 31 41 45 51 75 82 89 97 106
Fixed Assets (F) 883 0 0 0 0 0 0 0 0 0 0
Net Cash flow (A-B-F-E + D) (883 0 98 116 124 135 183 196 211 226 243
Revenue (A) 353 360 368 375 382 390 398 406 414 422
Depreciation (D) 33 33 33 33 33 33 33 33 33 52
Tax @ 33.66% of revenues (E) 108 110 112 114 116 118 120 122 125 127
Fixed Assets (F) 0 0 0 0 0 0 0 0 0 299
Revenue (A) 431 439 448 457 466 476 485 495 505 515
Depreciation (D) 52 52 52 52 52 52 52 52 52 52
Tax @ 33.66% of revenues (E) 129 131 134 136 138 141 143 146 148 151
Fixed Assets (F) 0 0 0 0 0 0 0 0 0 0
Indian tax laws.
44
Summary Coverage
Traffic to be handled in year of completion 7.67 Mn TEUs by JNPT
17.89% of stuffed containers). Apart from this, empties are also produced
empty yards is shown in Exhibit 8.1.28. The total area for empties
available at these yards is around 74.4 Hectares (data obtained from Port
planning and development department at JNPT). Apart from this JNPT
would also have 50 hectares of empties yard inside the port land.
(developed in 2008-09).
As the traffic increases and capacity is expanded through setup of new
terminals (4th terminal phase 1) this area would prove to be inadequate
and will have to be increased. The availability of land near the port is
limited due to development of SEZs etc. Hence it is proposed that the port
develop empties yards within the port land.
SH54 and other projects such as NH4B six laning.
The proposed location of the empties yard is shown in Exhibit 8.1.30.This
area can be given to one of more CFS operators. An analysis of cost and
revenues on an aggregate basis is provided.
45
YAN
AL
K
TO
3 Chirner
MUMBAI
GavanMJP
Tank
PALASPE
10 12
1
6 0 11 1
9
4
N
5 2
H
3
-4
J.N.P.T. 2
1
1 CHRLE
54
8 2
- 7 3
SH
DIGHODA
5 4
-17
NH - 4B 6 TO
1 5 PO
NH
3 4 RANSAI DAM ON
2 A
Khopta Bridge
2 CHIRNER
VASHENI
46
Destuffed Empties
Empties Yards


CFS
Direct to port
Exports by Rail
JNPT
Imports by Rail

47
Summary Coverage
Cost of Development for JNPT The cost of development for the land is expected to be around Rs.
173Crore in 2012-13 on a basis of Rs. 3.3 Crore per hectare (CIDCO
report on reserve pricing in 2005-06). This includes the cost of utilities,
levelling etc
Revenues for JNPT Revenues expected by JNPT would be around Rs. 25 Crore in 2013-14
(based on CIDCO report on lease rentals for JNPT).
Cost of development for empty depot The cost of development for the land is expected to be around Rs. 54
Operator Crore on a basis of Rs. 1.36 crore per hectare (Secondary research on
empty depot costs in 2005-06 Empty yard operators have lesser
investment requirements). This includes the cost of equipment, building,
contingency etc.
Crores/hectare/year (Secondary research on empty depot costs) The total
congestion.
48
Exhibit 8.1.30: 40 Hectares of empty depot land development
40 Hectares of
Empties yard (2012-
13)
49
8.1.9 Development of 56 Hectares of Land for CFS Operations
Summary Coverage
Year of completion of the project 2012-13
Traffic to be handled 7.67 Mn TEUs by JNPT
Need for the project Due to the increase in traffic and addition of capacity (4th terminal) JNPT
would face the need for an increase in supporting infrastructure. The
availability of land around JNPT is expected to be limited in the future due
to the development of NMMSEZ, therefore it is proposed that 70% of the
CFS capacity requirement for JNPT would be developed inside the port
land. The remaining 30% is expected to be developed by private players
outside the port.
Technical Description The availability of land around the port is becoming a constraint in light of
the SEZ setup around the port. It is proposed that 70% of the additional
CFS requirements should be developed within the port boundaries. The
remaining capacity is expected to be satisfied by CFS setups outside the
port. The port would require additional 56 Hectares of CFS area between
2012 and 2015.The area earmarked for the CFS operation is shown in
Exhibit 8.1.31.
The CFS area would be developed in two locations, 20 hectare would be
developed near SH54 while 36 hectares would be developed near the
township. The increase in traffic would be managed by the development
of the Khopta Bridge road in the same year (identified project). Apart from
this Six laning of NH4B and addition of EPZ/FTZ road will also aid in
evacuation of traffic.
JNPT would develop the land and lease it to CFS operator who would
develop and operate the facility. Revenues for JNPT would comprise
primarily of lease rentals obtained from the operators. This area can be
given to one or different CFS. An analysis of cost and revenues on an
aggregate basis is provided.
50
Summary Coverage
Cost of Development for JNPT The cost of development for the land is expected to be around 243 Crore
Rupee in 2013-14 on a basis of 3.3 Crore per hectare (CIDCO report on
reserve pricing ; Base Year- 2005-06). This includes the cost of utilities,
leveling etc
Revenues for JNPT Revenues expected by JNPT would be around Rs. 35.27 Crores/year in
2013-14 (based on CIDCO report on reserve pricing for JNPT; Base
Year- 2005-06).
Cost of development for CFS Operator The cost of development for the land is expected to be around Rs. 225
Crore Rupee on a basis of 4.02 Crore per hectare (Secondary research
on CFS costs; Base Year- 2005-06). This includes the cost of equipment,
building, electrical contingency etc.
Revenue for CFS Operator Revenues expected by operator would be around Rs. 1.3
Crores/hectare/year (Secondary research on CFS costs; Base Year-
2006-07) The total revenues expected from the 56 hectares of land would
be Rs. 74 Crores
land and connectivity to the CFS area. In absence of such connectivity,
the CFS development may lead to congestion. Hence, the review of CFS
development should be done periodically to ensure that it is line with
connectivity at the port and is not causing congestion.
51
Exhibit 8.1.31: 56 Hectares of CFS land development
56 Hectares of CFS
land (2012-13)
(2013-14)
52
8.1.10 Development of the Second phase of 4th Terminal

Project – 1) Development of the second phase of 4th Terminal
2) Development of Rail ICD for the fourth terminal phase 2
3) Development of road for the fourth terminal phase 2
JNPT would start experiencing shortage of container handling capacity by 2014-15, when traffic expected is 9.92
Mn TEUs as compared to capacity of 8.75 Mn TEUs. In the years upto 2016-17, this shortfall could increase up to
up to 2.7 Mn TEUs. As a result, there exists a case to develop the second phase of the 4th container terminal.
The 4th Terminal is proposed to be setup in the year 2014-15 to overcome the shortfall perceived in 2014-15 and
to handle the increase in traffic expected in subsequent years. It is proposed that the terminal would have a quay
length of 1000 m and would extend to the west of the 4th terminal phase 1.Maps are shown in exhibit 8.1.32 ,
8.1.33 and 8.1.34.
The developer will be required to develop the wharf as well as the equipment for handling containers.
The berth is proposed to be 1000m long. The berth would extend to the west of the fourth terminal.
It is proposed that the developer would develop the backup facilities in the reclaimed 200 Ha from the first phase of
the terminal.
The equipment details proposed for the terminal are given in exhibit 8.1.36. The facility is proposed to be equipped
with 12 RMQCs, 43 RTGCs, 6 Reach Stackers and 250 TTs.
The RMQCs would be capable of double moves. Once the fourth terminal second phase becomes operational the
port will be able to maintain double moves proportion to 10% which would further add capacity to the port.
A summary of Environmental Impact Assessment findings for the project is provided in Annexure 1.5
53
Exhibit 8.1.32 Existing state of JNPT's sea side
54
Exhibit 8.1.33 : Planned fourth terminal Phase 2
o
e Tw
as
l Ph
mina
r
th Te
4
55
4th Terminal, phase 2 Exhibit 8.1.34 Fourth terminal phase two and supporting infrastructure
Reclaimed area
to be used as
Container yard
Addition of rail
terminal
Road Leading to
the fourth terminal
56
Forecast of additional traffic Exhibit 8.1.35 Traffic potential (Phase 2 of 4th

Traffic forecast for the 1000m berth has been given Terminal)
alongside, the traffic expected for the fourth terminal is Year Mn TEUs
1.3 Mn TEU going upto 2.39 Mn TEU in the 2rd year of
operations as seen in exhibit 8.1.35. 2014-15 1.34
2015-16 2.39
Calculation of Investments 2016-17 2.40
The Investments Envisaged for the project are shown. 2017-18 2.40
These investments have been calculated on the basis of
discussions with the port as well as through secondary 2018-19 2.40
research. Investments are shown in exhibit 8.1.36. 2019-20 2.40
Apart from this the port would also need to develop CFS
2020-21 2.40
and other supporting infrastructure (hinterland etc) for
supporting the expansion in capacity. These projects 2021-22 2.40
have been identified separately and should be
completed in time to ensure smooth operations of the 2026-27 2.40
terminal. 2031-32 2.40
2036-37 2.40
Calculation of Revenues 2037-38 2.40
It has been assumed that the berthing charges accrue to
2038-39 2.40
JNPT and the terminal operator revenue source is
limited to cargo handling operations 2039-40 2.40
Currently the revenues from cargo handling are around 2040-41 2.40
2650 per TEU. The revenue per TEU is expected to be
constant till 2013-14 beyond which it is assumed to 2041-42 2.40
increase by a marginal 2% per annum. The marginal 2042-43 2.40
growth of revenue./TEU has been taken in light of the
recent Competitive pressures and in discussions with 2043-44 2.40
the finance department at JNPT.
2044-45 2.40
57
Calculation of Additional Costs

Exhibit 8.1.36 Investment details for fourth terminal
Operating costs have been assumed to be 30% of the
phase 2 (in Rs million) *
revenues in the initial year. Subsequently these costs
have been increased by the rate of inflation (4%) every
Container Berth 3,702.73
year.
The equipment has been replaced after 18 years of Approach to container Berths 1,555.00
operations. The replaced equipment has been
depreciated so that residual value at the end of BOT
Buildings 54.78
period is Zero.
A BOT has been assumed for 30 years Roads and Pavements 1,052.17
The rate of inflation for all costs has been taken as 4%
Electrical works 628.75
Infrastructure projects are eligible for a tax holiday for
the initial 10 years of their operation under the tax Utilities 162.68
clause 80I. This clause however would expire in 2010
and therefore tax rebates for projects have been
Rail container depot 102.58
considered till 2010. The tax rate has been taken at
33.66%.
RMQC 5790.03
RTGC 5,012.48
Reach Stacker 98.21
Tractor Trailer 1,849.42
Total 20,008.82
* - Reclamation costs borne by terminal 1 operator
58
The project is proposed be a BOT over a 30 year period. share
The project is proposed to be financed through equity and
Project NPV (In
debt keeping the debt: equity ratio of 1:1. 9,145,856,338 @ 13.27%
Rs)
The WACC has been arrived at using the Zero Coupon
Yield Curve. The cost of debt for the project is estimated IRR 20.51%
to be 10.02% (assuming 100 basis points above the risk
Payback Period
free rate of return). 9.6
(in years)
The cost of equity for the project is expected to be around
16.52%, this has been arrived at using the market return
rate, beta for infrastructure index and the risk rate of
return.
NPV and IRR
returns for investors in such a project. Exhibit 8.1.48
shows the result of the NPV and IRR calculations.
The NPV IRR calculation have been assumed at a WACC
of 13.27% assuming a Debt to Equity ratio 1:1. This is in
line with TAMP guidelines which indicate a Debt equity
structure of 1:1.
As can be seen the project is highly profitable and has a
positive NPV as well as a high IRR.
and is to be completed by 2014-15. This indicates that the
project should be started in 2012 1st quarter to meet the
capacity requirements of the future
59
Revenue (A) - - - 4,618 6,773 6,961 7,154 7,353 7,558 7,768 7,984
Operating Expenses (B) - - - 1,385 2,032 2,088 2,151 2,215 2,282 2,350 2,421
Depreciation (D) - - - 980 980 980 980 980 980 980 980
Tax @ 33.66% of earnings * (E)
- - - 189 821 971 1,107 1,230 1,344 1,450 1,549
Fixed Assets (F) 6,631 - 13,379 - - - - - - - -
Revenue (A) 8,206 8,434 8,669 8,910 9,164 9,348 9,535 9,725 9,920 10,118
Depreciation (D) 980 980 980 980 980 980 980 980 980 980
Tax @ 33.66% of earnings * (E) 1,643 1,732 1,817 1,899 1,981 2,035 2,087 2,136 2,184 2,231
Fixed Assets (F) - - - - - - - - - 26,399
Revenue (A) 10,321 10,527 10,738 10,952 11,171 11,395 11,623 11,855 12,092 12,334
Depreciation (D) 2,947 2,947 2,947 2,947 2,947 2,947 2,947 2,947 2,947 2,947
Tax @ 33.66% of earnings * (E) 944 1,188 1,402 1,589 1,754 1,901 2,031 2,148 2,254 2,350
Fixed Assets (F) - - - - - - - - - -
Indian tax laws.
60
Exhibit 8.1.38 Project NPV and IRR with decreased
To assess the profitability of a project a sensitivity
traffic
analysis should be carried out. The sensitivity
analysis provides insights on effect of changes in the
environment on the profitability of projects. An Project NPV
additional scenario has been considered by KPMG to 5,566,991,002 @ 13.27%
(Rs)
assess the profitability of project. This is as follows:
z Decrease in traffic by 20%/ Tariff reduction by
IRR 17.88%
20%: This scenario assumes a 20% lower traffic
potential/ lower tariff and indicates the feasibility
of the project under such a situation Payback Period
11.8
Scenario 1: Decrease in traffic by 20% / Tariff (in years)
reduction by 20%
This scenario checks the profitability of the project
under a reduced traffic/tariff scenario. The traffic has
been reduced by 20% to arrive at NPV and IRR.
As can be seen in Exhibit 8.1.38 the NPV and IRR of
the project is expected to be positive even under the
reduced revenue assumption. This indicates that the
project is profitable and would maintain its profitability
even if traffic gets effected by around 20%.
61
Scenario 1: Decrease by 20% in traffic
Revenue (A) - - - 3,694 5,418 5,569 5,723 5,883 6,046 6,214 6,387
Operating Expenses (B) - - - 1,108 1,625 1,671 1,721 1,772 1,826 1,880 1,937
Depreciation (D)
- - - 980 980 980 980 980 980 980 980
Tax @ 33.66% of earnings * (E) - - - - 502 643 770 884 989 1,085 1,175
Fixed Assets (F) 6,631 - 13,379 - - - - - - - -
Revenue (A) 6,565 6,747 6,935 7,128 7,332 7,478 7,628 7,780 7,936 8,095
Depreciation (D) 980 980 980 980 980 980 980 980 980 980
Tax @ 33.66% of earnings * (E) 1,258 1,337 1,411 1,483 1,553 1,600 1,645 1,688 1,729 1,769
Fixed Assets (F) - - - - - - - - - 26,399
Revenue (A) 8,257 8,422 8,590 8,762 8,937 9,116 9,298 9,484 9,674 9,867
Depreciation (D) 2,947 2,947 2,947 2,947 2,947 2,947 2,947 2,947 2,947 2,947
Tax @ 33.66% of earnings * (E) 475 712 918 1,098 1,256 1,395 1,518 1,628 1,726 1,814
Fixed Assets (F) - - - - - - - - - -
Indian tax laws.
62
Summary Coverage
Year of completion of project 2015-16
Traffic to be handled in year of completion 11 Mn TEUs by JNPT in 2015-16
Need for the project Due to the increase in traffic and addition of capacity (4th terminal phase
two) JNPT would face the need for an increase in supporting
infrastructure. The availability of land around JNPT is expected to be
limited in the future due to the development of NMMSEZ, therefore it is
proposed that 70% of the CFS capacity requirement for JNPT would be
developed inside the port land. The remaining 30% is expected to be
developed by private players outside the port.
Technical Description The availability of land around the port is becoming a constraint in light of
the SEZ setup around the port. It is proposed that 70% of the additional
CFS requirements should be developed within the port boundaries. The
remaining capacity is expected to be satisfied by CFS setups outside the
port. It is expected that the port would require additional 49 hectares of
CFS land between 2015-16 and 2019-20. The area earmarked for the
CFS operation is shown in Exhibit 8.1.39
The CFS area would be developed in two locations, 25 hectare would be
developed near the township while 24 Hectares would be developed near
the EPZ. The increase in traffic would be managed by the development of
the Khopta Bridge road in the same year (identified project). Apart from
this an additional road connecting the EPZ/FTZ to Aamra link road would
be created (project in 2017-18).
JNPT would develop the land and lease it to CFS operator who would
develop and operate the facility. Revenues for JNPT would comprise
primarily of lease rentals obtained from the operators. This area can be
given to one or different CFS. An analysis of cost and revenues on an
aggregate basis is provided.
63
Summary Coverage
Cost of Development for JNPT The cost of development for the land is expected to be around Rs. 239
Crore in 2015-16 on a basis of Rs 3.3 Crore per hectare (CIDCO report
on reserve pricing ; Base Year- 2005-06). This includes the cost of
utilities, levelling etc
Revenues for JNPT Revenues expected by JNPT would be around Rs. 34.81 Crores /year in
2015-16 (based on CIDCO report on reserve pricing for JNPT; Base
Year- 2005-06).
Cost of development for CFS Operator The cost of development for the land is expected to be around Rs 213
Crore on a basis of Rs 4.35 Crore per hectare (Secondary research on
CFS costs; Base Year- 2005-06). This includes the cost of equipment,
building, electrical contingency etc.
Revenue for CFS Operator Revenues expected by operator would be around Rs 1.42
Crores/hectare/year (Secondary research on CFS costs; Base Year-
2006-07) The total revenues expected from the 49 hectares of land would
be Rs 69 Crores
land and connectivity to the CFS area. In absence of such connectivity,
the CFS development may lead to congestion. Hence, the review of CFS
development should be done periodically to ensure that it is line with
connectivity at the port and is not causing congestion.
64
Exhibit 8.1.39: 49 Hectares of CFS land development
56 Hectares of CFS
49
land (2015-16)
(2013-14)
65
Summary Coverage
Traffic to be handled in year of completion 11 Mn TEUs by JNPT by 2015-16
17.89% of stuffed containers) apart from this empties are also produced
empty yards is shown in Exhibit 8.1.40. The total area for empties
available at these yards is around 74.4 Hectares (data obtained from Port
planning and Development Division at JNPT). Apart from this JNPT
would also have 90 hectares of empties yard inside the port (developed in
2008-09 and 2012-13).
As the traffic increases and capacity is expanded through setup of new
terminals (4th terminal phase 2) this area would prove to be inadequate
and will have to be increased. The availability of land near the port is
limited due to development of SEZs etc. Hence it is proposed that the port
develops empties yards within the port.
SH54 and other projects such as NH4B six laning.
The location of the empties yard is shown in Exhibit 8.1.42.This area can
be given to one or different operator. An analysis of cost and revenues on
an aggregate basis is provided.
66
YAN
AL
K
TO
3 Chirner
MUMBAI
GavanMJP
Tank
PALASPE
10 12
1
6 0 11 1
9
4
N
5 2
H
3
-4
J.N.P.T. 2
1
1 CHRLE
54
8 2
- 7 3
SH
DIGHODA
5 4
-17
NH - 4B 6 TO
1 5 PO
NH
3 4 RANSAI DAM ON
2 A
Khopta Bridge
2 CHIRNER
VASHENI
67
Destuffed Empties
Empties Yards


CFS
Direct to port
Exports by Rail
JNPT
Imports by Rail

68
Summary Coverage
Cost of Development for JNPT The cost of development for the land is expected to be around Rs. 136
Crore in 2015-16 on a basis of Rs. 3.3 Crore per hectare (CIDCO report
on reserve pricing in 2005-06). This includes the cost of utilities, levelling
etc
Revenues for JNPT Revenues expected by JNPT would be around Rs. 19.9 Crores /year
(based on CIDCO report on reserve pricing for JNPT).
Cost of development for Empty Operator The cost of development for the land is expected to be around Rs 43
Crore (Secondary research on empty costs; Base Year- 2005-06). This
includes the cost of equipment, building, electrical contingency etc.
Crores/hectare/year (Secondary research on empty costs) The total
congestion.
69
Exhibit 8.1.42: 28 Hectares of empty depot land development
28
28 Hectares
Hectares of
of
Empty yard
Empty yard (2015-
(2015-
16)
16)
70
8.1.13 Reducing POL tank farm dwell time
Summary Coverage
Project to be undertaken Construction of additional POL product tanks
Year project is to be operational 2018-19
Need for the project JNPT existing tank farm capacity for POL products will fall short of the traffic
in POL products at an average dwell time of 30 days. Tank farm operators
will need to either construct additional tanks or turn around tanks with
shorter dwell time of 25 days.
Brief description of the project Tank farm operators will need to construct 15% additional POL tankage
capacity if they want to maintain dwell times. Alternatively they can reduce
dwell times to 25 days by turning around product faster. These tank farms
can be constructed in land reclaimed during 4th container terminal
construction.
Key enablers for the project Acquisition of land for the project will be the key factor for the success of the
project.
71
8.1.14 Reducing pigging hours
Summary Coverage
Project to be undertake Reducing pigging hours by 1 for each vessel operation
Need for the project JNPT will face capacity pressure with total traffic rising to around 11.4 Mtpa
IN 2019-20. Of this 7 Mtpa will require pigging with substantial number of
pigging hours increasing unoperational time.
Brief description of the project JNPT along with terminal operators would need to invest in technology to
reduce pigging hours by 1 hour for each vessel operation. This could be
through improved pig or other improvements.
Key enablers for the project Utilization of technology to enable reduction in pigging hours would be the
key enabler of this project
72
8.1.15 Construction of second marine chemical berth
Summary Coverage
Project to be undertaken Construction of berth of 300 m to handle liquid products
Need for the project JNPT will face capacity pressure with total traffic rising to around 12.5 Mtpa
after ONGC crude volumes increasing above 5 Mtpa. The three berths for
liquid chemicals with associated facilities will not be sufficient to handle the
increased traffic creating the need for an additional berth
Brief description of the project A BOT operator would be invited to construct a 300 m berth along with
associated dredging so as to cater to additional liquid traffic. The BOT
operator would also need to deploy marine loading arms as well as
pipelines to cater to the traffic. A pipeline corridor for connecting pipelines to
the berth would also need to be constructed
Key enablers for the project The completion of dredging activity would be the key to the inception of the
project. The revenue sharing agreement between the BOT operator and
JNPT will also determine the success of the project
73
8.1.16 Reduction of POL tank farm dwell time
Summary Coverage*
Project to be undertaken Construction of additional POL product tanks
Need for the project JNPT existing tank farm capacity for POL products will fall short of the traffic
in POL products at an average dwell time of 25 days. Tank farm operators
will need to either construct additional tanks or turn around tanks with
shorter dwell time of 20 days.
Brief description of the project Tank farm operators will need to construct 20% additional POL tankage
construction.
project
Dwell time figure based on absence of any prior tank farm construction in 2018-19
74
8.1.17 Reduction of chemical tank farm dwell time
Summary Coverage
Project to be undertaken Construction of additional chemical tanks
Need for the project JNPT existing tank farm capacity for chemicals will fall short of the traffic in
POL products at an average dwell time of 30 days. Tank farm operators will
need to either construct additional tanks or turn around tanks with shorter
dwell time of 25 days.
Brief description of the project Tank farm operators will need to construct 15% additional chemical tankage
construction.
project
75
Chapter 9
Planned public investments
76
9.1 Planned Public Investment Projects
9.1.1 Hiring of Pilots
Summary Coverage
Financing Source: JNPT Internal Resources
Need for the project JNPT would face an increase in vessel calls with increase in traffic. This
would require additions of pilots, tugs and launches at regular intervals in
line with the increase in vessel calls.
Pilots are required for almost all vessels at JNPT to navigate the JNPT
channel. Each pilot is capable of 4-5 moves a day and based on the
vessel traffic additional pilots would be required.
Technical Description The increase in vessel calls would lead to increase in requirement of
pilots at various points of time. JNPT should plan for the same in advance
and hire pilots to meet future capacity.
Pilots should be trained and capable of handling all vessels operating at
JNPT.
Key enablers for the project The success of the project would depend on obtaining the required
clearances and recruiting and retaining the best talent.
Year Vessel Calls Pilots Required Pilots Available No of Pilots to be hired
2006-07 to 2008-09 2768 – 3399 12 10 2
2010-11 to 2011-12 4045 – 4408 14 12 2
2012-13 to 2013-14 4746 – 5086 16 14 2
77
9.1.2 Hiring of Tugs
Summary Coverage
Almost two tugs are required per vessel at JNPT. The tugs are used to
navigate and turn the ship.
Technical Description The increase in vessel calls would lead to increase in requirement of tugs
at various points of time. JNPT should plan for the same in advance and
hire tugs to meet future capacity. The specification of the tugs should be
such that they are capable of handling all vessel sizes at JNPT.
clearances and hiring the tugs with the requisite specifications.
Year Vessel Calls Tugs Required Tugs Available No of Tugs to be hired
2006-07 to 2008-09 2768 - 3399 11 7 4
2009-10 to 2011-12 3754 - 4408 13 10 3
2012-13 – 2014-15 4746 – 5459 15 13 2
78
9.1.3 Hiring of Pilot Launches
Summary Coverage
Each ship requires a pilot launch to carry the pilot to the ship and to bring
the pilot back from the ship.
Technical Description The increase in vessel calls would lead to increase in requirement of pilot
launches at various points of time. JNPT should plan for the same in
advance and hire launches to meet future capacity.
The number of launches required can be reduced further by hiring
launches that are capable of faster speeds and therefore can transfer the
pilot to and from the ship faster.
clearances and hiring the launches with the requisite specifications.
Year Vessel Calls Pilot Launches Pilot Launches No of Pilot Launches to be

Required Available hired
2007-08 – 2010-11 3078-4045 7 5 2
2011-12 – 2014-15 4408-5459 9 7 2
* As the speed of pilot launch increases it is probable that the number of pilot launches required would decreases
(this is because with higher speeds the same launch can service more number of vessels)
79
9.1.4 Conversion of a railway track to full operational railway siding inside the port
Summary Coverage
Project to be undertaken Conversion of one of the escape tracks at JNPCT to full operational
railway siding.
Year of Completion of project 2006-07
Need for the project The increase in Rail Capacity outside the port due to addition of a railway
track will lead to increase in Containers coming by Rail. These will require
additional railway siding. JNPCT has already planned for conversion of
one of the railway siding to full operations.
Technical Description The project would entail acquisition of two RMGCs and conversion of one
railway siding into full operations railway track. The output from KPMGs
assessment model also projects the requirement of the project. This
should be completed by 2006-07
clearances on time
Costs 2 RMGCs : Rs. 30.3 Crores
Expected capacity addition The project is expected to add capacity to handle additional 350000
TEUs at the Rail ICDs within JNPT
80
9.1.5 Common user pipelines
General Description and motivation Key consideration for the project

As ONGC crude volumes start increasing in 2007-08, The requirement of shifting of the BPCL jetty in 2010-11
JNPT will face capacity constraints arising from might dissuade JNPT from investing in the creation of
existing inefficiencies in the pipeline network. This is such infrastructure. In such case it may be feasible to
because of the mismatch in ship discharge rate vis-à- operate the jetty at higher occupancy level of around 85-
vis pipeline flow rate for certain pipelines. This is true 90% from the years 2007-08 to 2009-10 till the shifting of
for 8” and 12” pipelines in the cluster of tankages BPCL jetty happens. The investment in the laying of
around 6 km from the port. pipeline to new marine chemical terminal may be
financially more viable. An alternate layout in that
To reduce the pipeline inefficiency which will allow eventuality is seen in exhibit 9.1.2.
handling forecasted crude volumes, there would be the
requirement of additional pipelines. It would be Alternate Mechanism for common user pipelines –
beneficial for these pipelines to be common user An alternative to the laying of new pipelines may be the
pipelines as creation of an additional pipeline dedicated usage of BPCL pipelines as common user pipelines. BPCL
to a single tankage may not improve the flow rate. currently has 3 pipelines with diameter exceeding 20 inches
The creation of these pipelines could be taken up by for handling of POL products. There is significant
JNPT who could then charge for usage of pipeline underutilization of these pipelines. Hence, it may be
hours. For instance, Kandla Port charges Rs 10,800 possible to utilize upto 2 of these pipelines as common user
per 8 hours of usage for a 20” inch pipeline. The layout pipelines by other tankages handling POL products.
is shown in exhibit 9.1.1. This would enable tankages such as Reliance, IMC and
Technical Description BSL to use the BPCL pipelines for transferring POL
products. The pricing of these services would be the key for
The pipeline network installed by JNPT would consist their recurring usage by tank farms. High pricing of services
of 2 pipelines of the following specifications - will impact the usage of these pipelines and the overall flow
• One 20 inch pipeline to handle POL products of rate at the jetty. Effective pricing will create greater cargo
class A/B/C handling revenues for BPCL as more liquid cargo is
handled at the berth.
• One 16 inch pipeline to handle Edible Oil
products (unclassified) Thus, ensuring effective usage of BPCL pipelines will
require coordination between JNPT, BPCL and the tank
The length of the pipeline would be around 6 km and farm operators.
would terminate at individual tankages through a
junction arrangement. The tankages that might need This alternative would involve an investment in the creation
connectivity to either/both of the pipelines are Reliance, of connections to the common user manifold from select
Bharat Shell, VAL, IMC and GBL. tank farms. This cost is significantly lower than the laying of
a common user pipeline till the berth.
81
Exhibit 9.1.1
Common user
pipeline network
Common user Pipeline

Network
JNP ( At Present)
82
Exhibit 9.1.2
Alternate Common
user pipeline
network
Common user Pipeline

Network
83
Description of benefits – Exhibit 9.1.3: Additional traffic till 2026-27

The primary benefit to JNPT through implementation
Additional traffic
of this project would be the improved utilization of the
Year (in TMTPA)
liquid berth. This is important as a sharp increase in
volumes is likely owing to ONGC crude traffic of over 2007-08 1,130.49
1 Mtpa from 2007-08 onwards.
2008-09 1,369.68
Removing the pipeline constraints when possible is
important for JNPT to ensure optimum utilization of 2009-10 1,613.20
the berth and increase traffic and in turn revenue. In 2010-11 1,613.20
light of the reasonably high revenues that will accrue
to JNPT out of the revenue share from BPCL, JNPT 2011-12 1,613.20
can hope to recover the costs of installation of the 2012-13 1,613.20
pipeline. An additional revenue stream will be created
from the leasing charges on the common user 2013-14 1,613.20
pipeline introduced after agreement with the tank
2014-15 1,613.20
farms.
2015-16 1,613.20
Probable additional traffic as a result of the common
user pipelines is shown in exhibit. 9.1.3. 2016-17 1,613.20
Calculation of the Investment - 2017-18 1,613.20
The investments needed for this operation are: 2018-19 1,613.20
Laying of a 20 inch pipeline over a length of 6 km 2019-20 1,613.20
costs Rs 96 million.
2020-21 1,613.20
Laying of a 16 inch pipeline over a length of 6 km
costs Rs 72 million. 2021-22 1,613.20
Total investments needed are Rs 168 million in 2022-23 1,613.20

present value terms and Rs 174.7 million in 2007-08 2023-24 1,613.20
2024-25 1,613.20
84
Financial Coverage –
For the given project financial coverage is obtained by assuming financing of the project by JNPT's internal reserves.
This is because the infrastructure being created is common user based.
The cost of debt is estimated by assigning a spread over the zero coupon yield curve for Government bonds as well as
taking into account a repayment period. Here we assume the repayment period as 10 years and taking the ZCYC curve
for 2010 and 2015 as of 11th July 2006 we arrive at the cost of debt for a loan taken in 2010-11. Here the cost of debt
arrived at 8.32% i.e. the risk free rate of debt for a loan in 2010-11 which is also equal to the opportunity cost of JNPT's
cost of capital.
The project implementation should begin at the earliest given the requirement in 2007-08. The period of implementation
could be around 12 months. The project might be pushed back from a conscious decision to operate at higher berth
occupancy till shifting of the BPCL jetty happens in 2009-10.
85
9.1.6 4 laning of SH - 54
Summary coverage
Financing source : SPV
Details of Project Four laning of SH54 and Aamra Marg
Need for the project Currently JNPT has only one 4 lane evacuation road – NH4B. For traffic headed
towards Mumbai and Gujarat, the existing 2 lane road of SH-54 and Aamra Marg is
proving to be a capacity bottleneck. This will be especially relevant as GTII begins
operations and traffic serviced rises over the next couple of years. There is need for an
4 lane evacuation road to avoid congestion arising out of the current 2 lane road as seen
in exhibit 9.1.5
Brief description of the project NHAI as part of an SPV Mumbai-JNPT Road Co. Ltd. Is carrying out 4 laning of SH-
54 and Aamra Marg. The details of the project include the4 laning of SH-54 from km
6.400– 14.550 and construction of four lane Aamra Marg including six lane major bridge
across Panvel Creek (Belapur-Gavanphata – 6.202 km).
Financial coverage The coverage of the project is through a Special purpose vehicle with participation from
NHAI, JNPT , CIDCO and PWD. The SPV Mumbai-JNPT road Company Ltd. was
formed to undertake the expansion to 4 lanes of both NH4B and SH-54. The details of
the SPV financing structure are made available in exhibit below. Total cost of the 2
projects of road widening is Rs 3580 million as seen in exhibit 9.1.4
Exhibit 9.1.4: SPV Financing Details
Particulars Rs millions Rs millions
Equity 1460
NHAI 970
JNPT 400
CIDCO 90
Debt by Financial institutions 1430
Subordinate Debt 690
JNPT 600
CIDCO 90
Total 3580
86
9.1.6 4 laning of SH - 54
4 laning of SH- To Aamra
54 and Aamra Marg
ta
Marg
n
ha
ep
El
Port terminals SH54
NH4B
Port Approach
Road
Exhibit 9.1.5: 4 laning of SH54
87
9.1.7 Grade separators at Karal and Guvan Phata
Summary coverage
Financing source : SPV
Details of Project Grade separators at Karal and Guvan Phata
Need for the project At present at Karal junction , traffic from SH54 and NH4B headed for the other
highway/CFS tend to cause congestion on the main port road. A significant
share of traffic uses the junction only to change roads but this still blocks access
to the port. At Gavan Phata traffic from NH4B, SH81, Aamra Marg and SH54
headed towards Mumbai, Panvel and the port meet causing congestion. Grade
separators (these allow traffic to flow in all 4 directions at a junction without
hampering traffic headed to any other direction) at these junctions would help in
reducing congestion
Brief description of the project Grade separators at the 2 junctions of Karal and Guvan would help in the free
flow of traffic onto any road/highway from any road without encountering
/obstructing traffic. This would significantly reduce congestion as well as reduce
accidents and help in the highways being utilized at their full capacity.
Financial costs The coverage of the project will be through the same Special purpose vehicle carrying
out widening of NH4B and SH54. The project costs Rs 800 million as per NMDP
plans. Of this JNPT plans to fund Rs 400 million from its internal resources.
In 2008-09 terms the cost of the project will be Rs 865 million.
Key requirements JNPT would need to initiate the formation of an SPV with various partners so as
to facilitate execution of this project
A map of the grade separators is available in exhibit 9.1.6
88
Exhibit 9.1.6: Grade Separators at Karal and Guvan Phata
To Aamra
Marg
SH54
NH4B
Grade separator
at Karal Phata
89
9.1.8 Increase shallow berth moves to 16 moves per hour
Summary Coverage
Project to be undertaken Increase shallow berth moves to 16 moves per hour
Year 2008-09
Traffic to be handled at JNPT in year of 4.43 Mn TEUs by JNPT in 2008-09
completion
Need for the project As seen JNPT would face capacity shortfall in areas of RMQC, wharf to
yard and gate capacity. The shallow water berth can increase its capacity
if RMQCs are deployed on the berth.
Technical Description The shallow water berth is currently being used for containers and bulk. It
primarily serves ships with their own cranes or reach stackers are used to
unload/load cargo.
Conversion of this berth to a container berth would yield benefits to the
port as it would increase the throughput of the port and increase the
efficiency of the port.
The project would involve replacement of two RMQCs on JNPCT and
relocation of the same to the shallow water berth (RMQCs 2 & 7a will be
replaced and these two RMQCs will be shifted to the shallow water berth)
Key enablers for the project Benefits from this project would only be derived if the completion of
expansion of the wharf approach road and improvement of gate capacity
are completed at the same time. Without the development of wharf
approach road and improvement of gate capacity an improvement in
shallow water berth may lead to congestion.
Costs The cost of the project is limited to relocation cost which is expected to be
around 5-10 Crores
Expected capacity addition Increase in moves of shallow water berth is expected to increase the
capacity by 50,000 TEUs
90
9.1.9 Additional Link road

In 2009-10 the expected number of TEUs go uptil 5.17 million TEUs from 2008-09 forecasts of 4.4 million TEUs. The
existing link roads of NH-4B and SH-54 will start falling short of capacity to handle the increase in road traffic as a result
of the increased traffic.
To ease evacuation and prevent congestion on major link roads of NH-4B and SH-54, an additional 4 link road would
need to be created connecting JNPT to the immediate hinterland. The road would also need to serve the traffic
expected to be generated as a result of the EPZ/FTZ set to begin operations in 2009-10. Thus a 4 lane road acting as
an approach road from the Y junction and extending upto Panvel creek bridge via Belpada is suggested.
The layout is highlighted in exhibit 9.1.7.
Presently JNPT accessibility is from a single point from where traffic gets routed to NH-4B and SH-54. Moreover in
case of any hindrance on either of those two highways the port could get cut off from the country. The second link to
JNPT will pass through to the Panvel creek bridge via Belpada joining JNPT to facilitate the port traffic to and from
Mumbai, Navi Mumbai region. The road will be a 4 lane road with paved shoulders connecting the Y junction and
winding pass theEPZ/FTZarea and connecting to Aamra Marg. The total distance traversed by the road will be 10.5 km.
The road will need to be constructed over a significant stretch of water-logged land. Hence an extensive settling
process would need to be carried out before construction work can begin on the road. Similar settling is being carried
out for SH-54 at this point in time. Geotextiles would also be needed in construction of the road so as to allow settling
of fine soil particles while allowing water to pass through.
Key enabler for the project
The grant of timely permission to allow for a sufficient period of time for construction will be a key enabler of the project.
Currently CIDCO has prepared a brief project profile of this link which proposes a road between JNPT and Aamra Marg
near Panvel creek bridge. This is currently referred to the National Highway Authority of India (NHAI).
91
Exhibit 9.1.7: Additional Link Road
SH54
To Aamra
Marg
Additional Link
Road via Belpada
(2009-10)
NH4B
92
9.1.9 Additional Link road
Benefits of the project –

Exhibit 9.1.8: Illustrative SPV Financing Details
Key benefits of the project are prevention of congestion
on SH54 and NH4B. Simultaneously the link road Particulars Rs millions Rs millions
allows for shorter evacuation distance for containers
headed to the northern hinterland. Another prominent Equity 670
benefit of the project is the handling of traffic created by
the free trade zone and preventing their spill over onto NHAI 440
NH4B and SH54.
It also prevents the port from getting cut off from the JNPT 185
country in case of any impediment on NH4B or SH54.
CIDCO 45
Costs of the project – Debt by Financial institutions 670

The length of the road is 10.5 km. CIDCO has prepared
a report stating that block estimated cost of the road is Subordinate Debt 340
about Rs 1680 million. The estimated cost in 2009-10
after adjusting for inflation would be Rs 189 0 million. JNPT 290
CIDCO 50
Financial coverage –
It is envisaged that the project use a participative Total 1680
financing approach similar to the financing structure
deployed by the SPV “Mumbai- JNPT Port Road Co
Ltd.” for the expansion of NH4B and SH54.
A possible SPV structure is indicated in exhibit 9.1.8
93
9.1.10 Additional Evacuation Road
Summary Coverage
Year 2009-10
TEUs to be Handled 1.34 Mn TEUs – Rail

3.84 Mn TEUs – Road
Areas and extent of shortfall Evacuation road
Project to be undertaken Additional evacuation road to be constructed
Need for the project Due to the construction of the EPZ/FTZ the ratio of Noncommercial
traffic will increase. This would require additional evacuation road to be
constructed in the port.
Technical Description It is proposed that an additional evacuation road is developed which can
also service the EPZ/FTZ that has been developed in 2009-10. This
road would originate from the Y junction and join the additional link road
created out of Ulwe Node. It would enable traffic from EPZ/FTZ to exit
the road without congesting any other roads in the port as seen in exhibit
9.1.9.
clearances on time
Distance and Cost The length of the road is 4.108 Km and the cost for developing a four
lane road is expected to be around Rs 41 Crore (10 Crore/Km for a four
lane road)
94
Exhibit 9.1.9: Additional Evacuation Road
fi c
raf
T
Z
EP
Additional Link
Road (2009-10)
Evacuation (EPZ)
Road
(2009-10)
95
9.1.11 Dronagiri link road
Summary Coverage
Financial source : JNPT Internal Resources
Details of Project Tank farm road to be extended upto Dronagiri node
Need for the project At present traffic from Dronagiri node intended for the port has to use highway
NH4B and traverse through Karal junction. This is a major cause for congestion.
The extension of the road to Dronagiri node will reduce congestion and ease
flow of traffic.
Brief description of the project The project will be a 4 lane road of width 60 m extending to a distance of 2.63
kms. Currently the road will originate from tank farm road and extend to
Dronagiri node. The road will eventually be linked to the 4th container terminal
road at the port end and to the Khopta bridge road (currently being executed) by
the PWD at the Dronagiri node end).
Financial costs This project is likely to be executed by JNPT as the road lies within port
boundaries. The length of the road is 2.63 Km and the cost for developing a four
lane road is expected to be around Rs 26.3 Crore in present value terms (10
Crore/Km for a four lane road). In 2009-10 terms the road can be expected to
cost Rs 29.6 crores.
A map of the Dronagiri link road is available in exhibit 9.1.10.
96
Exhibit 9.1.10 : Road to Dronagiri Node
Road to Dronagiri
Node (2009-10)
To Dronagiri Node
97
9.1.12 Dredging
Summary Coverage
Financing Source: JNPT Internal Resources and Debt
Project to be undertaken Dredging to enable fully loaded 6000 TEU ships and 7500 TEUs partially
laden ships during tidal window
Number of vessels to be handled 3367 in 2008-09
Need for the project As the average ship size on the Europe Asia route increases, it would be
found that JNPT would not be able to handle more than 20% of the types
of ships in the Europe Asia route. This could lead to some large shippers
moving to other ports. To avoid this JNPT would need to dredge its
channel to enable ships of upto 6000 TEUs at all times and of upto 7500
TEUs at tidal window. This could be undertaken in two phases.
The first phase would involve dredging to enable 6000 TEU fully laden
ships with tidal window and the second phase of dredging can further
deepen the channel to enable a fully laden 6000 TEU vessel to be
serviced at all times.
Technical Description Phase one would involve dredging the channel to a depth of around
12.5m at all times to enable fully laden 6000 TEU vessel to arrive during
the tidal window (at 14 m depth)
The details of the projects would involve the following:
z The total area of dredging required in the JNP/MbP region is
estimated at 1775 ha.
98
9.1.12 Dredging
Technical Description z The total quantity of proposed capital dredging works out to
approximately 48.5 million cubic meters with annual maintenance
dredging requirements of 5.0 million cubic meters.
z The total length of the channel along which dredging needs to
take place is 33,525 meters.
z Material that has to be dredged includes 48.10 million cu.m. of
marine clay and 0.47 million cu.m. of rock. (comprising of 0.32
million cu.m of weathered rock and 0.15 million cu.m. of sound
rock requiring pre-treatment)
Cost The costs for the capital dredging are tentatively forecasted at Rs. 800
crores. This is expected to be funded through a mix of debt and ports
internal resources.
Future Plans Phase 2 of the project can be undertaken in the year 2015-16 when JNPT
would again face a limitation on channel depth.
Enablers The success of the project would depend on obtaining the clearances and
attracting larger ships through marketing efforts and other means to
recover the costs of dredging
99
9.1.12 Dredging
Having completed the dredging JNPT would be Exhibit 9.1.11 : Vessels that can be serviced by JNPT
able to accommodate 6000 TEU fully laden
vessels using the tidal window. The proportion 2005-06
of vessels that JNPT would be able to handle Percent (Before
post the dredging is provided alongside accommodation Dredging) Post Dredging
Based on this the estimated proportion of < 750 100% 100%
Europe Asia traffic that JNPT would not be able
to accommodate would be as shown in exhibit 750 - 1750 100% 100%
9.1.12. 1750-3500 100% 100%
As can be seen in 2015-16 the proportion of
traffic that cannot be accommodated increases 3500-5500 38% 71%
to nearly 16.83% and the next phase of dredging 5500-8000 5% 25%
would be required in 2015-16.
8001-13000 0% 0%
* Figures based on discussions with port
Exhibit 9.1.12 Percentage of Europe Asia Vessels that cannot be accommodated by JNPT post Phase I dredging
2008- 2009- 2010- 2011- 2012- 2013- 2014- 2015- 2016- 2017- 2018-
09 10 11 12 13 14 15 16 17 18 19
< 750 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
750 - 1750 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
1750-3500 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
3500-5500 4.23% 4.26% 4.18% 4.21% 4.24% 4.28% 4.31% 4.35% 4.38% 4.23% 4.26%
5500-8000 10.65% 11.62% 11.14% 11.26% 11.37% 11.48% 11.60% 11.71% 11.83% 10.65% 11.62%
8001-13000 0.00% 0.00% 0.92% 0.92% 0.92% 0.92% 0.92% 0.92% 0.91% 0.00% 0.00%
Total 14.88% 15.88% 16.24% 16.39% 16.53% 16.68% 16.83% 16.98% 17.13% 14.88% 15.88%
100
9.1.13 Increase RMQC moves at JNPT to 24 moves per hour
Summary Coverage
Project to be undertaken Increase RMQC moves at JNPT to 24 moves per hour
Traffic to be handled in year of completion 5.2 Mn TEUs in 2009-10
Need for the project JNPT would face capacity pressures in 2009-10 due to increase in traffic.
However in light of the replaced RMQC at JNPCT (project done in 2008-
09) and the presence of double move cranes at GTI it is possible to
augment capacity by increasing the moves per hour to 24
Technical Description The project would involve replacement of three RMQCs on JNPCT. 3
RMQCs that are owned by JNPT since 1989 can be replaced by new
RMQCs as these cranes would have outlived their life by this period. Both
of these RMQCs should be double-move capable so that they can allow
increased capacity in later years.
It will be important to carry out a review of JNPT civil infrastructure to
allow for optimal output from the new RMQC’s. An initiative on this front
should be considered by the port at the time of installing new equipment.
Key enablers for the project The successful execution of the project would require the necessary
training for crane operators for handling double move cranes. Apart from
this, it would also require an increase in automation at gates to reduce
congestion, since traffic would increase. This project should ideally be
taken up after the 330 m wharf expansion project is completed (2008-09)
Cost (specific for JNPCT) 3 RMQCs :Rs 120 Crores

Additional TTs would need to be hired
Expected capacity addition Around 1 Mn TEUs across all terminals.
101
9.1.14 Six Laning of NH4B
Summary coverage
Financial source : SPV
Details of Project Six laning of NH 4B **
Need for the project The link highway of NH4B will need to be widened owing to the sharp increase
in traffic as the first phase of the 4th container terminal begins operations. (The
traffic in 2010-11 goes up to 5.9 million TEUs.) Further there is a need for
additional connecting link roads after the introduction of 4 lanes of approach
road to the port during 2009-10.
Brief description of the project NH-4B 4 laning was completed in end 2005 and this will be widened to 6 lanes
to cater to additional traffic from the port. NHAI is likely to take up this widening
activity. Map is shown in exhibit 9.1.13.
Financial coverage The coverage of the project is likely through a SPV between NHAI, CIDCO and
JNPT. Alternatively a JV with JNPT and NHAI may also be considered. JNPT's
contribution to the total cost of Rs 450 million is likely to be Rs 50 million. In
2010-11 terms the cost of the project would be Rs 468 million.
Key requirements JNPT would need to initiate the formation of an SPV with various partners so as
to facilitate execution of this project.
** - It may be necessary to initiate studies to further expand capacity of NH-4B to 8 lanes by 2013-14. This is in light
of the planned Nava-Sewri trans-harbour link expected to significantly increase traffic from Mumbai to NH4B. This
project is currently in initiation phase and is expected to take 7-8 years for completion. Given the uncertainty and
unavailability of traffic forecasts on NH4B due to the Nava-Sewri link, it is recommended that a study be carried out
on the same when the project plan is clearer.
102
Exhibit 9.1.13: 6 laning of NH 4B 6 laning of NH4B
To Aamra
Marg
103
9.1.15 Additional road linking port and highways
Summary coverage
Financial source : Internal Resources
Details of Project Additional road linking port and highways
Need for the project An additional link road will be needed owing to the sharp increase in traffic as
the first phase of the 4th container terminal begins operations. The EPZ/FTZ
and CFS operations within a port will also lead to an increase in the non
commercial traffic. Owing to this an additional road will be required.
Brief description of the project A 4 lane road connecting the port container road to main highways. This road
will pass next to the EPZ/FTZ and near the CFSs to allow for movement of non
TEU carrying traffic without interfering with the port operations.
Financial coverage The project would be funded by JNPT as the road lies within the port
boundaries. The project has been identified by JNPT and planning for the same
has begun. Currently the project is undergoing a techno-economic feasibility
study. The project cost is estimated to be around 45 Crores in present value
terms. In 2010-11 the project would cost Rs 52 crores.
104
9.1.15 Additional road linking port and highways
Additional Link road
SH54
NH 4B
Additional road linking port

to highways
(2010-11)
Exhibit 9.1.14 : Additional road

linking port and highways
105
9.1.16 4th container terminal link road
Summary Coverage
Financial source : JNPT Internal Resources
Details of Project 4th container terminal road to be extended to existing Drongairi Node road
Need for the project As the 4th container terminal begins operations, traffic from the terminal will need
to be evacuated bypassing the existing port approach road to avoid congestion.
Linking to the Dronagiri link constructed in 2009-10 will allow for easy
evacuation of containers to the CFS zone.
Brief description of the project The project will be a 4 lane road of width 60 m extending to a distance of 3.30
kms. The road will originate from the approach road to the 4th container terminal
made by the BOT operator and join the Dronagiri link node behind the tank
farms. The road will eventually be linked through to the Khopta bridge road
(currently being executed by the PWD) at the Dronagiri node end.
Financial costs This project is likely to be executed by JNPT as the road lies within port
boundaries. The length of the road is3.3 Km and the cost for developing a four
lane road is expected to be around Rs 33.3 Crore (10 Crore/Km for a four lane
road). In 2010-11 terms the road will cost Rs 39 crores.
A map of the 4th container terminal road till Dronagiri link is available in exhibit 9.1.15.
106
Exhibit 9.1.15 : 4th container terminal link
4th container terminal

Link (2010-11)
To
Dronagiri
107
9.1.17 Reduction in vessel unoperational hours
Summary Coverage
Project to be undertaken Reduction in vessel unoperational hours
Need for the project With increase in number of liquid cargo vessels calling at JNPT, the number
of hours lost due to sampling and other operations will increase significantly.
In order to service the vessels, JNPT would need to reduce these hours
from average of 6 hours per vessel to 4 hours per vessel.
Brief description of the project Vessel unoperational hours will need to be reduced from 6 hours to 4 hours
on an average. This can be done by reduction in the sampling time by
providing sampling facilities closer to the jetty. Simultaneously tank farm
owners have to be encouraged to reduce pre and post discharge hours.
Key enablers for the project Securing cooperation of tank farm owners will be an important success
factor for this project. Incentives may have to be provided to tank farms for
the same.
108
9.1.18 Development of Sorting Yard

The 4th container terminal will begin operations in 2010-11 and will have an internal ICD with RTGCs for stacking
containers onto trains for evacuation from the port. With the addition of an internal rail line the handling capacity of the
internal port lines will go up. In 2010-11 there would be a capacity constraint on the railway lines outside the port
leading from the port to Panvel.
Simultaneously the number of mixed trains can expect to go up to 75-80% based on probability with 4 terminals from
earlier levels of 60% with 3 terminals. As average mixed train handling time is substantially more than trains dedicated
to a single terminal, there would be need for a facility to handle mixed trains and meet the needs of the port.
A sorting yard is proposed as seen in exhibit 9.1.16, which is located between SH-54 and adjacent to the current rail
line. This would handle and send dedicated trains to the 4 terminals. The ratio of dedicated to mixed trains with sorting
yard in place will change to 80:20 from ratio of 20:80 without a yard. The sorting yard could also serve as a dry port to
handle SEZ/ CFS operators traffic in the near future.
The yard is proposed to be set up by JNPT. Passing on operations to an independent BOT operator may be considered
once the sorting yard begins operations as a dry port. The sorting yard may also act as a valuable link to the proposed
partnership with container rail freight operators for dedicated services to JNPT from the northern hinterland.
The sorting yard will have 6 intermediate lines and will occupy an area of around 30 hectares. One of the lines will be
used as a engine turnaround line. It will have rail connectivity to and joining the main line from Jasai to Panvel. It will
have 4 reach stackers to load/unload containers as well as 2 dedicated engines.
Incoming trains will be desegregated by terminal of destination by attaching/removing rakes and shunting to different
lines using engines. As far as possible the reach stacker use will be avoided to minimize lift on- lift off costs.
Eventually the desegregation will be such that lines 1-3 send dedicated or minimally mixed trains to NSICT/JNPCT over
the proposed rail line alongside the container road as shown in exhibit 9.1.16. Lines 4- 6 will send dedicated or
minimally mixed trains to GTI and the 4th container terminal. This can be expected once the new rail line begins
operations
The sorting yard will also have brake operators to handle the issue of brake certificates to trains. Suitable pricing would
need to be arrived at to enable SEZ/CFS operators to send their containers by road to this yard to be sent by rail
internally. This would ease the pressure on the roads.
109
Exhibit 9.1.16 : Sorting yard
P
LI RO
N PO
E SE
D
R
AI
L
EX
LI IST
NE IN
G
RA
IL
SORTING
YARD
FUTURE
INTERSECTION
OF RAIL LINES
110
Description of benefits – Exhibit 9.1.17 : Sorting yard investments

The sorting yard will reduce number of mixed trains in the
Equipment Description Costs
port and save handling time increase due to mixed trains.
Mixed trains ratios can be changed substantially from Rail lines 6 lines of around 1 Rs 120 million
80:20 to 20:80 if the yard is utilized efficiently. km each
The creation of this facility would reduce the pressure on (Cost – Rs 20,000
the internal port roads by saving on tractor-trailer traffic. per running metre )
The utilization of this facility by CFS operators and SEZ Reach stackers 4 nos. Rs 46 million
traffic would reduce the pressure on the connecting roads
Buildings Admin Building Rs 14 million
to the port.
Development 12 hectares Rs 156 million
Cost
Calculation of the Investment - 13 million per
hectare
The yard is proposed to be set up by JNPT. JNPT will
need to develop the land and employ approximately 10 Total Rs 356 million
rail operators including a brake certificate man for around
Rs 5 million a year.
Upfront capital costs are estimated at Rs 356 million as
seen in exhibit 9.1.17. These are current capital costs and
would be adjusted for inflation to arrive at 2009-10
investments.
111
For the given project financial coverage is obtained by calculating as well as making suitable assumptions about the
developer’s capital structure. The debt-equity structure of the BOT contractor is taken as 1:1 in line with TAMP
guidelines.
The Developer's cost of debt is estimated by assigning a spread over the zero coupon yield curve for Government
bonds as well as taking into account a repayment period. Here we assume the repayment period as 10 years and
taking the ZCYC curve for 2009 and 2014 as of 11th July 2006 we arrive at the cost of debt for a loan taken in 2009-10.
Here the cost of debt arrived at 9.91% on taking a risk spread of 100 bps over the risk free rate of debt.
Using an equity Beta of 1 we arrive at the Developer's cost of equity. One is the average infrastructure index Beta
between July 2002 and July 2005 in Indian equity markets. Indian market returns over risk free rate have been 6.5%
historically. Using these assumptions the cost of equity is calculated as 16.41%
Cost of capital arrived at for the project is 13.17% for a D/E ratio of 1.
The implementation schedule for this project is contingent on the construction of the 4th container terminal. The
acquisition of the land pre-allocated to PAPs and issue of alternative land is and important requirement of the project.
The period for construction of sorting yard and allied activities would be 15 months. This would need to be operational
by 1st quarter of 2010-11.
112
9.1.19 Increase RMGC Moves per hour
Summary Coverage
Financial source : Port resources
Project to be undertaken Increase RMGCs moves per hour
Need for the project The up gradation of RMQCs carried out in the previous year would lead
to an increase in Capacity. This increase in capacity would require
increase in supporting infrastructure. The capacity assessment model
indicates that the RMGCs would act as a constraint to match the
increase in traffic and capacity.
Brief description of the project The project involves up gradation and replacement of the RMGCs to
enable 18 moves/hour on the RMGCs. This can be achieved by
replacing the RMGCs with new and advanced version. These changes
can be clubbed with the up gradation changes that would be required.
Two RMGCs at JNPCT are on hire since 1995-96 and these can be
replaced by new RMGCs to increase moves/hour
clearances on time
113
9.1.20 New Rail track to port
Summary Coverage
Financial source : Public investment
Details of Project New Rail track to be laid outside the port
Need for the project JNPT will witness significant rise of container cargo in 2013-14 to 8.75 million
TEUs. With the fourth container terminal phase 2 set to begin in 2014-15 , it will
become necessary to have dedicated railway track serving JNPCT / NSICT and
GTI/4th Terminal. The additional railway track will thus help to serve 2 terminals
as well as any traffic that may arise from the SEZ.
Brief description of the project The newly laid track will originate from the sorting yard and run alongside the
port EPZ/FTZ and enter the port next to the container gate. The line will be
extending for a length of 5.6 kms and will be 60 m wide.
Alternatively the existing railway line can also be expanded (given
availability of space for two additional lines) at the current location. This
would avoid the need of any road over bridge over the container road.
Financial costs The laying of the railway line will cost Rs 147 crore in 2014-15 terms assuming a
cost of Rs 20,000 for laying a meter of railway line. The project will be funded by
the Railways with JNPT participation not being envisaged.
A map of the additional line is indicated in exhibit 9.1.18.
114
9.1.20 New Rail track to port
Exhibit 9.1.18 : New rail track to port
PROPOSED
RAILWAY LINE
2014-15
P
LI RO
N PO
E SE
D
R
AI
L
EX
LI IST
NE IN
G
RA
IL
SORTING
YARD
2011-12
115
9.1.21 Dredging
Summary Coverage
Financing Source: JNPT Internal Resources and Debt
Project to be undertaken Dredging to enable fully loaded 6000 TEU ships at all times
Number of vessels to be handled 5734 in 2015-16
Need for the project As the average ship size on the Europe Asia route increases, it would be
found that JNPT would not be able to handle more than 16% of the types
of ships in the Europe Asia route. This could lead to some large shippers
moving to other ports. To avoid this JNPT would need to dredge its
channel to enable ships of upto 6000 TEUs at all times and of upto 7500
TEUs at tidal window. This could be undertaken in two phases.
The second phase of dredging will further deepen the channel to enable a
fully laden 6000 TEU vessel to be serviced at all times.
Technical Description Phase two would involve dredging the channel to a depth of around 14m
from previous 12.5 m to enable fully laden 6000 TEU vessel to arrive at
all times.
116
9.1.21 Dredging
Technical Description z The total area of dredging required in the JNP/MbP region is
estimated at 1775 ha.
z The total length of the channel along which dredging needs to
take place is estimated to be similar to the phase 1 length, which
is 33,525 meters.
Cost The costs for the capital dredging are tentatively forecasted at Rs. 800 -
1000 crores at present value. This is expected to be funded through a mix
of debt and ports internal resources. The estimated cost adjusted for
inflation would be around 1200-1300 Crores
Enablers The success of the project would depend on obtaining the clearances and
attracting larger ships through marketing efforts and other means to
recover the costs of dredging
117
9.1.21 Dredging
After having undertaken this dredging JNPT would Exhibit 9.1.19 : Vessels that can be serviced by JNPT
be able to accommodate 6000 TEU fully laden
vessels at all times. The proportion of vessels that 20014-15
JNPT would be able to handle post the dredging is Percent (Before
provided alongside accommodation Dredging) Post Dredging
Based on this the estimated proportion of Europe < 750 100% 100%
Asia traffic that JNPT would not be able to
750 - 1750 100% 100%
accommodate would be as follows:
1750-3500 100% 100%
3500-5500 71% 100%
5500-8000 25% 20%
8001-13000 0% 30%
* Figures based on discussions with port
Exhibit 9.1.20 : Percentage of Europe Asia Vessels that cannot be accommodated by JNPT post Phase II dredging
2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27
< 750 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
750 - 1750 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
1750-3500 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
3500-5500 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
5500-8000 8.31% 8.40% 8.48% 8.57% 8.65% 8.74% 8.83% 8.91% 9.00% 9.09% 9.18% 9.28%
8001-13000 0.92% 0.91% 0.91% 0.91% 0.91% 0.91% 0.91% 0.91% 0.91% 0.90% 0.90% 0.90%
Total 9.23% 9.31% 9.40% 9.48% 9.56% 9.65% 9.73% 9.82% 9.91% 10.00% 10.09% 10.18%
118
9.1.21 Increase RMGC Capacity
Summary Coverage
Project to be undertaken Increase RMGCs on tracks
TEUs to be Handled at JNPT 3.2 Mn TEUs – Rail in 2016-17
8.8 Mn TEUs – Road in 2016-17
Need for the project An additional rail tracks would be laid in 2014-15 to JNPT. This would
increase the number of trains that can arrive at JNPT to 36 and would be
able to match the increase in traffic. This will have to be matched with an
increase in train handling capacity within the port. The current number of
internal tracks would be enough to match the increase in capacity,
however, additional RMGCs would be required. The terminals would
therefore need to buy additional RMGCs. The total number of additional
RMGCs required would be 2-3 in number. It is expected that these
additions would be made at JNPCT, GTI and the fourth terminal
Technical Description The project would involve entail acquisition of additional RMGC at
terminals. The increase in RMGCs would reduce turn around times and
would therefore be able to match the increase in capacity required due
to increase in traffic.
clearances on time
Costs (JNPCT) 1 X RMGC: 43 Crores in 2016-17

Expected Capacity Addition The addition of an RMGC would increase the train handling capacity by
0.2 Mn TEUs.
119
9.1.23 Road to be constructed to connect the Aamra Marg link road to the port
Summary Coverage
Year 2017-18
TEUs to be Handled 3.6 Mn TEUs – Rail
9.7 Mn TEUs – Road
Areas and extent of shortfall Road capacity for approach roads to port is less than the required
capacity and needs to be increased.
Project to be undertaken Road to be constructed to connect the Aamra Marg link road to the port
Need for the project JNPT would face increasing pressure to upgrade its road infrastructure
due to increase in traffic from the port. While the port has a number of
port linking road the capacity is limited by the approach roads. As can be
seen in exhibit 9.1.21, the number of port approach lanes (shown in
Green stripes) is lesser than the number of port linking lanes (in pink)
Technical Description An additional port road should be connected between the port and the
2nd link road this would enable the port to meet its capacity
requirements. Map is indicated in exhibit 9.1.21.
The road is expected to be 60m wide and would be 3.095 Km long. It is
proposed to be a four lane divided road.
clearances on time
Distance The road is expected to be 3.095 Km and of divided 4 lanes.
Cost The expected cost for the project would be 4.76 Crore / Km and on this
basis the expected cost of the project is 14.75 Crores.
120
n ta
ha
2ND LINK TO JNPT
ep
El
SH54
4 Lane
From 4th Terminal 4 Lane

4 Lane EPZ
4 Lane
6Lane
6Lane
4 Lane
To Khopta Bridge
Exhibit 9.1.21 : Capacity
mismatch in port roads
121
n ta
ha
2ND LINK TO JNPT
ep
El
Proposed
connection to
link road
SH54
From 4th Terminal

EPZ
To Khopta Bridge
Exhibit 9.1.22 : Proposed
connection to Link road
122
9.1 Planned client related investments
9.1.24 Emergency Berth

JNPT has no emergency berth this can lead to downtimes of commercial berth and also congestion in the channel.
It is estimated that the downtime caused due to emergency berthing could be by upto 4 ships per year *. This will
impact the revenues that would be earned from those berths for that period. Apart from this an emergency berth will
also help ships which need to move between berths and have to exit the channel due to unavailability of the second
berth. Downtimes of commercial berth in an emergency situation could be upto 4 days.
The project would entail building an emergency berth along with the first phase of the marine chemical terminal in
2011-12. This berth would cater to emergency, minor repairs and also ships requiring interim berthing for movement
between berths
The berth would be 330 m long and just 10 m wide. It will purely be an emergency berth and would be located
alongside the approach road. Approach to the berth would be only by port craft.
The location of the berth has to be as close to the middle of the JNPT channel so as to minimize time to tug the ship
to a stable location. At the same time the location of Elephanta limits the available places to locate the berth. A
technical study to determine the berthing location would need to be carried out..
The berth is expected to be put in place in 2010-11 in line with the completion of construction activity for 4th
container terminal 1st phase
A possible location for the berth is shown in exhibit 9.1.23
Key enabler for the project
The success of the project would depend on obtaining the requisite environmental clearance for the same. In the
absence of such a clearance another emergency facility in the form of emergency anchorage would need to be
created.
* - Discussions with marine department
123
Exhibit 9.1.23: NHAVA

Emergency Berth
Butcher Elephanta
Island
nnel
JNP Cha
SHEVA
EMERGENCY
BERTH (located
adjacent to
Marine chemical
berth set up in
2011-12)
Uran Mud
Flat
124
Forecast of additional traffic –

The objective behind the berth is to service ships that need to be berthed immediately. Hence traffic is not the
primary motivator of the berth.
It is expected that conservatively 4 ships per year can expect to have emergency berthing requirements in the
Mumbai harbour. Currently such requests for berthing are being turned down by both MbPT and JNPT in the
absence of berths.
Investment details –
The investments consists of Rs 165 million for construction of a 330 m by 10 m jetty in present value terms. The
berth is expected to be put in place in 2011-12 in line with the completion of construction activity for 4th container
terminal 1st phase and costs after factoring in inflation are Rs 21 cr.
Calculation of revenue -
The emergency berth has not been created from revenue purposes. It is purely there from a motive of enhancing
safety and security at the port as defined in the vision. The same gains importance in light of substantial increase in
traffic at the port.
Probable revenues that might arise for the emergency berth are from the following sources -
• Emergency berth revenues – These ships will pay a minimum of current ship berth day charges, These are currently
Rs 0.55 million (approx) per day and are likely to go down following the decrease in tariffs effective from Dec 2006.
• Repair service revenues – These are estimated at 15% of ship berthing charges
• Revenue from loss of regular window – This consists of cargo handling charges and berth hire charges. Cargo
handling charges currently based on JNPCT figures for 2005-06 are Rs 9.8 million per day with marine charges
being Rs 0.55 million per day. These probable revenues are likely to go down following the decline in tariffs at JNPT
effective from Dec 2006.
• Revenue from the shifting of berths - This happens when ships have finished loading/ unloading operations at a
container terminal and have to visit the next container berth at JNPT as well. This is assumed at 15% of the berth
hire charges for 4 ships a year.
Given the highly probabilistic nature of these revenues , they have not been included in financial models of the port.
This is in line with the conservative approach adopted in preparation of financials.
125
For the given project financial coverage is obtained by assuming financing of the project by JNPTs internal reserves.
This is because the infrastructure being created is common user and security oriented.
The cost of debt is estimated by assigning a spread over the zero coupon yield curve for Government bonds as well as
taking into account a repayment period. Here we assume the repayment period as 10 years and taking the ZCYC
curve for 2010 and 2015 as of 11th July 2006 we arrive at the cost of debt for a loan taken in 2010-11. Here the cost of
debt arrived at 8.32% i.e. the risk free rate of debt for a loan in 2010-11 which is also equal to the opportunity cost of
JNPTs cost of capital.
The implementation schedule for this project is contingent on the construction of the 1st marine berth with the
associated relocation of BPCL jetty. The period for jetty construction and allied activities would be 12 months.
A detailed feasibility study would need to be carried out for the location of this emergency berth considering
the profile of cargo at JNPT and navigational safeguards.
126
Chapter 10
Planned organisational
improvements
127
10.1 Planned organizational improvements
10.1.1 Strengthening of marketing team

JNPT is currently the dominant container handling facility in the country. However with major ports as well as smaller
private ports setting up container handling terminals there is increasing competition. There wiill increasingly be several
options available to the exporter/importer to send his cargo. As competition comes in JNPT will need to provide its
customers especially those from its northern hinterland a strong value proposition for continuing to send their cargo to
JNPT.
The marketing team will attempt to communicate the strong value proposition as well as competitive advantages of
JNPT over other ports to current/potential customers. This will be significantly different from its current function as a
public relation centre.
JNPT's marketing team will strive toward efficient customer management and developing a competitive advantage of
JNPT over other ports. The role of the marketing team will be centered around the following four aspects
z Customers
z Price
z Promotion
z Competition
Customers: The marketing team would be divided into several key account managers. Each account manager would
be responsible for 2-3 customers and would aim at maximizing revenues from the customers as well as for resolving
any customer related query.
Price: The marketing team would constantly study the competitors and would play a role in developing pricing
strategies for the port. These strategies would revolve around volume discounts, growth discounts as well as route
discounts.
Promotion: The marketing team would regularly showcase capabilities of JNPT in port and logistics to customers to
attract new customers and retain strategic customers.
Competition: The marketing would regularly study the environment to develop reports on competitor plans as well as
future scenarios. These would be provided to various departments of the port for appropriate action. The team would
also be responsible for identifying future opportunities. These can arise from specific routes, specific industry or specific
customers. The marketing team would then develop strategies to exploit the opportunity for the port, these would be
passed to the senior management for review.
128
10.1.1 Strengthening of marketing department
JNPT currently does not have a full fledged marketing Exhibit 10.1.2 : Marketing team –
section. It is a support section under the administration
department and handles public relations and marketing Annual cost of implementation
activities. It has just one managerial personnel looking Name Nos. Cost (in Rs)
after public relation activities along with 5 administrative
staff . We propose a revised structure with additional
hiring of 3 additional marketing professionals so as to Marketing Rs 20,00,000 per
effectively handle major roles of account management, Budget annum
price negotiation and promotional activities. They will Head of Team 1 Rs 20000 per
report to the head of marketing team who will oversee month
the marketing activities of the port. Besides these an
analyst could be employed to follow customer revenue 3 account 3 Rs 14500 per
managers month
and profitability trends. The marketing team could
continue to operate as a cell under the administration
department. Team structure is shown in exhibit 10.1.1. Analyst 1 Rs 10750 per
month
Description of Benefits
Currently, in the Indian ports sector capacity is far lesser Cost of implementation
than demand resulting in limited focus on marketing and The implementation cost for the marketing team
sales activities. However this has changed with private includes the revamped budget for the cell as well as
ports like Mundra and Pipavav having active marketing the cost of hiring of personnel and their monthly
departments going all out to woo customers through salaries. Monthly salaries will be in line with JNPT
exercises such as presentations, meetings etc with managerial salary levels discussed in the inception
various shipping lines to increase their traffic. report. Costs are shown in exhibit 10.1.2.
In light of that JNPT needs to strengthen its marketing
team. In the medium to long term, marketing and sales Exhibit 10.1.1 : Structure of the Marketing cell.
can be expected to play a significant role in retaining Head of Cell
and acquiring new customers (shipping lines, agents
and other port users, CFS etc) at JNPT. Marketing and
sales will thus help in customer retention, customer
Account Managers Public Relations officer
management as well as communication of the port’s
competitive advantages.
Analyst Admin Staff
129
10.1.1 Strengthening of marketing department
Financial Coverage
For the given project financial coverage is obtained by assuming financing of the project by JNPT's internal reserves.
Here the cost of debt arrived at 9.00% i.e. the opportunity cost of JNPT's capital.
Implementation schedule
The implementation schedule for this project can be expected to be 6 months and should be operational by 1st quarter
2008-09.
130
10.1 Planned organizational investments
10.1.2 Automation at the gates
Year of Completion – 2009-10
The 4th container terminal is planned to begin operations in 2010-11, the checking time at gates will prove to be a
constraint and to fasten the checking time at the gates it will be necessary to look beyond constructing additional
gates and deploying security personnel.
It is proposed to set up an automation solution to reduce checking time at gates to less than a minute per truck at all
times. This can be done through setting up an automation solution between the various operators, gates and the
CFS operators. This solution would need to be set up and maintained by JNPT on its databases to facilitate fastest
turnaround time for trucks. This would need to be in place by 2009-10 in advance of the 4th container terminal
The automation project essentially involves the design of an web-base portal connected to a high speed ORACLE
database that is accessible by CFS operators and JNPT. Such an IT implementation would need purchase of a
database software, installation of servers and around 9 person months of effort across the entire software
development lifecycle.
The application is proposed to consist of document management software along with a workflow based application
residing on top of it. The trucks can obtain clearances from gates and the terminals before leaving the CFS.
This application can be further integrated with the customs network to obtain clearance from customs also over the
net. Such an application can also be used as an effective communication channel between the CFSs and the
terminal operators for shipping information, container information, container loading plans etc.
Such a process over the long term would enable the terminal operators provide window clearance for trucks arriving
for particular vessels and would enable smooth operations.
Process
On departure of a container truck from JNPT details of the truck such as destination, quantity, goods etc could be
updated into the system which could be checked at the gate before the truck arrives. The CFS operators and
customs could be able to access the system and thus reduce any duplication of information collection. This would
allow significant reduction in dwell times at the CFS operator.
For containers entering JNPT, the reverse procedure would be followed with the customs sharing their information
on the JNPT web based network which would allow automated flow of trucks through the gates without manual
intervention. Hence, regular incidences of congestion at the gates would be reduced.
131
10.1.2 Automation at the gates
Description of benefits Exhibit 10.1.3 : Automation investments for gates

The automation and related processes will reduce
Equipment Description Costs
congestion on the gates and will ensure tighter controls
and smoother operations. ORACLE database RDBMS database 50 lakhs
Oracle 10
Cost of implementation
The investment costs comprise of the cost of database
and implementation, development of software,
connectivity and server charges. Servers 2 nos. 20 Lakhs
The total cost of implementation is expected to be Person months 9 months (Rate – Rs 49.5 lakhs
around Rs 1.21 Crores as seen in exhibit 10.1.3. 20 USD per hour)
Financial Coverage Connectivity 2 MBPS VPN 150000/year
Charges
For the given project financial coverage is obtained by
assuming financing of the project by JNPT's internal Total 1.21 Crores
reserves. This is because the infrastructure being
created is common user based.
Here the cost of debt taken at 9.00% which is equal to
the opportunity cost of JNPT's capital.
The implementation schedule for this project can be
expected to be 6-9 months and should be operational by
1st quarter 2009-10.
Other Automation requirements –

Given the expected rise in traffic to over 11 million TEUs from current level of 2.7 million TEUs there would be
significant automation requirements. These include automation between quay/yard and customs as well as
other parties. There is already a pan-major port initiative PORTNET that is currently being established to take
care of automation to external agencies. Keeping this in mind this report focuses on the most significant port
automation requirement between port and CFS
132
10.1.3 Training for double moves

In 2011-12 with replacement of equipment and setting up of new terminal it is expected that the twin move ratio will
become 10% from less than 5% currently. In such a scenario it will be necessary to train the operators in carrying
out twin move operations. This can be done by hiring training personnel. This may require training of 10 days a
year.
Currently no twin moves are being carried out at JNPCT. All twin moves operations are being carried out at NSICT.
With JNPCT set to acquire new cranes with twin lift capability, it would require training for its personnel.
Similarly as JNPT moves towards being a world class port it may be necessary to regularly train management
personnel in global best practices. To this end it is recommended that they have training by international personnel
for a period of 5 days a year.
These training can start from 2010-11 and continue periodically as and when the need arises.
The benefits to the project are ability to move to twin moves per hour that raises the total throughput of the port by
which in 2011-12 will translate to around 0.7 million TEUs.
The benefits to management are the creation of a leadership team that is well exposed to world class port practices.
Other training requirements –

Given the expected rise in traffic to over 11 million TEUs from current level of 2.7 million TEUs there would be
significant requirement of training efforts for personnel. Costs incurred due to double move as well as other
training required to handle additional traffic have been treated as regular operational costs and not as
investments. Double move training here has been included only to highlight its importance as an organizational
improvement.
133
10.1.3 Training for double moves
Cost of implementation - Exhibit 10.1.4 : Training costs per year

The costs of implementation are basically the cost
Name Description Costs
of time of the personnel at the port and cost of
hiring the trainer as seen in exhibit 10.1.4. Twin move training Trainer cost Rs 5 lakhs trainer
for 10 days cost
Training would have to be scheduled in shifts to Cost of time of 200
allow for port operational activities to be QC operators, Rs 6.5 lakhs cost
unhindered. checkers etc of time
Total cost Rs 11.5 lakhs
Financial Coverage – Management Trainer cost Rs 5 lakhs trainer

training for 5 days cost
For the given project financial coverage is Cost of time of 260
obtained by assuming financing of the project by managerial staff Rs 7 lakhs cost of
JNPT's internal reserves. This is because the time
infrastructure being created is for the terminal’s Total cost Rs 12 lakhs
benefit.
Here the cost of debt taken at 9.00% which is
equal to the opportunity cost of JNPT's capital.
134
10.1.4 Automation at the sorting yard
Year of Completion – 2013-14

The 4th container terminal is planned to begin operations in 2010-11, the number of mixed trains would go up and can
lead to congestion within the port. This can be tackled by reducing the turnaround times for mixed trains by designing
and automating processes.
It is proposed to set up an automation solution which would integrate all terminal operators and CONCOR. CONCOR
can update plans for the arrival and departure of trains based on which each operator can be provided with container
loading/unloading plans. If a terminal operator fails to abide by the time limits adequate penalties can be levied. This
would ensure smooth operation of the mixed train.
The sorting yard also provides an opportunity to further streamline the process. The sorting yard would be integrated
with the terminal operators and CONCOR and can serve the following purposes
• Develop container loading and unloading plans based on CONCOR data and inform terminals of the same
• Act as a buffer to hold the trains in case of lack of information regarding the trains return
• Provide regular updates to terminals on the arrival plans of various train and can act as holding yard for trains to
match with terminal operator requirement.
The automation project essentially involves the design of an web-base portal connected to a high speed ORACLE
database that is accessible by CFS operators and JNPT. Such an IT implementation would need purchase of a
database software, installation of servers and around 18 person months of effort, across the entire software
development lifecycle, to develop a customized solution for container loading plans, information flow etc
The application is proposed to consist of document management software along with a workflow based application
residing on top of it. This will enable tracking and sharing of information across the identified users.
The terminal operators can plan their loading and unloading operations in a smoother manner and can plan their
operations accordingly.
135
10.1.4 Automation at the sorting yard
Exhibit 10.1.5 : Automation investments for sorting
The automation and related processes will reduce the yard
turn around times of trains, this will help in increasing
train capacity at JNPT. This is critical as JNPT faces Equipment Description Costs
train capacity pressures 2010-11onwards due to the ORACLE database RDBMS database 50 lakhs
increase in terminals and traffic Oracle 10
An automation system and related processes will enable
JNPT to service the increase in container traffic that is
expected Servers 2 nos. 20 Lakhs
Cost of implementation Person months 18 months (Rate – Rs 99 lakhs

20 USD per hour)
The investment costs comprise of the cost of database
and implementation, development of software, Connectivity 2 MBPS VPN 150000/year
connectivity and server charges. The total cost of Charges
implementation is expected to be around 1.8 crores as Total 1.8 Crores
seen in exhibit 10.1.5.
Financial Coverage
For the given project financial coverage is obtained by
assuming financing of the project by JNPT's internal
reserves. This is because the infrastructure being
created is common user based.
Here the cost of debt taken at 9.00% which is equal to
the opportunity cost of JNPT's capital.
The implementation schedule for this project can be
expected to be 6-9 months.
136
10.1.5 Maintenance Service Level agreement (SLA) between the port and road authorities

Project: Maintenance Service level agreement (SLA) between the port and road authorities.
General Description and Motivation
JNPT is expected to witness an increase in traffic and would face road capacity pressures in the future., These
capacity requirements have been fulfilled by undertaking various road related projects such as development of
additional linkages, six laning of existing roads etc.
However, maintenance is as important as capacity addition. Absence of maintenance on roads leading to the port has
led to decrease in capacity of the roads. Continuance of such problems could lead to congestion, and in the worse
case, loss of traffic. Therefore JNPT needs to take steps towards increasing maintenance on port link and approach
roads.
Exhibits 10.1.6 show the condition of port approach roads and the need for maintenance can be easily observed.
JNPT should endeavor to improve connectivity to the port through:
z investing in SPVs for road development (already being practiced)
z Development of SLAs with the road authorities
JNPT could develop an SLA with the road development authorities that stipulate operating parameters for
maintenance of roads. This would include aspects such as
z Downtime of roads
z Time for clearing roads
z Time for repairing roads
This SLA should be carefully monitored and can be linked to JNPT's stake in SPVs made along with road authorities.
Benefits of Project
The benefit of such a product would be to improve efficiency of roads as well as an augmentation of capacity at
current roads.
137
Exhibit 10.1.6 Condition of Roads near JNPT
138
10.1.6 Strengthening of project management capability

JNPT is set to undertake massive expansion activities over the next 5-7 years. There will be several projects
undertaken by the port that will be executed in parallel and would require the complete involvement of the port. Even
thought most of these projects will be undertaken through the Build operate transfer (BOT) route, they would require the
port to set up some initial facilities. In this background it becomes essential that the port’s capabilities of project
management are strengthened.
It is recommended that the project management group be strengthened in two ways -
• By improving capabilities of current personnel
• By hiring personnel with requisite project management experience
It is also important that government delegates greater powers for decision making on projects to be undertaken as
part of business plan to the port. This will allow improvement in timelines for execution of projects.
The project management group would typically consist of cross functional teams from several departments.
Departments especially involved would be the port planning and development as well as the finance department.
The role would require capabilities/skills in the following areas -
• Capabilities in structuring of projects
• Capabilities in overseeing projects and project management consultants
• Ensuring adherence to project timelines by various parties (consultant/contractors/etc)
• Liasioning with ministry officials for project clearances
• Capabilities in selection of developer
• Capabilities in evaluation of BOT contracts
The extent of hiring and qualifications of personnel would require a detailed study. It is recommended that there be
a detailed study of staffing and skill requirements in light of the massive expansion activities planned at the port. It is
also imperative that a study be carried out on greater delegation of powers to approve and sanction projects be
given to the port to enable them to carry out this detailed business plan.
139
Chapter 11
Land use plan
140
11.0 Land use plan
11.1 Land use distribution
JNPT has a land area of 2584 ha. Of this only 606 ha are Exhibit 11.1.2 : Proposed Land use Distribution for Land
at JNPT
developed with the remaining land of 1978 ha unutilized
and available for development. Exhibit 11.1.1 highlights Sl. Land use Area (in Ha)
current usage of port land. Any development of land has No
to take into cognizance environmental regulations
pertaining to coastal zones. In this regard JNPT has A Developable:
submitted a Coastal Zone Management Plan to the 1 Residential 162
Ministry of Environment and Forests in the month of June
2005. 2 Port operational 670
Activities
The unutilized land has been divided into two major zones
3 Commercial 45.64
a) Coastal zone b) Land use zone
4 Social facilities 2.07
z The coastal regulation zone of 778 ha (further
divided into CRZ-1 and CRZ-2 along the sea coast 5 Open space 3.57
area). Major activities proposed in this zone are 6 Public utilities 61
− Eco park 7 Road network 206
− Nature park 8 Rail network 50
− Mangrove forest Total Developable Area 1200
− Water bodies B Non-Developable
z The land use zone of 1200 ha Area:
JNPT thus has 1200 ha of developable land demarcation 1 Mangrove & Nature 713.5
park
of which into various zones (seven in all) has been carried
out as per CIDCO land report. The port’s proposed land 2 Tree Belt 41
distribution has been highlighted in exhibit 11.1.2
3 Channels 23.50
Total Non Developable 778
area
Total Gross Area 1978
Source: Final Draft Report on Reserve Price fixation for 1200 ha
land at JNPT – CIDCO, May 2006
141
Back
Terminals
up Areas Exhibit 11.1.1 : Current land usage of port area
JNPT
Back up
Township
Areas
Railway Lines
and RMGCs
Tank farm area
Currently utilized land

areas (areas in white with JNPT CFS
diagonal patterns)
Non-developable area Jashkar and

with mangroves etc Karal villages
JNPT
All coloured land indicates
Township
developable land
142
11.0 Land use plan
11.2 Proposed land usage for 1200 ha of land
Land use Zones( indicated in map overleaf) z A detailed breakdown of the proposed land distribution
for 1200 ha of developable land is shown in exhibit
z Zone 1: Proposed on the left of SH-54 and on the
11.2.1 . Exhibit 11.2.2 differentiates between land zones
southern side of the port area, This zone is proposed for
for operational and other activities as part of the CIDCO
port operational activities.
land plan.
z Zone 2: Proposed for port operational activities situated
on the eastern side of the existing JNPT rail link
connecting the container terminals.
z Zone 3 & 4: These zones are proposed for rehabilitation
for project affected people of JNPT and situated on the
south east side of JNPT. This zone consists of two
villages Ektaghar and Ranjanpada.
z Zone 5: This is the zone lying west of the existing JNPT
railway line and the only road from Karal phata to
container terminals. The zone has nature park on the
north side, JNPT township on the south side and the
Dronagiri area on the western side of it. The zone is
proposed for port operational activities.
z Zone 6: This is the smallest zone proposed at Karal
junction and adjacent to Jaskhar village and primarily
proposed for amenities and social facilities for township
or port users.
z Zone 7: This is the zone proposed at northern side of
balance developable area of JNPT and adjacent to the
hilly area and custom area near the JNPT
administrative building. The activities that are proposed
in this zone are port operational activities.
143
Exhibit 11.2.1 : Land Use Zones for 1200 ha of
developable land
Port operational zones – 1,2,5 & 7

Residential zone – 3 & 4
Amenities and social facilities – 6
144
11.0 Land use plan
11.2 Proposed land usage for 1200 ha of land
Exhibit 11.2..2 : Differentiation of zones for developable land in port
INAL
RM
TE
. 5th
OP
PR
TO
K
LIN
Y
RL
D
SE
PO
P RO
Marine Park
LIN
K TO
4th
TE RM
IN AL
Public Utilities TO
BE
D IS
CO
NN
EC
TE
D
Operational Activities
ha
4
N LINE
20
4 .5
8 .9
UR URA
7h
a
.BE LAP
12.5%
ha T LIN
E
4
P ROP
.9 J NP
40
ha
5
.1
Nature Park
62
4B
NH
ha
Public Utilities
22
1 6.
D
YAR
NG
SH ALI
MAR
CH
AN
BR
AN
L- UR P ROP OSED
N VE
Y PA T RUCK T ER MINUS
AILWA
AL R
TR
C EN
P UNJAB
Commercial
WAREHO USING CONWARE
CENTRAL WA REHOUSING
CORP ORA TION
Operational Activities
S EC TOR 4
Residential 12.5 %
S EC TOR 14
Operational
S ECTOR 6
activities
Commercial
MSEB
S EC TOR 7
Social Facility
Open Spaces
Public Utilities
Proposed Road Network at J N P T

S ECTOR 9
S EC TOR 8
CIDCO LTD.
145
11.0 Land use plan
11.3 Proposed usage for port operational areas
KPMG identified opportunities for usage of 670 ha of port operational land at various points in time. Land divisions and
facilities for non-operational zones had been identified earlier. KPMG has thus focused on identifying usage
requirements within port operational zone of 670 ha.
Exhibit 11.3.1 highlights proposed usage for port operational land by KPMG as part of business plan exercise for the
plan period till 2015-16. Exhibit 11.3.2 highlights JNPT land usage taking into account current and proposed usage post
the 7 year plan period.
Need for Parking space
Post the development of land for operational activities , there will be 124 ha of land available in port operational
boundaries. An identification technical study for parking in the port will be needed to ensure that congestion does not
occur due to the planned developments. This study should be carried out once GTI enters stable operational phase and
should look towards identifying parking for current and future developments.
Need for Periodic review of land use plan
It is important to carry out a periodic review of land use in the port in light of changing competitive scenario. New
developments that pan out over the next few years may result in the need for certain projects or for a review of existing
projects.
146
Exhibit 11.3.1 :Proposed land
Empty yard 28
Hectares
usage for port operational areas
(2015-16)
(2015-16)
32 Hectares of CFS EPZ (2009-10)

land (2007-08) 200 Hectares
Empty yard 50
hectares (2008-09)
CFS 49 Hectares
(2015-16)
Land Available 670 Hectares
Used for CFS 137 Hectares
Used for Empties 118 Hectares
Used for EPZ 200 Hectares
Total used 455 Hectares 40 Hectares Empty

yard
Common User & 91 Hectares
(2012-13)
Other Infra @ 20%
Available Land 124 Hectares *
* This land can be used for EPZ/FTZ

expansion, Ro-Ro yard and activities such as 56 Hectares CFS
parking etc that the port may require. (2012-13)
Not to scale
147
Exhibit 11.3.2 :Land usage at end
Empty yard 10 of plan period (2015-16)
Hectares
Empty land
Empty land
remaining of port
from port Land Available 670 Hectares 70200
Hectares
hectares
of CFS
of
operational area
operational area EPZ/FTZ
land land Empty yard of 108
(124 ha) hectares
Already developed/ present
Used for CFS 137 Hectares
Used for Empties 118 Hectares
Used for EPZ 200 Hectares New developments in plan period
Tank farm area

Total used 455 Hectares
14 Hectares of CFS
land 162 ha of PAP land
Common User & Other Infra 91 Hectares
@ 20% (non port operational
area)
Port operational land
usage suggested over
plan Available
period Land 124 Hectares * JNPT CFS
Non operational land
for PAP resettlement
* This land can be used forEPZ/FTZexpansion, Ro-Ro yard
Existing land use
and activities such as parking etc that the port may require.
Jashkar and
53 Hectares of CFS Karal villages
land
70 Hectares of CFS
land
JNPT
township
148
Chapter 12
Plan of Action
149
12.1 Plan of Action to Implement Strategy
The strategy arrived upon needs to be converted into set of actionable steps to allow the port to achieve its vision.
Keeping this in mind an action plan for 7 year plan period from 2007-08 to 2014-15 has been prepared. The action
plan attempts to cover the set of projects/ initiatives to be undertaken by the port in the plan period across the
following areas -
• Development of new infrastructure
• Efficiency improvement
• Organizational improvements
• Development of new infrastructure – This details projects resulting in additional infrastructure creation at the
port such as terminals to augment capacity, logistics related facilities , road networks to improve connectivity
• Efficiency improvement – This details initiatives resulting in improvement of process efficiency at the port such
as automation, increase in crane productivity
• Organizational improvements – This details initiatives designed to restructure/ strengthen organizational
performance such as creation of a dedicated marketing cell. training initiatives etc
The overall action plan identifies the various projects that need to be undertaken to implement the strategy of port
and provides guidelines on various aspects of implementation. The major aspects covered in the action plan consists
of the following -
z Time Lines: This is one of the most critical aspects that a plan of action should contain. It provides an estimate of the
time within which an action has to be completed to ensure that the overall development goal is achieved.
z Dependencies: In achieving the goal for a port it is important to realize that there would be interdependencies
between projects. As an example development of a terminal would be fruitless if connectivity is not improved.
Therefore it is paramount that a plan of action identifies and highlights dependencies that exist. This also enables the
planning departments of port authorities to identify areas that need to be addressed to ensure that the development is
within the planned time frame.
150
z Critical success factors: This is an aspect that highlights key elements that have to be addressed to ensure
success of the strategies. It consists of factors which are within/beyond the control of the port and helps in identifying
areas that need to developed but are not within the control of the port. These factors can have a significant impact on
the success of a strategy
This section deals with the overall implementation schedule of the 7 year plan along with critical dependencies
between projects. Individual project success factors are highlighted in individual action plans outlined in Section 3. It
is important to note that the implementation schedule for the 7 year plan indicates timeline for actual execution of the
project i.e. from conceptualization to beginning of commercial operations. On the other hand the individual project
action plans in Section 3, are written from JNPT’s perspective. Hence the time frame indicated are highlighted as
JNPT’s timeline of involvement with the project. Hence for certain client investments the time frame in the individual
action plan may appear to be lesser than that indicated in the investment schedule. This is because construction time
periods for such projects would fall outside the purview of JNPT’s active involvement.
Apart from this the plan of action also considered the support infrastructure that would be required outside the port to
support the ports development plans.
151
Goals Action Steps Critical Success Factors

Achievement of 10Mn z Development of 330m of berth z Clearances etc specially for projects that
TEUs of traffic at JNPT are planned in the near future are obtained
z Development of 4th Terminal Phase 1
in an expedited manner
z Development of 4th terminal Phase 2
z Development of road and Rail (DFC)
z Development of MCT connectivity to JNPT from western and
northern regions
z Development of port user road, EPZ
road, Bund Road and other approach z Planned development aligned to capacity
roads projections and terminal development
Improve efficiency across z Improve efficiency of current infra z Obtaining clearances
the port (increase moves/hour) through up
z Analyzing and upgrading equipment at
gradation
regular intervals to ensure optimum
z Implement IT systems at Gates and at performance
CFSs to ensure smooth and speedy
z Discussions with various tank farm owners
flow of traffic
which currently have own pipelines to
z Pipelines etc to improve discharge rate arrive at mutual agreement on pipeline
of ships development, rates etc
z IT infrastructure improvement and z Efficient change management to ensure
training of personnel to improve benefits of IT infrastructure
efficiency
To develop logistics z Create CFS, FTZ etc in the port area z Clearances
capabilities and services at
z Create SPV to invest in road z Connectivity and capacity of major
JNPT
development near port such as (Aamra highways
link road etc)
152
Action 12.1.1 Implementation schedule for infrastructure creation
Plan
Exhibit 12.1.1 : Overall implementation schedule for infrastructure creation projects
Capacity
Creation
Infrastucture Creation project Apr-Sep 2007 Oct-Mar 2008 Apr-Sep 2008 Oct-Mar 2009 Apr-Sep 2009 Oct-Mar 2010 Apr-Sep 2010 Oct-Mar 2011
32 hectares of CFS
Efficiency Common user pipelines

improvement
330 m extension
Grade separators
Org
Improvements 50 Hectares of empty yards
Free trade zone
Additional link road via Belpada
Additional evacuation road
Dredging first phase
Dronagiri Link road
Fourth terminal phase 1
Road linking port and highway
Link to 4th container terminal
Six laning NH4b
Dependencies Timeline Projects already under implementation
153
12.1.1 Implementation schedule for infrastructure creation
Exhibit 12.1.1 : Overall implementation schedule for infrastructure creation projects (contd.)
Infrastucture Creation project Apr-Sep 2008 Oct-Mar 2009 Apr-Sep 2009 Oct-Mar 2010 Apr-Sep 2010 Oct-Mar 2011 Apr-Sep 2011 Oct-Mar 2012 Apr-Sep 2012 Oct-Mar 2013 Apr- Sep 2013 Oct-Mar 2014
Creation of emergency berth
Marine chemical terminal berth
40 hectares of empty yards
56 hectares of CFS
Rail track outside JNPT
Fourth terminal phase 2
As can be seen dependencies have been highlighted to emphasize the need of an integrated approach
towards capacity development at the port.
Action
Plan
• Dependencies with Free Trade Zone: Development of the free trade zone in the port area would lead to
increase in traffic within the port and an evacuation mechanism for the same should be in place at the time the
Capacity FTZ starts operation. To ensure that the dependency between the FTZ and the additional evacuation road as
Creation well as the link road to belpada has been highlighted. This would ensure that the additional traffic created has
an evacuation mechanism (through belpada)
Efficiency
improvement • Dependencies for 4th Terminal Phase 1: The phase one of the 4th terminal would add around 1000m of quay
length to the port. This would lead to increase in traffic at the port and an efficient evacuation for the same
would be required. This can be achieved through development of the dronogiri link road and the 4th terminal
Org approach road before the terminal starts operation. This has also been highlighted in the plan of action
Improvements
154
12.1.1 Implementation schedule for infrastructure creation
• Dependencies for 4th Terminal Phase 2: The phase two of the 4th terminal would add around 1000m of quay length
to the port. This would lead to increase in traffic at the port and an efficient evacuation for the same would be
required. Apart from the road capacity increase required this would also require additional railway capacity. This can
be achieved through development of additional railway line as well as through improving efficiency of rail and road
transport (these projects have also been identified as part of the plan of action)
155
12.2.1 Implementation schedule for process improvement
Action
Plan Exhibit 12.2.1 :Overall implementation schedule for process improvement projects
Capacity Process improvement Apr-Sep 2007 Oct-Mar 2008 Apr-Sep 2008 Oct-Mar 2009 Apr-Sep 2009 Oct-Mar 2010
Creation
Increasing shallow berth moves to 16
per hr
Efficiency
improvement Increase RMQC moves to 24 per hour
Automation between gate and terminal

Org operators
Improvements
Process improvement Apr-Sep 2010 Oct-Mar 2011 Apr-Sep 2011 Oct-Mar 2012 Apr-Sep 2012 Oct-Mar 2013
Increase RMGC moves to 20 per hour
Automation between sorting yard and

port operators
156
12.3.1 Implementation schedule for organizational improvement
Action Exhibit 12.3.1 : Overall implementation schedule for organizational improvement initiatives
Plan
Organizational improvement Apr-Sep 2007 Oct-Mar 2008 Apr-Sep 2008 Oct-Mar 2009 Apr-Sep 2009 Oct-Mar 2010
Capacity Strengthening of marketing dept.

Creation
Strengthening of project mgmt.
capabilities
Efficiency
improvement
Org
Improvements
Organizational improvement Apr-Sep 2010 Oct-Mar 2011 Apr-Sep 2011 Oct-Mar 2012 Apr-Sep 2012 Oct-Mar 2013 Apr- Sep 2013 Oct-Mar 2014 Apr- Sep 2014
Training for double moves
Training for managerial staff
Development of Maintanence SLAs
Continuous efforts Timeline Projects already under implementation
157
Chapter 13
Financial Plan
158
13.0 Introduction to Financial aspects
KPMG has developed the financials for JNPT through a systematic approach and has considered various sources of
revenue, cost centers as well as investment requirements. The major heads considered and a brief description of the
same is provided below
Investment: The total investment outlay for JNPT was considered along with the sources of finance to arrive at the
investment that would be required. These investments would come through JNPT or private operators. Investment
requirements of JNPT (public investments) were analyzed to identify the sources of the finance and the appropriate
cost of capital was used.
Revenues: The major streams for revenues that were considered are
z BOT Income: This was arrived at based on the current contracts with GTI and NSICT. For future projects it is
assumed that the revenue share would be around 20%. The upfront fee has been assumed to be zero. This is
because the amount of upfront fee that would be provided by an operator is speculative and would vary between
operators. Also any amount of upfront fee would affect the financials positively and hence to maintain
conservatism the upfront fee has been assumed to be zero.
z Estate Rentals: This is calculated based on CFS, Empty yard and other estate developments every year. The
revenues from these streams have been calculated as per TAMP guidelines.
z Marine Income: This is derived based on the traffic projections of the vessels and the expected marine charges
as per the latest information from TAMP
z JNPCT Income: Traffic from JNPCT has also been considered to arrive the JNPCT income
z Misc and Financial Income: Apart from the above income from past investments and expected future investments
(based on cash flows) have also been calculated at an average return not larger than previous returns.
Investments have been made primarily in securities, this is in line with port guidelines of investing in securities
that provide a steady cash stream with negligible risk typically provided by government securities.
Expenses: The major streams of expenses that were considered are

z Container handling costs: These costs have been derived on the basis of fixed and variable cost breakup
provided by the finance department and have been increased as per traffic and inflation depending on the nature
of the cost (fixed or variable)
159
z Marine Costs: These costs have been derived on the basis of fixed and variable cost breakup provided by the
finance department and have been increased as per traffic and inflation depending on the nature of the cost
(fixed or variable)
z BOT Expense: This is primarily the utility costs that are borne by JNPT and then recovered from the private
operators. These costs are based on the traffic handled at the BOT operators and have been increased based on
traffic and inflationary increase.
z Financial Expense: This considers the financial expense that JNPT would have to bear and also includes the
payouts of principal and interests on loans.
z Salaries: Salaries at JNPT have been increased as per discussions and the pay commissions. Every year the
salary has been increased by 10% and at the end of the plan period salaries have been increased by 25%
Liabilities: The liabilities that have been considered are social expense, deferred liabilities, pensions etc. These have
been grown at the rate of inflation. It has been assumed that there would be no deferred tax liability once the current
liability has been adjusted for. Loans have also been considered and a moratorium of one year has been assumed.
(The payback period is taken as 5 years).
Assets: Fixed assets as well as current assets have been considered

z Fixed assets: These assets have been depreciated as per the guidelines and current practices at JNPT. Fixed
assets have been added and replaced as per the projects that have been identified. This section therefore
considers replacement of assets as well as acquisition of assets
z Current Assets: This primarily includes the receivables and other current assets.
160
Key risks and sensitivities :

The business plan has been developed after considering various risks that the port might face. The profitability of
individual projects was derived after considering various scenarios such as lower traffic, lower revenues etc. The
overall business plan however faces from three key risks which are as follows:
Policy Risk:
Policy risk arises from a change in policy that might affect the functioning of the port effectively. These further include
the following
z Risk of support infrastructure being delayed: A change in policy leading to delay in supporting infrastructure such
as the DFC and major roads can lead to a fall in traffic that can flow through the port. This scenario has been
showcased in the revenue streams under the financial section
z Policy changes in BOT and other contracts: A change in policy on the BOT contracts can affect the revenue
flows of the port.
Administrative Risk:
z Risk of projects being delayed: This risk arises from a delay in project approval and implementation due to
administrative delays within and outside the port. This has the potential to adversely affect the business plan and
should be carefully monitored. KPMG has provided timelines for individual projects and these can be used to
ensure that projects are implemented on time and the administrative risk is minimized.
Trade Risk:
z Slow down in economic trade: A slowdown in economic trade can lead to overcapacity at the port although the
probability of such a scenario is limited as the traffic projections used as basis for the business plan have been
conservative. The risk of trade slowdown however has a potential to affect the business plan.
Apart from the risks detailed above the business plan faces risks within each of the individual projects. These have
been covered in the detailed action plan section.
161
13.0.1 Assumptions
Description Assumption Rationale

Rate of Inflation Growth in Inflation assumed at 4%, impacts all
throughout (in Percent) 4.00% expenses at the port
Marine charges for JNPT for FY05-06 are indicated

alongside. A recent order revised tariffs by 30% from
these levels with effect from December 06 onwards.
Accordingly the effect has been incorporated into
FY06-07 and 07-08 onwards. These reflect average
Marine Charges estimates for various vessel sizes
Rs per hour
Berth Hire 0.24 per GRT
Rs per
Port Dues 7.04 GRT
Rs per
Pilotage 17.388 GRT
Reduction in marine
charges 2006-07 Reduction from
onwards 10% 2007-08 onwards 30%
2650 is the avg. container handling revenue for

JNPCT. A recent order revised handling tariffs by
15% from this level with effect from December 06
Cargo handling onwards. Accordingly the effect ha been incorporated
charges 2650 Rs per TEU into FY06-07 and 07-08 onwards
Decrease in Cargo
handling charges at Reduction from
JNPCT 2006-07 onwards 5% 2007-08 onwards 15%
162
13.0.1 Assumptions
Description Assumption Rationale

Beyond 2012-13 This reflects a conservative assumption with tariff
increase in handling not expected to increase till 2012-13. Post this
and marine charges period as well tariff growth at 2% is assumed to
annually 2% be lesser than expenditure growth at 4%.
Lease rental growth for Lease rentals are grown at 5% annually as per
GTI 5% current agreement of GTI with port
@ 30%
incld 2%
Current tax rate 30.60% edu cess Current taxes paid out at this rate by JNPT
Escalation for current Lease rentals are grown at 5% annually as per

lease contracts 5% current agreements entered into by port
20,000.0
Fringe benefit tax 0 in 000's Assumed to be constant as per port input
Salaries increase 8% Annual increment
25% 10 year revision
163
13.1 Sources of Finance
13.1.1 Sources and cost of finance
The financial strategy of the port provides the guiding principles Exhibit 13.1.1 : Sources of Finance
that enable raising finance for the execution of projects in line
with the vision of the port. Identification and availability of the
Port internal resources
optimal source of financing for various projects would be critical
to the success of a port development strategy. z Investable reserves and surplus
As part of the business planning exercise, JNPT needs to External resources
undertake several developmental projects. These projects could
potentially be financed from a variety of sources. z Loan financing
JNPT's choice of financing options would be dependent on the z Issue of Bonds

nature of the project being undertaken. JNPT as a major port
operates within guidelines laid down by the Government of India Public private partnerships
which poses certain constraints on the mode of financing z Build operate and transfer (BOT) contract
options available to the port. awarded to private player
Sources of Finance – Public participative financing
The set of financing options that have been considered as part z Joint venture or Special purpose vehicle
of the business plan are as follows between public players
• Port internal resources
• External resources
• Public private partnership
• Public participative financing
The same are illustrated in exhibit 13.1.1.
164
Port internal resources -

JNPT can access port reserves and surplus as a Exhibit 13.1.2 : Reserves and Surplus (in Rs crore)
source of finance for specific projects. It has
maintained a healthy position of reserves and
surplus over the last four years as seen in exhibit Particulars 2005-06
2002-03 2003-04 2004-05
13.1.2. As of March 2006, JNPT has reserves and
surplus of Rs 1385.42 crores (apart from
investments). Keeping aside current liabilities and Reserves & 424.4 722.51 968.42 1385.42
provisions of Rs 151.70 crores as well as statutory Surplus
reserve of Rs 119.44 crores there is an investable
surplus of Rs 1114.28 crores as of March 2006.
This reserve is expected to show a steady growth
over the next few years through BOT revenues from
GTI. As GTI reaches capacity of 1.3 million TEUs
over the next few years, the BOT revenues that
JNPT can expect from GTI is Rs 120 crore per
annum resulting in increase in amount of reserves.
The cost of this form of capital is equal to the
opportunity cost of investing it elsewhere. In this
case the opportunity cost of this capital can be
taken equal to 9% This is arrived at from 8% the
YTM (yield to maturity) on a government bond of 5
year duration in July 2006 along with a 100 basis
points spread.
The substantial current reserves as well as
increase expected indicate that these reserves can
be a significant source of finance for projects in the
future.
165
External resources – Illustrative

JNPT can opt for the following sources of
external financing
Exhibit 13.1.3 : Illustrative Loan options for JNPT
a) Bank Loan
Particulars FCY Loan INR Loan
b) Loan from multilateral lending
Tenor 14 years 10 years
agencies
c) Issue of bonds
All in cost (p.a.) USD L + 0.81% 9.65%
a) Bank Loan –
JPY Yen L + 0.57%
JNPT has previously raised a bank loan of Rs
600 crore in March 2006 from State Bank of Effective all in
India and Indian Overseas Bank at interest cost (p.a.) USD L + 0.81% L + 2.49%
rates of 7.75% for a 3 year period. JPY Yen L + 0.57%
Current Indian interest rates indicate that a USD floating
rupee denominated loan for a period swapped to INR
exceeding 10 years would be available for a fixed 7.97%
fixed rate of between 9-10% per annum.
Yen floating
JNPT can opt for a short to long term bank Swapped to INR swapped to INR
loan over a period of 1-15 years as illustrated fixed (p.a.) fixed 7.73% 9.65%
in exhibit 13.1.3. The loan can be either USD floating
Foreign Currency (FCY) or INR based. swapped to USD
fixed 6.40%
The loans are likely to be linked to the LIBOR
(London Inter bank offer rate). The spread Yen floating
over LIBOR will vary with the currency on Swapped to USD swapped into
which the loan is based. JNPT can opt to swap fixed (p.a.) USD fixed 6.16% 8.08%
the floating FCY/INR loan into an FCY/INR
fixed loan.
L indicates LIBOR rate
166
b) Loan from multilateral lending agencies such as the Asian Development Bank –
JNPT has so far not used loans from multilateral funding agencies. However there has been a precedent with Asian
Development Bank(ADB) having financed specific projects at the Mumbai and Chennai port trusts. Replacement of
submarine oil pipelines along with modernization of 3 existing oil berths and pipelines was carried out at Mumbai
through funding of $97.8 million. Similarly extension of the container berth and upgradation of container yard and cargo
handling equipment at Chennai port was funded through an ADB loan of $15.2 million. The period of amortization of the
loan issued in 1997 was 25 years including a grace period of 5 years.
JNPT can opt for a long term loan from institutions like Asian Development Bank over a 5-15 year period. The loan can
be either Foreign Currency (FCY) or INR based.
Current interest rates indicate that a rupee denominated loan from ADB for a period exceeding 10 years would be
available for a fixed rate of between 9-10% per annum. The exact interest rate at which the loan would be made
available would be contingent on the structuring of the loan.
167
c) Issue of Bonds –
JNPT had previously issued unlisted bonds of book Illustrative
value or Rs 1 million with an interest rate of 5.40% for a
period of 18 months. Total capital raised through bond
issues was Rs 55 crores. These bonds were rated as Exhibit 13.1.4 : Illustrative Bond option for JNPT
AAA and redeemed in 2005. Particulars INR Bond
Current Indian interest rates indicate that an INR bond Tenor 10 years
issued for a period of over 10 years is likely to be
available between 9- 9.5% per annum. This is 100 to
125 bps over the government bond rate of 8.16% for a All in cost (p.a.) 9.30%
10 year bond as of August 2006.
Recent regulation requires all bond issues to be listed Effective all in cost (p.a.) L + 2.14%
and this would involve additional transaction costs and
procedures.
Swapped to INR fixed (p.a.) 9.30%
JNPT can opt for issuing bonds as a method to raise
capital as illustrated in exhibit 13.1.4. JNPT can opt for Swapped to USD fixed (p.a.) 7.73%
issue of bonds from short to long term over a period of
1-10 years.
A highly rated bond issue (e.g. AAA/AA+ rating) is
likely to raise capital at slightly lower rates than bank
finance.
168
Public Private Partnership –

Public Private Partnerships (PPP) bring public and private sectors together in long term partnership for mutual benefit.
The PPP label covers a wide range of different types of partnership, including -
• The introduction of private sector ownership into state-owned businesses, using the full range of possible
structures (whether by flotation or the introduction of a strategic partner), with sales of either a majority or a
minority stake;
• An arrangement where a private sector partner is signs a contract to provide a public service , including
maintaining, enhancing or constructing the necessary infrastructure;
• Selling Government services into wider markets and other partnership arrangements where private sector
expertise and finance are used to exploit the commercial potential of Government assets.
Public private partnerships can take several specific forms. A few of the popular forms of PPP are discussed below –
Build-Own-Operate (BOO)
The contractor constructs and operates a facility without transferring ownership to the public sector. Legal title to the
facility remains in the private sector, and there is no obligation for the public sector to purchase the facility or take title.
Contract Services
Operations and Maintenance
A public partner (federal, state, or local government agency or authority) contracts with a private partner to provide
and/or maintain a specific service. Under the private operation and maintenance option, the public partner retains
ownership and overall management of the public facility or system.
Operations, Maintenance, & Management
A public partner (federal, state, or local government agency or authority) contracts with a private partner to operate,
maintain, and manage a facility or system proving a service. Under this contract option, the public partner retains
ownership of the public facility or system, but the private party may invest its own capital in the facility or system.
Design-Build-Operate (DBO)
A single contract is awarded for the design, construction, and operation of a capital improvement. Title to the facility
remains with the public sector unless the project is a design/build/operate/transfer or design/build/own/operate project.
Turnkey
A public agency contracts with a private investor/vendor to design and build a complete facility in accordance with
specified performance standards and criteria agreed to between the agency and the vendor. The private developer
commits to build the facility for a fixed price and absorbs the construction risk of meeting that price commitment.
169
Build Operate and Transfer (BOT)

BOT is a popular approach to infrastructure development, which enables direct private sector investment in large-scale
infrastructure projects. The stages of BOT are as follows:
• Build – A private company (or consortium) agrees with a government/PSU/Trust to invest in a public
infrastructure project. The company then secures their own financing to construct the project.
• Operate – The private developer then owns, maintains, and manages the facility for an agreed concession period
and recoups their investment through charges or tolls.
• Transfer – After the concessionary period the company transfers ownership and operation of the facility to the
government or relevant state authority
Advantages of BOT -
BOT projects have several advantages such as-
• The government/PSU/Trust gets the benefit of the private sector to mobilize finances and to use the best
management skills in the construction, operation and maintenance of the project.
• The private participation also ensures efficiency and quality by using the best equipment.
• The projects are conducted in a fully competitive bidding situation and are thus completed at the lowest possible
cost.
170
BOT In Indian ports – Principles on which BOT contracts are awarded in

Areas for Participation of BOT concessionaire are - Indian ports –
• Construction and Operation of : There are certain guiding principles that largely apply to
all BOT contracts in Indian ports. Some of them of
• Container Terminals
importance are discussed below
• Bulk, Break-Bulk, Multipurpose and specialized
• 100% Foreign direct investment is allowed.
cargo berths
• Mechanism of selection of BOT developer is through
• Warehousing, Container Freight Stations, Storage
open competitive bidding.
Facilities and Tank Farms, Dry Docking Facilities
• The lease period of the BOT are upto 30 years.
• Ship Repair Facilities
• Government guarantees on return on investment are not
• Leasing of equipment for port handling and floating
offered.
crafts from private sector.
• An independent tariff regulatory authority (TAMP)
• Auxiliary Port Services (like Pilotage, Tugging and
determines tariffs.
Mooring).
• Protection of labour interest may be included as a clause
• Captive facilities for port based industries.
in the agreement
Advantages of BOT in ports

• It inducts additional resources into port development
• There exists a client-port symbiosis for port development
and diversification
• It creates new business opportunities for the port.
• Brings in greater exposure to practices of the global
network of terminal operators. This may result in
significant efficiency increases.
171
Current BOT contracts at JNPT - Exhibit 13.1.5 : Royalty payment by NSICT to JNPT
JNPT has entered into BOT contracts with 3 Year Royalty per TEU Year Royalty per TEU
organizations NSICT, GTI and BPCL for (in Rs) (in Rs)
revenue/royalty sharing. As landlord of the port JNPT
undertakes expenses to provide these terminals with 1 0 16 2361
certain services. In return JNPT gets revenue/royalty 2 0 17 2510
shares from these operators. The details of the
3 47 18 2670
revenue agreement with each terminal are as
follows – 4 52 19 2840
• NSICT – The agreement is based on royalty per 5 143 20 3022
TEU paid to JNPT for each of the 30 years of
6 157 21 3214
the BOT contract as shown in exhibit 13.1.5.
7 349 22 2419
• BPCL – The agreement is based on royalty on
wharfage revenue. BPCL serves two kinds of 8 379 23 3638
vessels - Public sector unit vessels as well as 9 615 24 3970
private vessels. For public sector vessels 20%
is the share of wharfage revenue paid out to 10 886 25 4119
JNPT, while the share is 50% for private 11 1194 26 4380
vessels.
12 1542 27 4660
• GTI – GTI pays JNPT annual lease rentals for
13 1960 28 4957
the land occupied by it as well as 35.503% of
cargo handling revenues earned. 14 2096 29 5274
Future BOT Contracts – 15 2218 30 5610
JNPT is likely to opt for the BOT model for the Discussions have indicated that the new MCA might suggest a
construction and operation of new terminals at the move from a pure revenue sharing agreement to a combination
port. The model concession agreement currently of an upfront fee and revenue sharing model. This upfront fee
suggested by the government proposes revenue would be a one-time payment by the developer at the beginning
share as a model for BOT contracts. Royalty based of the BOT period. Thus, JNPT's forthcoming BOT contracts
models seem unlikely to be used. The committee on are likely to be a combination of an upfront fee and revenue
infrastructure is currently in the process of redrafting sharing model.
the model concession agreement (MCA) for ports.
172
Cost of Capital for BOT developer –

The cost of capital for a BOT contract is dependant on the developer’s cost of capital. The 3 main inputs to arrive at the
developer’s cost of capital are
• Developer's debt to equity ratio
• Developer's cost of debt
• Developer's cost of equity
Suitable assumptions would need to be taken for the debt-equity structure of the BOT developer. As indicated by TAMP
guidelines, an optimum structure of 1:1 between debt and equity is assumed.
The developer’s cost of debt can be estimated by assigning a spread over the zero coupon yield curve (ZCYC) for
Government bonds as well as taking into account a repayment period. For instance we take the ZCYC curve as of 11th
July 2006 for arriving at the cost of debt of 10 year payment period loans for selected years as shown in exhibit 13.1.6.
A spread of 100 bps over computed risk free ZCYC is taken to arrive at the cost of debt.
The developer’s cost of equity is its opportunity cost of capital. To arrive at the cost of equity we need equity Beta , cost
of debt and market return. Having taken cost of debt for each year as arrived above we use an equity Beta of 1.
(Average infrastructure index Beta between July 2002 and July 2005 in the Indian equity markets). Indian market
returns over risk free rate have been 6.5% historically. Using this data the cost of equity is calculated.
Cost of capital is obtained from the calculated cost of debt and equity as well as debt-equity ratio of 1:1.
Exhibit 13.1.6 : Illustration of cost of capital for Loans taken in given year
Year 2007 2008 2010 2015 2020 2025
Cost of Debt (in %) 9.33 9.79 9.94 10.62 9.51 8.84
Cost of Equity ( in %) 15.83 16.29 16.44 17.12 16.01 15.34
Debt-Equity Ratio 1 1 1 1 1 1
Cost of Capital(in %) 12.58 13.04 13.19 13.87 12.76 12.09
Assumptions – D/E ratio of 1, 10 year loan period, Market return of 6.5%, BOT contractor having avg. infrastructure Beta of 1
173
Public participative finance / Special Purpose Vehicles Exhibit 13.1.7 : Mumbai -JNPT Port Road Co Ltd SPV
Another method of execution of partnerships that has financing details
been used by JNPT is Special Purpose Vehicle (SPV) for
connectivity related projects. To ensure the rapid Particulars Rs millions Rs millions
execution and completion of main evacuation routes from
the port NH4-B and SH54-Aamra Marg, JNPT participated Equity 1460
in a SPV along with National Highways Authority of India
(NHAI), Public Works department and City and Industrial NHAI 970
Development Corporation, Navi Mumbai. The SPV “
Mumbai- JNPT Port Road Co Ltd.” was floated to execute JNPT 400
the project. The project consisted of 2 parts
• Package-I – 4 laning of NH-4B and NH4 CIDCO 90
• Package-II – 4 laning of SH-54 & construction of 4 Debt by Financial institutions 1430
lane Aamra Marg
The project has proved successful in completing widening Subordinate Debt 690
of NH-4B to 4 lanes as per schedule. The second phase
of widening of SH-54 – Aamra Marg to 4 lanes is in JNPT 600
progress and will be completed by 2007. The total project
financing was for Rs 358 crores details of which are CIDCO 90
shown in exhibit 13.1.7.
An SPV structure can be developed for implementation of Total 3580
future projects by JNPT. The exact nature of the SPV
would depend on the kind of project as well as the parties
participating in the project.
174
Exhibit 13.1.8 : Comparison of financing options available to JNPT
Serial Source of Finance Advantage Disadvantage Cost of Capital

No.
1 Reserves and Surplus Cheapest source of capital Opportunity cost of
which also does not lead capital – Spread over
to creation of a liability GoI bond rate
2 Loans Allows initiation of large Requires governmental 9.5-10% for long term
projects that cannot be clearances and creates loan (over 10 year
independently funded by annual cash flow period)
reserves and surplus liabilities
3 Issue of Bonds Cheapest source of Requires listing of bond 9.0-9.5% for 10 year
external capital and allows issues and involves bond
initiation of large projects significant transactional
that cannot be expenses for a
independently funded by government body
reserves and surplus
4 BOT Port can create Port gets lesser Cost of capital ~13% for
infrastructure at minimal revenues from a 10 year loan with D/E
risk to own capital while financially attractive ratio of 1 and 100 bps
enjoying BOT contractor projects via-a-vis over ZCYC cost of debt
expertise financing these projects
independently
5. Partnership Finance/ Port is able to positively Financial returns of Depends on financing
SPV mode influence execution of such investments are arrangement between
projects that impact its limited to the equity players
operations share
175
13.2.1 Approach to be adopted for financing projects
As part of discussions during the business planning exercise, certain guiding principles have emerged for financing of
projects. It has been indicated that a preferable mode of financing for the projects would be either port resources or
private participation. Government participation for funding of these projects is unlikely as has been indicated in
discussions at various fora. The guiding principles adopted have been discussed below.
Guiding Principles -
Projects taken up as part of the business plan can be funded from internal resources or by private investment.
Projects that have a clearly identified revenue stream as well as a viable Net present value/Internal rate of return
(NPV/IRR) can potentially involve private sector participation (e.g. through BOT participation)
Projects involving creation of common-user infrastructure or projects that may not show clearly identified revenue
streams or a viable NPV/IRR are likely to be undertaken through port resources. While these projects may not show an
attractive NPV/IRR, they would still benefit the overall operations of the port
Financing method to be used for different projects –
The list of projects identified for financing are limited to those projects identified through the vision and port
development strategy of JNPT. Likely sources of financing have been identified based on guiding principles illustrated
in exhibit 13.1.9.
a) Common user infrastructure – Based on discussions at various fora, it emerged that the creation of all common
user infrastructure allowing operation of various terminal operators would be the responsibility of the port. This is also
in line with the way the landlord port model operates the world over. This common user infrastructure in the case of
JNPT includes -
• Internal connectivity projects ( Road, rail etc.)
• Dredging of main channel and JNPT channel
• Sea side handling (Towage, pilotage etc)
• Other infrastructure ( security etc.)
The financing method for common user infrastructure would depend on the presence of a viable revenue stream for
that infrastructure. As internal connectivity projects may not have a clear revenue stream unless tolled, they are
unlikely to be financed through loans /bond issues and would be funded through port internal resources.
Dredging as a project would result in revenue streams for JNPT in the form of sea side tariffs. Given the fact that
dredging is an expensive proposition JNPT is unlikely to finance the entire project from internal resources. Discussions
with port officials reveal that dredging is likely to be part funded by reserves and partly through loans.
176
As a landlord port JNPT would continue to provide sea side services such as towage and pilotage. Purchase of
equipment and services for servicing rising number of ships are expected to be funded through port reserves and
surplus. Other common user infrastructure provided by the port such as security are likely to be funded via port internal
resources.
b) Future terminals –
Projects that have a clearly identified revenue stream as well as a viable NPV/IRR can potentially involve BOT
participation. All terminal operations would have identified traffic projections and in turn revenue flows. Hence, creation
of new terminals is likely to be through private participation via the BOT route.
c) Warehousing/CFS/free trade zones/Storage facilities –
Projects that have a clearly identified revenue stream as well as a viable NPV/IRR can potentially involve BOT
participation. All warehousing/free trade/CFS operations would be based on the traffic projected at JNPT and would
have clearly identified revenue flows. Hence, creation of warehousing/CFS/free trade zones/storage zones is likely to
be through private participation via the BOT/leasing route.
JNPT as landlord would need to develop the land prior to handing it over to private players for construction and
operation. This development has a clear stream of revenues arising from lease/revenue sharing and hence can
potentially be financed via loans/ port internal resources.
d) External connectivity projects –
JNPT is dependant on external roads/railways connecting it to the immediate hinterland. These networks are critical to
the evacuation of containers and prevention of congestion at the port. Examples of projects that can be executed as
part of this are
• Road projects in the vicinity of the port like Link roads, highways etc
• Railway lines connecting the port to key rail corridors
Stakeholders in such projects include regional land authorities and road/rail developers. Although responsibility for their
execution does not lie on the port it is advocated that they participate in such projects so as to positively influence their
timely execution. Given the multiplicity of stakeholders and the imperative of the project to JNPT, It is suggested that
JNPT participate in these projects through special purpose vehicles with other stakeholders.
d) JNPT operated container terminal –
JNPT owns and operates a container terminal (JNPCT). This terminal will require significant expense in terms of
projects for equipment upgradation/capacity expansion. As these projects are not common-user based and have
clearly identified revenue streams, it is likely that they will be funded via port internal resources or loans.
177
Exhibit 13.1.9 : Project Financing Options available to JNPT
Serial No. Type of Projects Likely Source of Finance Cost of Capital
1 Common user infrastructure- Combination of reserves and 9-10% (exact cost dependant on
Dredging surplus as well as bank loans proportion of finance from each
source)
2 Common user infrastructure- Reserves and Surplus Opportunity cost of capital –
Internal roads spread over GoI bond rate
3 Common user infrastructure- Reserves and Surplus Opportunity cost of capital –

vessel handling related projects spread over GoI bond rate
3 Equipment / expense for JN Port Reserves and Surplus Opportunity cost of capital –
owned container terminal (JNPCT) spread over GoI bond rate
4 Construction and operation of Public private partnerships Cost of capital ~13% for a 10
terminals, logistics, distribution and such as BOT year loan with D/E ratio of 1 and
warehousing facilities, free trade 100 bps over ZCYC cost of debt
zones
5. Critical external road/railway Partnership Finance Depends on financing
connections arrangement between players
178
13.2 Overview of investments
Total investments expected in the port till 2017-18 Exhibit 13.2.1 : Investment outlay by mode of finance till
are Rs 14556 crores. Investment requirements of 2017-18
the port trust itself are Rs 4530 crore by way of
projects identified in the business plan. However Mode of finance Investment outlay
there are also investment requirements identified as (in Rs crores)*
part of the XI plan outlay internal to the port that will
be required. These include the up gradation of Port resources (Includes internal port 4530
VTMS and the creation of a new anchorage. These resources as well as external
investments as part of the XI plan amount to financing like bank loans, as also the
1398.14 crore. These investments would be port’s expected contribution to
needed in order to fund various projects for building projects undertaken through Special
infrastructure required for serving future traffic Purpose Vehicles)**
potential. These amounts are derived based on BOT/PPP route 8190
financial coverage and other analysis done for
individual projects. Public participative financing/SPV 231.7
(excluding ports contribution)
The financing requirements for upgradation and
replacement as well as costs envisaged for Other public investments 207
equipment hired and personnel costs have not
been included currently.
This outlay can be financed from the sources Other investments ( as part of XI plan 1398
detailed earlier. The approximate outlay through outlay)
each of the sources is tabulated in exhibit 13.2.1
alongside Total investments 14556
* Apart from this there would be regular upgradation

investments as well as recurring investments for hired
equipment such as pilot launches, tugs etc, which have not
been included. These figures factor in annual inflation of 4%
179
13.2 Overview of investments – Major Projects
Total Financial Outlay in Investor

Year Name of project
Rs crore (by all parties)
Client related investments
2007-08 Creation of 32 ha of CFS 212 JNPT, BOT player

2008-09 330 m extension 552 BOT player
2009-10 Creation of 50 ha of empty yard 216 JNPT, BOT player
2010-11 Free trade zone (FTZ) 2472 JNPT, BOT player
2010-11 4th container terminal – 1 3238 BOT player
2011-12 Marine chemical berth 93 BOT player
2014-15 4th container terminal -2 2000 JNPT, BOT player
Public investments
2008-09 Grade separators 131 SPV (JNPT, public bodies)
2009-10 2nd link road via Belpada 189 SPV (JNPT, public bodies)
2009-10 Evacuation road for EPZ 41 JNPT
2009-10 Dredging first phase 800 JNPT , MbPT
180
13.2 Overview of investments – Major Projects
Total Financial Outlay
Year Name of project in Rs crore (by all Investor
parties)
Increase productivity to 24 moves per
2009-10 120 JNPT
hour
2009-10 Link road via Dronagiri 29 JNPT
2010-11 Road linking port to highways 39 JNPT
2010-11 Six laning of NH 4B 46.8 JNPT
2010-11 Sorting yard 52 JNPT
2013-14 Increase in RMGC moves 90 JNPT, Other BOT players
2014-15 Creation of additional rail track 147 Public bodies
2015-16 Dredging second phase 1300 JNPT
2016-17 Addition of RMGCs to meet capacity 43 JNPT
Creation of road from Aamra Marg to
2017-18 15 JNPT
port
Table Indicates major investments and their planned expenditure
181
13.2 Overview of investments – Annual outflow on projects
Annual Investments by
JNPT in various projects
(in Rs 000) 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
RMGCs moves/hour 303,000
CFS 32 Hectares 1,142,170
50 Hectares Empties 1,856,026
Shallow berth 100,000
Free Trade zone 3,005,079 2,344,453 2,438,231
Emergency berth 210,969

Additional evacuation
road 410,000
Dredging 1st phase 7,000,000
Dronagiri Link road 296,000
Automation at gates 12,100
Additional port link 390,000
Six laning NH4b 0
Sorting yard 521,220
182
JNPT in various projects
(in Rs 000) 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
40 hectares of empties 1,737,030
56 hectares CFS 2,431,842
RMGCs moves/hour 300,000
Automation at Rail ICDs 18,000
49 hectares CFS 2,393,555
28 hectares empties 1,367,746
Dredging 2nd phase 13,000,000
New RMGCs 430,000
Ammra Marg to port road 147,500
183
JNPT in
replacement/acquisition of
container equipment
projects
(in Rs 000) 2008-09 2009-10 2010-11 2011-12 2015-16
Acquisition of 3 RMQCs 980,000
Shifting of 2 RMQC 30,000
Acquisition of 1 RMQC 350,000
Shifting of 1 RMQC 15,000
Replacement of 1 RMGC 168,730
Replacement of 3 RMQC 1,080,000 120,000
Acquisition of 6 RTGC 300,000
Replacement of 1 RMQC 430,000
Replacement of 3 RTGC 250,000
Replacement of 1 RMGC 230,000
184
Annual Investments by JNPT in

replacement/acquisition of marine
equipment projects
(in Rs 000) 2009-10 2010-11
Replacement of 3 tugs 900,000.00
Rep of 3 Pilot launches & utility launch 150,000.00
Replacement of 2 launches 350,000 30,000
Acquisition of 2 hi speed launches 15,000 30,000
185
13.3 Overview of Financial Analysis
The financial analysis of the port has been done on the basis of identified investments and projects till the term of the
action plan (2015-16). The financial projections beyond this time would change depending on the projects that the
port undertakes beyond 2015-16.
The financial analysis of the statement of accounts of the port show that the port would have a healthy CAGR
(compounded annual growth rate) of revenues and profits. The coverage ratios indicate that the port would also be
able to manage its liabilities through the cash generated by it. The output from analysis done on various parameters
is provided below.
The financial model is enclosed alongside as annexure 2.
z Profitability
JNPT is expected to maintain a high profitability. The OPM and GPM shown in Exhibit 13.6.1 indicate that on an
average JNPT would have a OPM of around 70%. This is primarily due to the fact that JNPT would earn significant
profits from revenues share which do not involve a corresponding operating expense. Similarly returns from estate
rentals would also aid in maintaining profitability.
z Revenues
JNPT’s revenue profile over the years is expected to change as can be seen in Exhibit 13.3.3. As is illustrated in the
exhibit a significant portion of the revenues would come from concession fee in the latter ears. This is because JNPTs
share of terminal traffic would decrease over the long term due to increase in total number of terminals. Currently
JNPT operates one out of the three terminals however in the latter years the number of terminals would increase to 5
but JNPT would continue to operate only one. This translates into an increase in concession fee.
The revenue profile of JNPT in the later years is representative of the revenue profile for a landlord port indicating that
JNPT would increasingly act as a landlord. This has a bearing on the skills and capabilities required for managing the
port. This has been considered and training for managerial staff has been included in the action plan.
z Expenses
The growth in expense as shown in Exhibit 13.3.4 indicate that there would be an increase in expenditure at JNPT.
As indicated in Exhibit 13.3.5, the largest increase would be in salaries followed by the increase in BOT expense.
BOT expense is primarily the utility cost of BOT operators (which is recovered from them) and therefore increases in
proportion to traffic. The initial stages (upto 2016) therefore show a larger CAGR on BOT expense as the growth in
traffic is larger till 2016 when the port achieves maximum capacity. Salaries are increased by 8% every year and 25%
increase at the end of a pay commission. The high proportion of salaries in the expense streams in later years is an
area that should be taken up for examination by the port.
186
13.3 Overview of Financial Analysis
z Return on Capital
Return on Capital Employed at JNPT is expected to remain in the region of 30-35% over the medium to long term.
This is attractive for JNPT and investments in JNPT infrastructure are expected to provide attractive returns. The
ROCE for JNPCT is restricted by TAMP guidelines (15% ROCE limit) and a change in the TAMP guidelines could
further increase or decrease the ROCE of the port.
z Coverage
JNPT is adequately covered with respect to debt repayments. JNPT earns dollar income for marine services and
therefore is naturally hedged with respect to foreign exchange fluctuations. This provides an opportunity for JNPT to
explore the foreign capital markets for raising debts. JNPTs income from marine charges provides it with a natural
hedge for the 1300 crore loan for dredging phase 2 and the 500 Crore loan for dredging phase 1.
JNPT would pay off all its debts by 2020-21 and is expected to be adequately covered with respect to debts.
z Investments
As shown in exhibit 13.4.3, JNPT’s investments would grow at a significant pace through the years. The nature of
investments however is expected to undergo a change. It is expected that a large portion of investments in the early
years would be used for building assets (CFS, empty yard, Roads etc) while the latter years could witness a large
portion of investments being used in securities etc (assuming no other investments once the maximum capacity has
been reached except replacements).
It is also important to note that in certain years JNPT would need to liquidate some investments in securities etc to
match the cash flow requirements for investments into fixed assets. The shortfall in cash flow can be easily met by the
liquidation and would not affect the port.
Overall JNPTs investments would grow over time and the cash and bank balance as well as other investment are
expected to remain at high levels indicating JNPTs ability to meet unexpected future demands as well as planned
expansion needs.
187
13.3 P& L Analysis
13.3.1 Increase in Revenues
z The primary source of revenue for JNPT is expected to be from concession fee. In line with the increase in traffic the marine
charges (port dues) are expected to rise.
z The suggested EPZ and other land use projects would also contribute to the revenues for JNPT. Shown below is the over all
revenue break up for JNPT between 2006 to 2027.
Exhibit 13.3.1 : Break up of Revenues
35,000,000
30,000,000
25,000,000
Rs in 000s
20,000,000
15,000,000
10,000,000
5,000,000
0
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
2022-23
2023-24
2024-25
2025-26
2026-27
Port dues Other dues (Pilotage,berth hire) Storage (at similar % age)
Wharf handling Concession fee Other operational income(estate)
188
13.3 P& L Analysis
If the port does not develop any additional infrastructure then the capacity would be limited to the existing
traffic
30,000,000
25,000,000
20,000,000
Rs in 000s
15,000,000
10,000,000
5,000,000
0
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
2022-23
2023-24
2024-25
2025-26
2026-27
In the absence of infrastructure additions the revenue potential of the port in 2026-27 would be limited to around Rs 2390
crore compared to over Rs 3273 crore in the base case. Also the CAGR of revenue growth would be limited to 5.2% only.
189
13.3 P& L Analysis
Similarly the absence of supporting infrastructure would limit the growth of the port up till the 330 m only
30,000,000
25,000,000
20,000,000
Rs in 000s
15,000,000
10,000,000
5,000,000
0
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
2022-23
2023-24
2024-25
2025-26
2026-27
In the absence of infrastructure additions the revenue potential of the port in 2026-27 would be limited to around Rs 2491
crore compared to over Rs 3273 crore in the base case. Also the CAGR of revenue growth would be limited to around
5.5% only.
190
13.3 P& L Analysis
13.3.1 Revenue - Comparison of Scenarios
Scenario 1 Scenario 2 Scenario 3

Expansion as per plans Current situation Absence of supporting
continues and zero infra limiting expansion
investments are made only upto 330m
Capacity 10.9 Mn TEUs 4-5 Mn TEUs 5.6 Mn TEUs
Revenues in 2026-27 in 3273 2390 2491

Crores
Growth in Revenues p.a. ~ 7.8% 5.2% 5.5 %
The comparison of the above scenarios indicate that the absence of supporting infrastructure and lack of investments
at JNPT would adversely affect the growth rate and revenue potential.
An absence of supporting infrastructure such as the DFC would restrict the growth of the port to the 330 m berth and
terminal beyond the 330m might become infeasible due to absence of connectivity infrastructure. In such a scenario
the port capacity would be limited to around 5.6 Mn TEUs and the revenues would be limited to Rs 2491 Crore in the
year 2026-17 (end of twenty year period). Also the growth of revenues would be at the marginal rate of 5.5%.
If the port does not invest in infrastructure then the growth of the port would be limited to the current terminals and
additional terminals would not develop. In such a scenario the capacity of the port would be limited to 4-5 Mn TEUs.
The revenues of the port in such a scenario would also reduce to Rs 2390 crore at a slow growth of 5.2% (CAGR).
The base case assumes that the port would invest in infrastructure as per the projects identified and supporting
infrastructure would be developed as per the current plans. In such a case the port would witness a significant growth
rate of close to 8% in revenues and would reach over Rs 3273 Crore of revenues in 2026-27.
191
13.3 P& L Analysis
13.3.2 Growth in Revenue Streams
z Estate Income and concession fee show the highest growth amongst the various revenue streams of the port. Apart from this
Marine charges also are expected to show a CAGR of over 5-6%
Exhibit 13.3.4 : CAGR of Revenue Streams

25.00%
20.00%
15.00%
% age
10.00%
5.00%
0.00%
s
g
)
)
)
re
ue
te
in
fe
ag
dl
hi
ta
d
n
an
es
r%
rt
rth
io
Po
ss
h
e(
e
il a
rf
,b
ce
m
ha
sim
co
ge
on
W
in
ta
C
t
ilo
(a
l
na
(P
tio
ag
es
a
or
er
CAGR till 2027 CAGR till 2016
du
St
op
er
er
th
th
O
192
13.3 P& L Analysis
13.3.3 Revenue Split
Exhibit 13.3.5 : Revenue split at various points in time
Other dues
Revenue Split - 2016
(Pilotage,bert
Port dues h hire)
Other 3% 9% Storage
operational 1%
income(estate
)
16% Wharf
handling
19%
Concession
Revenue Split-2006 fee
Other
operational 52%
income(estat Revenue Split - 2026 Other dues
e) Port dues Other dues (Pilotage,berth
Port dues hire)
7% 5% (Pilotage,bert
2% 8% Storage
h hire) Other
Concession 1%
17% operational
fee
income(estate)
18%
14% Wharf handling
17%
Storage
4%
Concession
fee
58%
Wharf
handling
49%
193
13.3 P& L Analysis
13.3.4 Growth in Expenses
Exhibit 13.3.6 : Break up of Expenses
10,000,000.00
9,000,000.00
8,000,000.00
7,000,000.00
Rs in 000s
6,000,000.00
5,000,000.00
4,000,000.00
3,000,000.00
2,000,000.00
1,000,000.00
0.00
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
2022-23
2023-24
2024-25
2025-26
2026-27
Salaries Social charges and Pension premiums
Running costs (container, marine, estate) Adminstrative costs
Other costs (exp on BOT)
194
13.3 P& L Analysis
13.3.5 Growth in Expenses Streams
Exhibit 13.3.7 : CAGR of Expense Streams

16.00%
14.00%
12.00%
10.00%
% age
8.00%
6.00%
4.00%
2.00%
0.00%
Salaries Social charges and Running costs Adminstrative costs Other costs (exp on
Pension premiums (container, marine, BOT)
estate)
CAGR till 2026 CAGR till 2016
195
13.3 P& L Analysis
13.3.6 Expense Split
Exhibit 13.3.8 : Expense split at various points in time

Other costs Expense Split - 2016
(exp on
BOT)
Adminstrati 9% Salaries
ve costs 22%
9%
Social
charges
and
Running Pension
costs premiums
(container, 6%
Expense Split-2006 Other costs
marine, Other costs Expense Split - 2026
(exp on (exp on
estate)
BOT) BOT)
Adminstrativ 54%
5% Salaries Adminstrativ 5%
e costs
19% e costs
14%
Social 9%
Salaries
charges and
34%
Pension
premiums
5%
Running
Running
costs
costs
(container, Social
(container,
marine, charges and
marine,
estate) Pension
estate)
57% 48% premiums
4%
The high proportion of salaries in the expense streams in later years is an area that should be taken up for examination by
the port.
196
13.3 P& L Analysis
13.3.7 Operating Profit
Exhibit 13.3.9 : Operating Profit
30,000.00
25,000.00
20,000.00
Rs in Crores
15,000.00
10,000.00
5,000.00
0.00
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
2022-23
2023-24
2024-25
2025-26
2026-27
Operational net earnings before depreciation, interest and tax
197
13.3 P& L Analysis
13.3.8 Operating Ratio (Op Expenses/ Op Revenues)
Exhibit 13.3.10 : Operating Ratio
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
2022-23
2023-24
2024-25
2025-26
2026-27
Operating Expense/ Operational revenue
198
13.3 P& L Analysis
13.3.9 Growth in Profit after tax
Exhibit 13.3.11 : Growth in PAT
25000000
20000000
15000000
Rs in 000s
10000000
5000000
0
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
2022-23
2023-24
2024-25
2025-26
2026-27
PAT
199
13.4 Cash flow Analysis
13.4.1 YoY sources of funds
Loan for
Exhibit 13.4.1 : YoY Sources of Funds Dredging
Phase 2
25,000,000.00
Loan for
Dredging Phase
20,000,000.00
1
RS in Crores
15,000,000.00
10,000,000.00
5,000,000.00
0.00
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
2022-23
2023-24
2024-25
2025-26
2026-27
Sources of funds
200
13.4.2 YoY Loan drawdown
Loan for
Dredging
Phase 1 Loan for
Dredging
Phase 2
Exhibit 13.4.2 : Loan drawdowns
7,000,000.00
6,000,000.00
5,000,000.00
Rs in 000s
4,000,000.00
3,000,000.00
2,000,000.00
1,000,000.00
0.00
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
Loans
201
13.4.3 YoY Investment breakup
Investment phase characterized

Exhibit 13.4.3 : Investment breakdown by high increase in fixed asset
investment
16,000,000
14,000,000
12,000,000
10,000,000
Rs in 000s
8,000,000
6,000,000
4,000,000
2,000,000
-2,000,000
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
2022-23
2023-24
2024-25
2025-26
2026-27
Investments in fixed assets Special purpose vehicles Investments in securities Sheds to BOT
As can be seen in the graph the initial phase witnesses a huge increase in fixed asset investment due to the large number
of projects being undertaken. In the latter years this reduces and investments in securities (excess cash increases)
202
13.4.4 Repayment of Loan
Exhibit 13.4.4 :Repayment of Loans
800.00
700.00
600.00
Rs in Crores
500.00
400.00
300.00
200.00
100.00
0.00
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
Repayment of loans
JNPT would be able to repay all its loan liabilities by the year 2020-21
203
13.4.5 YoY Balance Cash flow (Sources-Uses)
Investment phase characterized

Exhibit 13.4.5 : Balance cash flow YoY
by low increase in net cash flow
due to reinvestments
14,000,000
12,000,000
10,000,000
8,000,000
6,000,000
Rs in 000s
4,000,000
2,000,000
-2,000,000
-4,000,000
-6,000,000
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
2022-23
2023-24
2024-25
2025-26
2026-27
Balance flow of funds (inc in cash)
204
13.5 Balance Sheet Analysis
13.5.1 Total Cumulative Investments in securities
Exhibit 13.5.1 : Total cumulative investment in securities
8,000.00
7,000.00
6,000.00
5,000.00
Rs in Crores
4,000.00
3,000.00
2,000.00
1,000.00
0.00
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
2022-23
2023-24
2024-25
2025-26
2026-27
Total Investments
As can be seen in the graph, in the initial stages the investment growth is limited due to large investments in fixed assets.
In the latter years however the growth is large due to excess cash. The reduction in 2009-10, 2010-11, 2011-12 is on
account of liquidation of investments which has been done to match the cash requirements
205
13.5 Balance Sheet Analysis
13.5.2 Growth in Fixed Assets
Asset creation due to

dredging
Exhibit 13.5.2 :
Growth in Fixed Assets
70,000,000.00
60,000,000.00
50,000,000.00
Rs in 000s
40,000,000.00
30,000,000.00
20,000,000.00
10,000,000.00
0.00
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
2022-23
2023-24
2024-25
2025-26
2026-27
Fixed assets
As can be seen in the graph, in the initial stages the investment growth leads to an asset build up. However post 2017-18
the asset build up is negligible and depreciation lead to a reduction in net asset value.
206
13.6 Ratio Analysis
13.6.1 Gross Profit Margin and Operating profit margin
Exhi bit 13.6.1 :Gross profit Margin
80.00%
70.00%
60.00%
50.00%
In % age
40.00%
Fall in OPM and GPM
30.00% due to decrease in
tariffs
20.00%
10.00%
0.00%
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
2022-23
2023-24
2024-25
2025-26
2026-27
Gross profit margin Operating Profit Margin
As can be seen in the graph, the gross profit margin for JNPT remains healthy throughout the years and is over 50%
207
13.6 Ratio Analysis
13.6.2 Return on Assets, ROCE and Asset Turnover
Exhibit 13.6.2 :ROA, ROCE and Asset Turnover

Reduction in
100.00% tariffs
90.00%
Increase in Increase in assets
80.00%
assets (dredging phase 2)
70.00%
60.00%
In % age
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
2022-23
2023-24
2024-25
2025-26
2026-27
Return on Assets ROCE Asset Turnover
The return on asset at JNPT maintains a healthy ratio of over 30% except in years where there is a huge asset buildup or
where revenues reduce due to fall in tariffs
208
13.6 Ratio Analysis
13.6.3 Interest Coverage ratio & Debt Coverage Ratio
Exhibit 13.6.3 : Coverage Ratios
30000.00%
25000.00%
20000.00%
In % age
15000.00%
10000.00%
5000.00%
0.00%
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
Debt Service Coverage Ratio Interest Coverage Ratio
JNPT over the years would be able to maintain a healthy coverage ratio on debts and interests payable
209
13.7 Well defined key figures
The formulae used for financial analysis are provided below:

EBIDTA: Earnings before depreciation, tax and interest
EBIT: Earnings before tax and interest
z Gross Profit Margin= (Gross Profit (EBIDTA) / Sales ) * 100 %

z Operating Profit Margin = (EBIT/sales)* 100%
z Return on Assets= (EBIT/ total fixed assets in the year) *100%
z ROCE = (EBIT/ Capital Employed (Fixed asset + current assets – current liabilities)) * 100 %
z Asset Turnover Ratio = Total revenue/ Fixed assets
z Interest Cover = EBIT / Interest Payable
z DSCR (Debt service coverage ratio) = EBIT/(Interest + Principal payable in the year)
210
Chapter 14
Detailed project action plan
211
14.0 Overview of Action Plan
A detailed set of action plans have been created for all projects from JNPT’s perspective. These action plans outline the
following elements –
• Objective of the plan – Indicates the project to be undertaken
• Project team – Highlights departments and project responsibility at JNPT
• Key Modules - Intermediate stages of the setup phase that need to be completed sequentially
• Timelines – Typical time taken to move from one module to another as well as overall timeline
• Linkages/dependencies – These highlight potential dependencies that exist between projects to the port and
other policy making bodies. This aims to ensure successful completion of the projects on time
• Key risks – These highlight the key risks associated with a project and its impact on the port
An illustration of the format used for each individual action plan is shown in exhibit 3.0.1 indicating the elements
discussed above.
Action plans have been detailed out for projects year-wise for the 7 year plan period from 2007-08 to 2014-15. Action
plans have been organized as follows
• Development of new infrastructure
• Process improvement
• Organizational changes
A summary of all projects identified within each of the above mentioned categories along with their section and page
number for their individual action plans has been included in exhibits 3.0.2 to 3.0.4.
Action plans have been detailed out assuming that approval of business plan by the government implies a pre-
feasibility approval for projects contained in the plan. Feasibility activities post the approval of the business plan are
thus related to the detailed/ technical feasibility of the individual projects. It is logically assumed that the business plan
will come into force from the financial year 2007-08, thus requiring approval of the business plan latest by 31st March
2007. It is assumed that activities on individual plans can thus start from April 1st, 2007. Timelines taken for approval
process are estimates arrived at after discussions with port. Approval process timelines vary with the type of project as
well as investment requirements for the project.
212
Port involvement in action plan and project identification

Port personnel from various functions including finance, operations, planning and administration have been involved
closely while developing the action plan and at all stages leading upto it. These include financial assumptions and
financial plan development, integrated capacity assessment model, project identification, traffic forecast and strategy
development.
This has been achieved through regular joint exercises carried out by the consultants along with the port personnel
such as strategy development workshops, vision development workshop, team presentations and one to one
discussions.
Model updation by port personnel

The action plan is based on the model developed by the consultant and the port personnel would need to regularly
update the model to ensure that schedules are being met and to measure the affect of any deviation over the
financials of the port. For this purpose the model has been built so that all input fields and sheets are coded with a
different color. Apart from that assumptions have also been indicated on a separate sheet. This would enable port
personnel to update the plan as and when required.
The team of consultants working on the project have also spent considerable time explaining and detailing out the
model to port personnel specially in the planning, finance and operations department so that these departments are
well acquainted with the model and to ensure that the port personnel can modify the model as per requirements at a
later stage.
213
Exhibit 14.01 : Illustration of action plan Highlights the objective of
individual plans
Project Manager:
Objective ILLUSTRATIVE
Advisory Managers:
Key Modules Indicates timeframe allotted for the

completion of a particular module ,
Initiation of project activities (April 1st 2007) has to be adhered to so as to allow
… meeting of objective as per schedule
Indicates key members with
responsibility for the project Board approval for hiring of consultant (30 days)
execution from JNPT …
Indicates a key sequential step/ module in the
action plan that needs to be completed within a
specified timeline

~ x months
Prerequisites / Linkages
* Not determinable– can
vary significantly, only • Prerequisites: None Allows identification of linkages and
JNPT timeline dependencies between projects,
• Linkages: None
highlights need to carry out regular
Indicates timeline of involvement of status check and ensures parallel
JNPT in the project, is the target for development of two projects with
project team at JNPT to focus on Key Risks linkages
Milestones
Highlights to policy makers and the
port the risks faced by the project
such as investment, delays,
Indicates checkpoints/ milestones
permissions etc Contd.
in the project life span
214
Exhibit 14.0.2 : Infrastructure creation projects
Serial No. Project Section No. Page No.
Development of 32 Hectares of land for

1 3.1.1 115
CFS operations
2 Creation of common user pipelines 3.1.2 117
Development of 50 Hectares of land for 3.1.3

3 118
empty yard operations
330 m Extension of berth for container 3.1.4

4 120
operations
Establishment of grade separators to
5 improve the efficiency of the approach 3.1.5 122
road to the port
Development of additional link road via
6 3.1.6 124
Belpada
7 EPZ setup on port land 3.1.7 126
Establishment of an evacuation road via
8 3.1.8 128
EPZ
Dredging first phase for main and JNPT
9 3.1.9 130
channel
10 Establishment of a Dronagiri link road 3.1.10 132
Establishment of 4th container terminal –

11 3.1.11 134
phase 1
Development of road linking port to
12 3.1.12 136
highways
215
Exhibit 14.0.2 : Infrastructure creation projects
Establishment of link road to 4th

13 3.1.13 138
container terminal
14 Six laning of NH 4B 3.1.14 140
Sorting Yard to reduce Mixed trains and 3.1.15
15 development of processes and systems 142
between the port and the sorting yard
Marine Chemical Terminal - 1 new berth 3.1.16
16 144
of 300 m
Development of 56 Hectares of land for
17 3.1.17 146
CFS operations
Development of 50 Hectares of empty
18 3.1.18 148
yard
Development of new rail track outside
19 3.1,19 150
the port
Establishment of 4th container terminal –
20 3.1.20 152
phase 2
216
Exhibit 14.0.3 : Process improvement initiatives
Increase shallow berth moves to 16

1 3.2.1 154
moves per hour
2 Increasing RMQC moves to 24 per hour 3.2.2 155
Automation between gate and terminal
3 3.2.3 156
operators
Increase in productivity of RMGCs by
4 3.2.4 158
increasing moves to 20 per hour
Automation between sorting yard and
5 3.2.5 159
port operators
217
Exhibit 14.0.4 : Organizational improvements
Strengthening of the marketing

1 3.3.1 161
capabilities
Strengthening of project management
2 3.3.2 162
capabilities
Development of maintenance SLA for
3 3.3.3 163
roads
218
14.1 Infrastructure creation Action plan
14.1.1 Establishment of 32 hectares of CFS
Project Manager: Objective

PPD Department Establishment of 32 hectares of CFS (2008-09)
Advisory Managers: Key Modules

Representative Finance, Initiation of project activities (April 1st 2007)
Representative Operations, Hiring mechanism for Project Management Consultant (PMC) (60 days)
Representative Estate
Board approval for hiring of PMC and consultant (30 days)
Obtaining requisite permissions/ clearances (126 days)

~ 22 months* • Approvals granted for PMC and consultant for Request for Qualification (RFQ),
Request for Proposal (RFP) and Expression of Interest (EOI) preparation for selection
* Not determinable– can of developer
vary significantly, only
JNPT timeline
Milestones
• Board approval for hiring of
PMC and consultant
• Obtaining required permission
and clearances
• Completion of development by
contractor
developer
• Beginning of comm. operations
Contd.
219
Key modules (contd.)
Phase 1a (in parallel) Phase 1b (in parallel)

Invitation of bids/Selection of contractor (60 days) RFQ stage (90 days)
Development phase (360 days) RFP stage till selection of developer (180 days)
• Leveling of land Construction/Development phase (by developer) * (180
• Development of roads days)
• Establishment of utility networks • Purchase of required equipment
• Setup/construction of processing facilities
• Fine-tuning phase
• CFS begins commercial operations
• Prerequisites: None
• Linkages: None
Key Risks
• Delay in obtaining requisite permissions/ clearances will impact timelines and project cost
• Increase in development costs of land / delays in development can substantially reduce JNPT’s
return
* - Not part of JNPT timeline
220
14.1.2 Creation of common user pipelines

Operations Department Creation of common user pipelines (2007-08)

Representative PPD, Internal discussions with BOT developer, JNPT and tank farm operators (30 days)
Arriving at a price point for common pipeline usage (30 days)
Creation of pipeline extensions from pipeline to various tank farms (120 days)

~ 6 months* Beginning of commercial operations
* Not determinable– can Prerequisites / Linkages

vary significantly,
Milestones • Linkages: None
• Approval of Business plan
• Acceptance of price point
• Completion of extensions to Key Risks
invidividual tank farms
• Beginning of comm. operations • Delay in arriving at common price point will impact timelines and flow of traffic through the
current liquid terminal
Contd.
221
14.1.3 Establishment of 50 hectares of empty yard

PPD Department Establishment of 50 hectares of empty yard (2008-09)

Representative Operations, Hiring mechanism for PMC (60 days)

~ 22 months* • Approvals granted for PMC and consultant for RFQ,RFP,EOI preparation for
selection of developer
JNPT timeline
Milestones
PMC and consultant
and clearances
contractor
developer
Contd.
222

• Empty yard begins commercial operations
• Linkages: None
Key Risks
return
223
14.1.4 Extension of 330 m for container operations
Project Manager:
PPD Department Objective
330 m extension for container operations (2009-10)
Advisory Managers:
Representative Finance, Key Modules
Representative Operations,
Representative Estate Initiation of project activities (April 1st 2007)
Representative NSICT Invitation for appointment of consultant for DPR (30 days)
• Framing of TOR
Bid period for consultant (45 days)

~ 15 months* Receipt and scrutiny (45 days)
• Scrutiny and approval of board
• Scrutiny and approval of government
JNPT timeline Development of DPR (120 days)
• Identification of facilities and cost estimates
Milestones
• Development of DPR • Identification of revenue sharing mechanism
• Grant of required permission Board approval to DPR and estimates (30 days)
and clearances Obtaining requisite permissions/ clearances (126 days)
• Proposal to government for sanction expenditure for port (PIB)
developer
• Beginning of comm. operations • Government approval to estimate (CCEA)
• Simultaneously approval granted for consultant for MCA preparation
Contd.
224
14.1.4 Extension of 330 m for container operations
Preparation of MCA by consultant and signing (60 days)

Construction/Development phase (by developer) * (420 days)
• Purchase of required equipment
• 330 m begins commercial operations
• Linkages: None
Key Risks
• Delay in obtaining requisite permissions/ clearances will impact timelines and project cost and
affect port’s ability to handle traffic
• Inability to arrive at an effective revenue sharing agreement might hamper the 330 m extension
225
14.1.5 Establishment of grade separators
Objective
Project Manager: Establishment of an grade separators (2009-10)
PPD Department
Key Modules
Advisory Managers:
Development of DPR (90 days)
Identification of parties involved in setting up Special purpose vehicle
Identification of investment details by party as well as timelines and execution authority

~ 8 months* Identification of possible revenue streams (such as tolling)
Details of project including acquisition of land, area demarcated for the same etc
Obtaining requisite permissions/ clearances for setting up of SPV(126 days)
JNPT timeline • Identification of team from port responsible for all negotiations with other organizations
• Identification of team from port to liaison with ministry/various agencies to ensure
Milestones
• Development of DPR clearance on schedule
• Grant of clearance/permission • Applying for requisite governmental permission (Ministry of Shipping, Transport and
• Setting up of SPV Highways)
• Grade separators made • Applications for necessary clearances from other government agencies as well as utility
operational
companies
Setting up of SPV (30 days)
Drafting of MoU with all organizations involved
Signing of MoU to bring SPV into existence
Paying out of funds to SPV Contd.
226
14.1.5 Establishment of grade separators
Development phase * (420 days)

• Leveling of land
• Development of road
Operational phase *
Setting up of tolling facilities
Regular operational maintenance
• Linkages: Development of FTZ would determine traffic flow through the road
Key Risks
• Failure in acquiring land for the creation of separators could affect project timeline and impact
evacuation of traffic
227
14.1.6 Establishment of an additional link road via Belpada
Objective
Project Manager: Establishment of an additional link road via Belpada for evacuation from JNPT (2009-
PPD Department 10)
Key Modules
Advisory Managers:

Milestones
• Road made operational • Applications for necessary clearances from other government agencies as well as utility
companies
228
14.1.6 Establishment of an additional link road via Belpada
Development phase (420 days)

Operational phase *
Key Risks
• Failure in acquiring land outside port boundaries by other agencies could affect project timeline
and impact evacuation of traffic
229
14.1.7 Establishment of EPZ at JNPT

PPD Department Establishment of free trade zone/ export processing zone to retain traffic at JNPT (2009-10)

Representative Operations, Invitation for appointment of consultant for DPR (30 days)
• Framing of TOR

* Not determinable– can • Scrutiny and approval of government
• Identification of potential industries/ companies for leasing of land
Milestones • Identification of strategy to attract industries to setup facilities at the EPZ
• Development of DPR
• Development of DPR for requisite clearances including leasing details and cost estimates
• Govt. approval to DPR and
estimates • Preparation of tender for hiring PMC as well as detailed engineering designs
• Selection of PMC, Consultant Board approval to DPR and estimates (30 days)
• Completion of development by Obtaining requisite permissions/ clearances (126 days)
contractor
• Proposal to government for sanction expenditure for port (PIB)
developer • Government approval to estimate (CCEA)
• Beginning of comm. operations • Simultaneously approvals granted for PMC and consultant for RFQ,RFP,EOI preparation
for selection of developer
230
14.1.7 Establishment of EPZ at JNPT

• FTZ begins commercial operations
• Linkages: Completion of development of additional link road via Belpada would be required for
evacuation from FTZ. The evacuation road via EPZ would need to be completed as well
Key Risks
• Slow off take of land on lease significantly increases JNPT’s period of involvement and reduces
its return
return
231
14.1.8 Establishment of evacuation road via EPZ
Objective
Project Manager: Establishment of an evacuation road via EPZ (2009-10)
PPD Department
Key Modules
Advisory Managers:
Representative Finance, Initiation of project activities (October 1st 2007)
Cost estimates for construction

Hiring of contractor (45 days)
• Development of criteria for selection
JNPT timeline • Invitation for bids
• Selection of contractor
Milestones Development phase (420 days)
• Hiring of contractor
• Completion of development
• Beginning of commercial
Operational phase
operations
• Regular operational maintenance
Contd.
232
14.1.8 Establishment of evacuation road via EPZ
Key Risks
• Failure in acquiring land could affect project timeline and impact evacuation of traffic
233
14.1.9 First stage of dredging

PPD Department Dredging to depth of 12.5 m in channel (2009-10)

Representative Operations, Dredging phase (720 days) *
• Completion of dredging phase

~ 24 months*

JNPT timeline
Milestones
• Completion of dredging
activities
* - Dredging contract is expected to be awarded by Dec 31st 2006 with dredging starting
in March 2007, sanction from govt. has already been awarded
234
14.1.9 First stage of dredging
• Linkages: None
Key Risks
• Delay in completion of dredging activities will impact the ability of port to handle larger share of
traffic in Europe- Asia and may reduce market share
235
14.1.10 Establishment of Dronagiri link road
Objective
Project Manager: Establishment of an Dronagiri link road (2009-10)
PPD Department
Key Modules
Advisory Managers:
Representative Finance, Initiation of project activities (October1st 2007)

Operational phase
operations
Contd.
236
14.1.10 Establishment of Dronagiri link road
• Linkages: None
Key Risks
237
14.1.11 Establishment of 4th container terminal – phase 1
Project Manager:
4th Container terminal Phase 1 (2010-11)
Advisory Managers:
Representative BPCL Invitation for appointment of consultant for DPR (30 days)
• Framing of TOR

JNPT timeline Development of Finalized DPR (120 days)
• Identification of construction mechanism
Milestones
• Development of DPR • Identification of facilities and cost estimates
• Obtaining required permission • Identification of revenue sharing mechanism
and clearances Board approval to DPR and estimates (30 days)
• Signing of MCA
BOT developer • Proposal to government for sanction expenditure for port (PIB)
Contd.
238
RFQ stage (90 days)

RFP stage till selection of developer/ Signing of MCA (180 days)
• Prerequisites: Establishment of Dedicated freight corridor for attracting northern traffic

• Linkages: Link road to 4th container terminal
Key Risks
• 4th container terminal may not be able to attract traffic from the north if DFC is not in place in
time
239
14.1.12 Road linking port and highways
Objective
Project Manager: Establishment of an road linking the port to highways (2010-11)
PPD Department
Key Modules
Advisory Managers:

• Completion of road
development
Operational phase
operations
Contd.
240
14.1.12 Road linking port and highways
• Linkages: None
Key Risks
241
14.1.13 Establishment of link road to 4th container terminal
Objective
Project Manager: Establishment of a link road to 4th container terminal (2010-11)
PPD Department
Key Modules
Advisory Managers:

Operational phase
operations
Contd.
242
14.1.13 Establishment of link road to 4th container terminal
• Linkages: Traffic flow on this road will be linked to completion of 4th container terminal
Key Risks
243
14.1.14 Six laning of NH 4B
Objective
Project Manager: 6 laning of NH 4B (20010-11)
PPD Department
Key Modules
Advisory Managers:

Milestones
• Road beginning commercial • Applications for necessary clearances from other government agencies as well as utility
operations
companies
244
14.1.14 Six laning of NH 4B
Development phase * (420 days)

Operational phase *
Key Risks
• Failure in acquiring land outside port boundaries by other agencies could affect project timeline
and impact evacuation of traffic
245
14.1.15 Sorting yard for rail operations
Objective
Project Manager: Establishment of a sorting yard (2010-11)
PPD Department
Key Modules
Advisory Managers:
Representative Operations Development of DPR (45 days)

~ 17 months* Identification of possible revenue streams (such as charges for handling CFS containers)
• Procurement of equipment
• Development of tracks
Operational phase
operations
Contd.
246
14.1.15 Sorting yard for rail operations
• Linkages: None
Key Risks
• Delay in setting up of sorting yard will impact the handling of containers in the port and lead to
increase in number of mixed trains
247
14.1.16 Establishment of marine chemical berth
Project Manager:
Establishment of Marine chemical berth (2011-12)
Advisory Managers:
Representative BPCL Invitation for appointment of consultant for DPR (30 days)
• Framing of TOR

Milestones
• Signing of MCA
developer • Proposal to government for sanction expenditure for port (PIB)
Contd.
248
14.1.16 Establishment of marine chemical berth
RFQ stage (90 days)

• Prerequisites: Shifting of BPCL jetty as part of creation of 4th container terminal

• Linkages: None
Key Risks
249

PPD Department Establishment of 56 hectares of CFS (2012-13)


JNPT timeline
Milestones
PMC and consultant
and clearances
contractor
developer
Contd.
250

• CFS begins commercial operations
• Linkages: None
Key Risks
return
251

PPD Department Establishment of 50 hectares of empty yard (2012-13)


JNPT timeline
Milestones
PMC and consultant
and clearances
contractor
developer
Contd.
252

• Empty yard begins commercial operations
• Linkages: None
Key Risks
return
253
14.1.19 Additional rail track outside port
Objective
Project Manager: Establishment of a additional rail track outside port (2014-15)
PPD Department
Key Modules
Advisory Managers:
Representative Estate Development of DPR * (90 days)
Representative Operations

Identification of possible revenue streams (such as charges for handling CFS containers)
~ 17 months*
Hiring of contractor * (45 days)
* Not determinable– can • Development of criteria for selection
vary significantly • Invitation for bids
Milestones Development phase * (420 days)
• Development of DPR • Leveling of land
• Hiring of contractor • Procurement of equipment
• Development of tracks
operations Operational phase *
Contd.
* - Not part of JNPT timeline as development of rail track is under
purview of Indian railways
254
14.1.19 Additional rail track outside port
• Linkages: Establishment of sorting yard
Key Risks
• Delay in setting up of additional track will impact the handling of containers in the port and limit
traffic to the 4 container terminals
255
Project Manager:
4th Container terminal Phase 2 (2014-15)
Advisory Managers:
Invitation for appointment of consultant for DPR (30 days)
• Framing of TOR

Milestones
• Signing of MCA
developer • Proposal to government for sanction expenditure for port (PIB)
Contd.
256
RFQ stage (90 days)

• Linkages: The set up of the additional rail track will be imperative for traffic to be efficiently
handled at the 4th container terminal phase 2.
Key Risks
257
14.1.21 Creation of emergency berth

Marine Department Establishment of an emergency berth (2011-12)

Representative Operations, Invitation for appointment of consultant for DPR (30 days)
Representative PPD
• Framing of TOR

* Not determinable– can • Scrutiny and approval of government
• Development of DPR for requisite clearances including cost estimates
• Details of project including area, construction mechanism
Milestones • Preparation of tender for hiring PMC as well as detailed engineering designs
Board approval to DPR and estimates (30 days)
• Govt. approval to DPR and
estimates Obtaining requisite permissions/ clearances (126 days)
• Selection of PMC • Proposal to government for sanction expenditure for port (PIB)
• Completion of development by • Government approval to estimate (CCEA)
contractor
• Simultaneously approvals granted for Project management consultant (PMC)
• Beginning of operations
258
14.1.21 Creation of emergency berth
Invitation of bids/Selection of contractor (90 days)

Development phase (420 days)
Purchase of required equipment
Setup/construction of facilities
Fine-tuning phase
Emergency berth begins operation
• Linkages: None
Key Risks
• Increase in development costs of berth vs. utilization expected could significantly impact viability
of project and needs to be carefully analysed
259
14.2 Process improvement Action plan
14.2.1 Increasing shallow berth moves to 16 per hour
Project Manager:
Operations department Objective
Increasing shallow berth moves to 16 per hour (2008-09)
Advisory Managers:
Representative PPD,
Representative Estate Initiation of project activities (October 1st 2008)
Identification of requirements and estimate of construction costs (30 days)
Board approval to estimates and shifting (30 days)

~ 6 months* • Development of criteria for selection
• Invitation for bids
* Not determinable– can • Selection of contractor
JNPT timeline Operations / Shifting phase * (90 days)
Shifting of RMQC from container berth
Milestones
Fine-tuning of operations
• Shifting of equipment Beginning of operations
• Linkages: None
Key Risks
• Delay in shifting equipment will impact the port’s ability to handle traffic in the initial
years of the plan period
260
14.2.2 Increasing RMQC moves to 24 per hour
Project Manager:
Increasing main berth container moves to 24 per hour (2009-10)
Advisory Managers:
Representative PPD,
Board approval to estimates (30 days)

~ 6 months*
* Not determinable– can • Invitation for bids
vary significantly, only • Selection of contractor
JNPT timeline
Operations phase * (90 days)
Milestones Procurement of new equipment
• Hiring of contractor Installation of new equipment
• Shifting of equipment Fine-tuning of operations
Beginning of operations
• Linkages: None
Key Risks
• Delay in increasing moves per hour will impact the port’s ability to meet market
demands
261
14.2.3 Automation between gate and terminal operators
Project Manager:
IT(MS) Department Objective
Automation between gate and terminal operators (2008-09)
Advisory Managers:
Representative PPD Invitation for appointment of consultant for estimating requirements (30 days)
• Framing of requirements

Receipt and scrutiny (45 days)
~ 23 months*
• Scrutiny and approval of port
* Not determinable– can Development of requirements and estimate (90 days)
JNPT timeline
• Identification of automation requirements
• Identification of automation/ IT estimates
Milestones • Identification of structure to implement automation
• Hiring of consultant
Board approval to requirements and estimates (30 days)
• Board approval of estimates
• Hiring of firm to deploy Hiring of IT services firm to implement automation (45 days)
automation solution • Development of criteria for selection
• Deployment of automation • Invitation for bids
solution
Development of IT solution for automation in the port, terminals and gates (400 days)
• Development of comprehensive automation solution
• Deployment of solution in port
• Training of port personnel
• Fine-tuning post deployment
262
14.2.3 Automation between gate and terminal operators
• Linkages: None
Key Risks
• Delay in deployment of solution might lead to congestion at port

• Lack of adequate training of port personnel will render solution irrelevant
263
14.2.4 Increasing RMGC moves to 20 per hour
Project Manager:
Increasing RMGC moves to 20 per hour (2009-10)
Advisory Managers:
Representative PPD,
Beginning of process --- October 2013 ----

Board approval to estimates (30 days)
~ 6 months*
* Not determinable– can • Development of criteria for selection
JNPT timeline
Milestones Operations phase * (90 days)
• Hiring of contractor Procurement of new equipment
• Shifting of equipment
Installation of new equipment
Fine-tuning of operations
Prerequisites
Beginning of operations
/ Linkages
• Linkages: None
Key Risks
• Delay in increasing moves per hour will impact the port’s ability to handle transportation
of containers by rail
264
14.2.5 Automation between sorting yard and port
Project Manager:
IT(MS) Department Objective
Automation between sorting yard and port (2013-14)
Advisory Managers:
Representative PPD Invitation for appointment of consultant for estimating requirements (30 days)
• Framing of requirements

• Scrutiny and approval of port
* Not determinable– can Development of requirements and estimate (90 days)
JNPT timeline • Identification of automation requirements
• Identification of automation/ IT estimates
Milestones
• Identification of structure to implement automation
• Hiring of consultant
• Board approval of estimates Board approval to requirements and estimates (30 days)
• Hiring of firm to deploy Hiring of IT services firm to implement automation (45 days)
automation solution • Development of criteria for selection
• Deployment of automation
solution
265
14.3 Organizational improvement Action plan
14.3.1 Strengthening of marketing dept.
Project Manager:
Administration/HR Objective
department
Strengthening of marketing dept. (2009-10)

Representative Finance,
Representative HR Initiation of project activities (April 1st 2009)
Development of Requirements for marketing dept. (120 days)
• Identification of need for marketing cell
• Identification of qualifications of personnel

~ 11 months* • Identification of no. of personnel along with pay scales
* Not determinable– can Obtaining requisite permissions/ clearances (126 days)
JNPT timeline • Proposal to government for sanction expenditure for port (PIB)
• Government approval to estimate (CCEA)
Milestones
Hiring of personnel (60 days)
• Development requirements for
marketing dept. • Hiring of adequate personnel
• Board approval to hiring • Beginning of operations of marketing cell
• Govt. approval to hiring
• Beginning of operations of
marketing cell Prerequisites / Linkages
• Linkages: None
266
14.3.2 Strengthening of project management capabilities
Project Manager:
Strengthening of project management capabilities (2009-10)
Advisory Managers:
Representative
Administration/HR Initiation of project activities (April 1st 2009)
Development of Requirements for project mgmt. (120 days)
• Identification of need for strengthening of project mgmt. capabilities
• Identification of qualifications of personnel

~ 11 months* • Identification of no. of personnel along with pay scales
JNPT timeline • Proposal to government for sanction expenditure for port (PIB)
• Government approval to estimate (CCEA)
Milestones
• Development requirements for Hiring of personnel (60 days)
project management • Hiring of adequate personnel
capabilities
• Board approval to hiring
• Govt. approval to hiring Prerequisites / Linkages
• Beginning of operations of
marketing cell • Prerequisites: None
• Linkages: None
267
14.3.2 Development of maintenance SLA for roads
Objective
Project Manager: Establishment of maintenance SLA for the roads around JNPT (2013-14)
PPD Department
Key Modules
Advisory Managers:
Identification of parties involved in the SLA
Identification of payment for services rendered

~ 6 months* Obtaining board approval for entering into SLA ( 30 days)
Development of SLA (75 days)
• Identification of team from port responsible for all negotiations with other organizations
JNPT timeline • Development of SLA in conjunction with other organizations (NHAI, PWD)
Signing of SLA (30 days)
Milestones
• Development of DPR Signing of SLA by all organizations
• Development of SLA
• Signing of SLA
• Linkages: None
Key Risks
• Delay in setting up of SLA will impact the quality of roads and cause congestion around
port
268
Annexure 1
269
Annexure 1.1
Impact of VAT and the future of CFS
z The introduction of VAT can lead to changes in the logistics and distribution industry in India. Indian retailers and
manufacturers have been following a distribution and warehousing model wherein a warehouse or distribution centre
was setup in almost every state to cater to demand.
z This was primarily done to avoid the disparate taxes that existed between states and hence movement between
states could lead to extra taxes. Large scale warehousing and distribution in India was therefore sub optimal
z However the introduction of VAT has led to the possibility of players setting up large scale distribution hubs. These
hubs would require 3PL operators or SCM personnel for their management and support. Many players international
and domestic have already entered the sector. Examples include Reliance, Tata, Mahindra and Mahindra, TVS
Group and Essar Shipping apart from this Bluedart Safexpress have also entered the logistics market
z The logistics framework near the ports would also undergo some changes as a result of the growth in the logistics
industry. It is expected that CFS would continue to play an important role however the nature of their role would
change. Currently the CFS provides custom clearance as its core service while in the future the CFS would become
an integral part of the supply chain and would take care of warehousing and distribution needs as well.
z There exists a possibility that CFSs may further move inland as road and rail connectivity improves. This has been
considered in the projections and only 50-60% of the actual CFS demand has been developed within the port. This
ensures that the CFS development within the port considers the possibility of CFS moving inland.
z CFS moving inland fundamentally depend on two issues in the Indian context –
z Availability of customs officials in areas further inland – In the Indian context where availability of customs
officials is limited, clustering of several CFS happens in areas where customs officials are available. This tends
to be in areas around the port.
z Aggregation/ De-aggregation requirements of area – JNPT’s captive hinterland of Maharashtra has a large
proportion of LCL cargo that originates or is destined for these areas. It is easier to aggregate/de-aggregate at
the port as compared to inland areas of the state. This is because CFS operators can aggregate LCL cargoes
from different parts of the state arriving at various points in time easiest at the point of departure.
270
Annexure 1.2
Detailed assessment of opportunities – Liquid cargo
Liquid traffic The forecasts for liquid traffic as shown below were used to assess the opportunity. A detailed set of forecasts
forecast are covered in Section 2.2.
Crude P OL Edible Oil/ M o lasses Chemical To tal
18.0
15.4
16.0
14.0
13.5
14.0 13.1
12.8
in Million tonnes per annum
11.1 11.4
12.0 10.7
10.1 10.4
10.0 8.6 8.8

8.3
7.8
8.0
5.2 5.5 \
6.0 4.7 5.0
3.3 3.5
4.0
2.0
0.0
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
2022-23
2023-24
2024-25
271
Annexure 1.2
Detailed assessment of opportunities – Liquid cargo
Assessment of Liquid Cargo opportunity
Strength & Weaknesses Revenue Potential

Strength z Revenue potential for liquid cargo would be Rs 10 crore by
z Has some experience in liquid cargo, but is a small player in a 2009-10 rising to Rs 30 crore by 2024-25 as per growth
market dominated by Kandla, Mumbai estimates
Weakness z These potentials are based on revenue or Rs 20/ tonne of
z Infrastructural limitations such as pipeline capacity are limiting
liquid cargo handled (in line with BOT with BPCL)
throughput
z Interaction mechanism between JNPT, tankages and jetty is
impacting throughput
z Given its limited strength in this area this parameter was z The revenue potential of the opportunity was assessed as
rated as medium low compared to other options
Growth Stability
z Liquid cargo is expected to be grow to 5.2 Mtpa by 2009-10 and is z A large percentage of growth is driven by expected crude
expected to grow to 15.3 Mtpa by 2024-25 supplies from a single supplier – ONGC and hence, risk of a
z CAGR is expected to be 11.8% from current levels till 2009-10 single customer needs to be taken into consideration
z Growth will be driven by expected crude coastal traffic of 6.5 Mtpa z POL traffic growth from the region can be expected to be
by 2024-25 stable
z The growth potential of the opportunity is above 10% and is rated z Edible oil and molasses traffic tends to be fluctuating and
as medium to high cannot be considered to be stable traffic
z From a stability of traffic perspective, the overall rating is
medium
Possible Projects/actions required:
• Infrastructure upgradation such as replacement of pipelines and hoses to improve throughput
• Dredging at liquid berths of BPCL jetty to service bigger vessels
• Setting up of 3rd liquid cargo berth to handle crude traffic
• Improving dwell times at tank farms to improve throughput
272
Annexure 1.2
Detailed assessment of opportunities – Containers
The forecasts for container traffic as shown below was used to assess the opportunity. A detailed set of forecasts
are covered in Section 2.2. The dotted line indicates the potential saturation in terms of capacity at JNPT after all
development activities are undertaken.
Container traffic forecast
30.00
25.45
25.00 24.21
22.70
21.29
19.98
20.00 18.76
17.63
16.32
14.65
15.00
13.34
Mn TEUs
12.11
11.00
9.95 10.9 Million TEU’s
10.00 8.75
7.70
6.75
5.93
5.19
4.43
5.00 3.77
3.22
2.68
0.00
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
2022-23
2023-24
2024-25
2025-26
2026-27
273
Annexure 1.2
The states that constitute JNPT's hinterland currently send significant proportions of the traffic to JNPT. With the
increase in development of other ports in the western region, it is expected these other ports will attract a portion of
northern traffic thus reducing the share coming to JNPT. The percentages of traffic expected from various states to
JNPT as shown below are arrived at from a qualitative gravity model and discussions with importers/exporters and
shipping agents.
Proportion of traffic from Hinterland to JNPT

% of current traffic of the region % of future traffic of the region
State
coming to JNPT coming to JNPT (2026-27)
Maharashtra 90 % 80 %
Uttar Pradesh 80% 40 %
Uttaranchal 80% 40 %
Delhi 75 % 40 %
Punjab 80 % 40 %
Andhra Pradesh 10 % 5%
Karnataka 37 % 5%
Gujarat 60 % 10 %
Madhya Pradesh 60 % 40 %
Others 15 -20% 15%
274
Annexure 1.2
Assessment of Container opportunity
Strength & Weakness Revenue Potential
Strength - Revenue potential is expected to be around (assuming a
JNPT has significant competencies in handling container traffic conservative Rs 2000/TEU) Rs 1100 crore in 2009-10
on a large scale Out of this the revenue from Non Maharashtra region is
Weaknesses - expected to be around Rs 345 Cr in 2009-10
JNPT will face increasing competition for northern traffic
The limited space for sea side expansion may limit the Revenue potential of the opportunity is expected to be high
opportunity
JNPT has strong competencies in this area. Despite

competition and related constraints an overall assessment
is strong.
Growth Stability
The traffic is expected to grow at a CAGR of around 11% for the Due to the development of new ports around Gujarat and new
next 20 years and more than 15% for the next 5-7 years routes and connectivity that might emerge in the future the
z The growth potential of the opportunity is above 10% and is traffic originating from Northern regions cannot be considered to
rated as medium to high be very stable
The stability of the revenues is limited due to competition and is
therefore rated as medium
Possible Projects/ Actions Required
Increase moves to 24 moves/hour by increasing wharf road and up gradation of RMQC/RTGC etc
Extension of berth
Increase in hinterland connectivity
Reduction in Gate check times through increase in automation
Dredging and increase in sea side infrastructure
Increase in terminal (4th Container Terminal) and storage area (exports and imports)
Reduction of dwell times in export and import yard
Increase in stacking at yards
Evaluation of option of barges and double stacking
Dry port setup
275
Annexure 1.2
Detailed assessment of opportunities – Transshipment
The trans-shipment opportunity was assessed by JNPT as part of the overall opportunity assessment landscape for the
vision exercise
Opportunity description
There is an export import imbalance between Mid-East Europe trade. The ships returning from Mid East are mostly
empty and this can create transshipment opportunities for JNPT. JNPT can act as the regional hub where cargo
destined for Mid East and Karachi arrives and this cargo is then transshipped via feeder vessels to its destination.
The UNESCAP model for transshipment projects around 9 Million TEU of trans-shipment traffic to be generated in
South Asia. If Europe Asia route generates around 40% (3.6 Mn TEU) of this traffic then the traffic potential for
transshipment is around 3.5 Million TEUs.
This Transshipment traffic of 3.6 Million TEUs on the Europe Asia route would be primarily distributed between ports of
Western India, Karachi and Salalah.
The transshipment traffic at the Western ports is expected to be low because of
• Distance from the Major shipping routes
• High sea side costs
276
Annexure 1.2
Transshipment traffic Comparison with competitors –

The transshipment opportunity was evaluated on two Distance from major shipping routes
dimensions. These were the distance from shipping routes and
the Sea side costs. Location w.r.t major shipping routes (Nautical
Port
Miles)
• Distances from mainline route: Ports like Salalah ,
Approx. Diversion from Europe Asia Route: 1666
Cochin and Colombo enjoy lesser deviation from
mainline shipping routes as seen alongside. JNPT Approx. Diversion from America-Far east Route
(via South Africa) : 898
• Sea Side Costs: Ports like Salalah have the advantage
of cheaper sea side tariffs as compared to JNPT Approx. Diversion from Europe Asia Route: 1849
Cochin Approx. Diversion from America-Far east Route
Due to these disadvantages JNPT may find it difficult to attract
transshipment traffic.
Colombo Approx. Diversion from America-Far east Route
Major and Secondary Shipping Routes
Salalah Approx. Diversion from America-Far east Route
(via South Africa) : ~2093
Comparison of Marine tariffs for Transshipment

Port Name Sea side Tariffs * ( in Rs)
Europe Asia Salalah 190569

route Karachi 374073
JNPT 564845
Major Route Cochin 499140

Secondary Route * Calculated for a 18000 GRT/1000 TEU ship berthing for
1 day, Assumptions detailed in annexure 3.3
277
Annexure 1.2
Assessment of Trans-shipment opportunity
JNPT's Strength & Weakness Revenue Potential

JNPT has the largest infrastructure to handle containers Revenue potential is expected to be around (assuming Rs
JNPT does not lie on any of the major shipping routes and 2000/TEU) Rs 180 Cr in 2014-15 and around Rs 120-130 Crore
transshipment from JNPT would require deviation in 2009-10
JNPT's tariffs are higher than competitor ports such as Salalah
JNPT has a draft limitation that restrict entry of vessels larger
than 12 m draft
Due to JNPT's weakness in certain areas this is rated as The revenue potential from the opportunity is above 100 Crores
low and is therefore rated as medium
Stability
Growth
The transhipment traffic depends primarily on shipping costs
The traffic is expected to grow at a CAGR of around 7 – 8% for
and any changes in tariffs of competing ports can affect the
the next 20 years in the South Asian region
stability of the revenues
z The growth potential of the opportunity is below 10% and is
Due to the unstable nature of the revenues stability has been
rated as medium
rated as medium
Projects Required
Reduction in tariffs to become competitive with international ports competing for transshipment traffic
Value added services to counter the additional cost of deviation such as speedier turn around times (at least 20-25% better than
Salalah and other ports)
Increase in infrastructure on Sea-side to accommodate larger vessels
278
Annexure 1.2
Detailed assessment of opportunities – Free trade zone/Export processing zone
Opportunity Description
• Maharashtra is one of the economic power houses of India and is a large consumption as well as production base.
Maharashtra’s strength in consumption and production can be gauged from the following:
• The Special Economic Zone ("SEZ") Policy, announced by GoI enables the creation of SEZs in the country to
provide competitive and conducive environment for exports.
• Maharashtra has more than 23,000 working factories and nearly 1 million factory workers with 94 major industrial
estates
• Maharashtra’s per capita gross output is 2.5 times the national average and per capita income is more than the
national average.
• Maharashtra contributes upto 22% of country's net value added and 30% of software.
• Maharashtra has country's highest power capacity of 14,000 MW
• Maharashtra received investment worth Rs. 1,686 billion (around USD 33 billion) and 392 foreign direct
investment proposals worth Rs 94.6 billion. UK, Italy, France, Germany and Mauritius are major investors in the
state
• One of the largest SEZs in India is being set-up in Navi Mumbai and is spread over 50 square kilometers
The growth in Maharashtra is supported by conducive policies of the Government as well as foreign direct investment
in the state. Due to these reasons there is an opportunity in Maharashtra to setup a logistics focussed processing
zone. This could be in the form of a distribution hub, EPZ, FTZ etc. The absence of any such hub in the vicinity
presently also increases the attractiveness of such an opportunity
279
Annexure 1.2
Detailed assessment of opportunities – Free trade zone/Export processing zone
Assessment of self developed FTZ/EPZ opportunity
JNPT's Strength & Weakness Revenue Potential

JNPT has inherent locational advantages on account of its The revenues that can be generated by the FTZ/EPZ are as
proximity to Mumbai follows -
JNPT has land available for expansion Storage – Rs 2.2 Cr / hectare of built up land
An FTZ/EPZ will enable end-to-end integration from Manufacturing – Rs 2.4 Cr / hectare of built up land
manufacturing to transport Utilities – Rs 0.4 – 0.5 Cr / hectare of built up land
Industrial growth in Maharashtra has been over 8% in the past 5 Revenues from 40 hectares of built up land of FTZ/EPZ would
years and is expected to grow at a higher rate than the National be around Rs 110 Crores
GDP in the future This does not include revenues that will occur due to additional
JNPT has no experience in running an FTZ/EPZ traffic attracted by such a hub.
Due to JNPT's weaknesses in this area this is rated as The revenue potential from this opportunity is above 100 Crores
medium. and is therefore rated as medium
Stability
Growth The stability of revenues from an FTZ/EPZ would depend on
The projected growth for the manufacturing sector of the growth of the region.
Maharashtra is expected to be around 8-9% over the short to Reports suggest that the growth of the region would be stable
medium term over the medium to long term
As JNPT would only get fixed revenues arising from lease Due to the stable nature of the revenues and the stable
rentals the growth has been rated as low. predictions for the hinterland this has been rated medium to
high
Projects Required
Development of connectivity between FTZ/EPZ and port
Extension of port network to the FTZ/EPZ
Development of dry port to handle traffic generated by FTZ/EPZ
280
Annexure 1.2
Detailed assessment of opportunities – Distribution hub/ logistics hub
Logistics is an Opportunity Description

industry that is Third-party logistics (3PL) or logistics outsourcing is gaining importance as more and more corporations across the
rapidly growing world, unable to manage their complex supply chains, are outsourcing logistics activities to the 3PL or logistics
in IndiIa service providers. By outsourcing logistics activities, corporations are able to not only concentrate on their core
business operations, but also achieve cost-efficiency and improve delivery performance and customer satisfaction.
The 3PL revenue around the world was $141 billion in 2003, and it is expected to touch $300 billion in 2006.
The 3PL market across the world is increasing at a rapid rate. According to Armstrong & Associates, the world 3PL
revenues in 1992, 1996 and 2000 were $10 billion, $25 billion and $56 billion respectively. According to another
research firm IDC, the 3PL revenue was $141 billion in 2003, and it will touch $300 billion in 2006 growing at a
compounded annual rate of 17%
The largest market is the U.S., which was about $80 billion in 2003 accounting for nearly 60% of the world market.
The 3PL market in India is least developed and highly fragmented. However, there is an immense potential for growth
of 3PL in India, about 20% per annum, and if the logistics cost can be brought down from the current level of 13% of
GDP to 8.7% (level in the U.S.), the savings would be around $20 billion resulting in a potential 4.3% cut in prices of
Indian goods globally making them more competitive. The Indian logistics industry is currently valued at Rs 60,000
crore and contributes 13% to the country’s GDP.
A survey conducted by Frost & Sullivan estimates the logistics market in India at $298.7 million in 2003 or 0.48% of
the logistics cost in that year5. Compare this figure with 7% across the world and 9% in the U.S. considering a GDP
of over $10 trillion and 8.7% of the GDP being the logistics cost.
The 3PL market in India is poised to grow at over 20% compared to the average world growth rate of 10%7. Some of
the large Indian corporates such as Reliance, Tata, Mahindra and Mahindra, TVS Group and Essar Shipping have
already forayed into the logistics business. Initially these corporates formed divisions to handle internal logistics, but
sensing the potential of the market, they have started offering logistics solutions to other Indian corporates and have
already turned these logistics divisions into profit centres8. logistic services focussed on container trade are expected
to grow at a rate exceeding 20% annually
Some large express cargo and courier companies such as Transport Corporation of India Ltd. (TCIL), Gati,
Safexpress and Blue Dart have also started offering 3PL services. Owing to the large asset base and distribution
networks that are already put in place, it was just a matter of time for these companies to venture into the logistics
business.
281
Annexure 1.2
Drivers of growth for the logistics industry are -

• Indian firms increasingly realize the importance of reducing cost and staying competitive in the world market.
One of the means of reducing cost is through outsourcing logistics, which also improves delivery performance
and customer satisfaction.
• The Indian GDP is expected to grow steadily at 6% compared to the world GDP growth rate of 3%. This
eventually will translate into more outputs and more demand for specialized logistics services.
• The Indian Government has focused on infrastructure development. One of the initiatives is the golden
quadrilateral project of the National Highway Development Programme, which will connect all the four metros
and the East-West and North-South corridors. Once completed, it will give a boost to the road transportation
network in India.
• The Indian Government is working towards a uniform VAT regime. Once implemented, it will enable the 3PL
providers to consolidate the warehousing facilities currently maintained in different states bringing in economies
of scale.
Logistics opportunities that can be capitalized on from JNPT's perspective are

• Distribution hub – Setting up of a inland distribution centre/ consolidation centre to serve needs of hinterland
• Logistics hub – Attract specific industries by development of logistics facilities such as warehousing, packaging,
distribution and assembly
282
Annexure 1.2
JNPT as a distribution Hub

There will be a need for large distribution hubs
in the future and Maharashtra is ideally suited to
develop distribution hubs:
• Introduction of VAT and removal of
several inter-state taxes will lead to a
need for several large Distribution centers
• Maharashtra is well positioned to serve
as a distribution hub that can serve the
regional hinterland effectively
These two factors together provides JNPT with

an opportunity to serve as an entry port for
imports into India as seen alongside.
283
Annexure 1.2
Supply Chain of Importers in USA
Globally industries have set up Import Distribution centers (IDC) close to ports. Importers in US have an import
processing centre near the port which further distributes the goods to various regional distribution centers in the country
above.
These IDC’s function primarily as
• Warehouses
• Destuffing Centers
JNPT has a locational advantage to serve as an IDC and, with the entry of players such as Walmart and the projected
boom in the retail segment (Reliance etc), can evaluate opportunities in developing IDC near the port which will help in
• Generating Revenues
• Retaining and attracting traffic
284
Annexure 1.2
Assessment of distribution hub opportunity
Revenue Potential
JNPT's Strength & Weakness Estimated revenue potential for land used for distribution could
JNPT has a locational advantage to serve as a distribution hub be Rs 2.2* Crores per built up hectare of land.
JNPT can make land available (670 hectares) to exploit such an Assuming a 40 hectare built up area the revenue could around
opportunity Rs 80 Crores
JNPT lies close to major consumption centers such as This does not include revenues that will occur due to additional
Maharashtra traffic attracted by such a hub.
*This could be higher incase JNPT develops and executes the
Due to JNPT's inherent advantages, the strengths in the hub itself instead of leasing land to a third party
opportunity were rated as High The revenue potential from this opportunity is above 100
Crores and is therefore rated as medium
Stability
Growth
The revenue is expected to be stable as it is directly related to
Although the growth rate of the logistics industry is high JNPT's
India’s export and import trade which is expected to be stable
revenue from such an opportunity would be driven by rentals
over the medium term
and therefore would be fixed in nature.
Due to the stable nature of the revenues and the stable
Due to the fixed nature of the revenues the growth has
predictions for the hinterland this has been rated medium
been rated as low
to high
Projects Required
Development of land with utilities
Tie up with 3PL and directly with large importers (retailers etc) and specific industries such as machinery/ textiles.
Increase in automation – Port net extended to the warehouse
Rail and road connectivity to the warehouse
Bonded warehousing setup within the facility
285
Annexure 1.2
JNPT could develop a logistics hub near the port, the

drivers for the logistics hub are the same as that for
Distribution Hub
distribution hub. However the logistics hub would be
broader in its scope by encompassing warehousing,
distribution, packaging and assembly.
Warehousing
Due to its broader nature JNPT can target specific
industries and retain their traffic. Some of the industries
that are expected to witness a growth in export/imports
Logistics Hub
are: Distribution
Machinery
FTZ
•
• Textiles
• Consumer goods Packaging
• Food processing
These industries can be targeted by JNPT to generate
captive traffic.
Assembly
Similarly, JNPT can attract and retain northern traffic by
introducing value added services for specific industries in
the north (automobile, textiles etc) .
Manufacturing
286
Annexure 1.2
Distriparks at the Port of Rotterdam as seen below are advanced logistics parks having -
Case Study: Value
added Services – • Facilities for distribution operations at a single location close to the cargo terminals
Distriparks at Port
• Multimodal transport facilities for transit shipment
of Rotterdam
• Latest information and communications technology
Distriparks offer broadly two sets of services -
• Warehousing and forwarding facilities (including storage/stuffing/stripping of containers)
• Value added services – processing of goods according to specific customer and country-of-destination
requirements, packing and re-packing, labeling and assembly, sorting and invoicing
Trade, distribution and marketing centres (TDMCs) Distriparks in Rotterdam

Size
Distriparks
In operation from (in 1000 sq. Focus areas Prominent Clients
m)
Eemhaven Storage & Maersk Logistics,
Distripark 1989 237 distribution of high Nippon Express, VAT
quality products Logistics, Mitsui Soko
Warehousing &
Botlek Distripark Prologis en DHL/Exel ,
distribution
1990 165 Damco Maritime,
companies with a
Holland Veem
chemical focus
Maasvlakte Centralized
1st phase - 1988 848 Reebok, Epson,
Distripark warehousing and
Nippon Express,
2nd phase - 1998 1017 distribution with a
Canon
container focus
Total 2267
Source: World Bank Toolkit, Port of Rotterdam website

287
Annexure 1.2
Reebok’s state-of-the-art logistics centre in Rotterdam illustrates how a value-added service generated employment for
Case Study: Value
300 personnel and contributing $6 million in direct income was created
added services –
Alliance between
Port of Rotterdam Restructuring of Reebok’s logistics activities
and Reebok In 1995, Reebok decided that warehousing and distribution activities in Europe should be consolidated. Instead of
separate warehousing facilities, a bulk logistics facility would be established in mainland Europe to supply pick-and-
pack warehouses in the U.K. and Spain, as well as directly supply other markets in Europe
80-90% of product flow to the European market would pass through this logistics centre. After considering France and
Belgium, Reebok decided to locate the logistics centre at newly created Distripark 3 in Maasvlakte at the ocean edge of
the port property.
Why the Port of Rotterdam was selected

Reebok had a variety of reasons for choosing this site.
• Proximity to the new deepwater terminal in the port of Rotterdam with easy access to the U.K. market.
• Good supply of warehousing labour in the Rotterdam area
• Customs in the Netherlands is considered to be efficient and business friendly.
• Availability of space and interest shown by the port
The Port along with the municipality, proactively pursued Reebok and provided strong incentives to locate the facility in
Maasvlakte such as the following –
• The port funded construction of the state-of-the-art 700,000 sq. ft. logistics facility.
• Port created infrastructure to connect the facility to the adjacent container terminal
• Transport bus service in line with the plant shift system
• Dedicating a contact person to handle the needs of Reebok
Source: World Bank Toolkit, Port of Rotterdam website

288
Annexure 1.2
Assessment of logistics hub opportunity
Revenue Potential
JNPT's Strength & Weakness Estimated revenue potential for land used for distribution could
JNPT has a locational advantage to serve as a distribution hub be Rs 2.5* Crores per built up hectare of land.
There is availability of land (670 hectares) for development at Assuming 40 hectare built up area the revenue is around Rs 90
JNPT Crores
JNPT lies close to major consumption as well as production This does not include revenues that will occur due to additional
centers such as Mumbai, Nagpur etc traffic attracted by such a hub.
*This could be higher incase JNPT develops and executes the
logistics hub itself instead of leasing land to a third party
Due to JNPT's strength in the opportunity it is rated as High The revenue potential from this opportunity is above 100
Crores and is therefore rated as medium
Stability
Growth
This could also be a stable revenue as it is directly related to
Although the growth rate of the logistics industry is high JNPT's
India's export and import trade which is expected to be stable
revenue from such an opportunity would be driven by rentals
over the medium term
and therefore would be fixed in nature.
Due to the stable nature of the revenues and the stable
Due to the fixed nature of the revenues the growth has
predictions for the hinterland this has been rated medium
been rated as low
to high
Projects Required
Development of land with utilities
Tie up with 3PL and directly with large importers (retailers etc) and specific industries such as machinery/ textiles
Increase in automation – Port net extended to the warehouse
Rail and road connectivity to the warehouse
Bonded warehousing setup within the facility
289
Annexure 1.3
Traffic from various regions
Imports from various regions in India

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Uttaranchal 1.38% 1.36% 1.34% 1.32% 1.30% 1.29% 1.28% 1.26% 1.25% 1.24% 1.24% 1.23%
Uttar Pradesh 11.66% 11.69% 11.72% 11.75% 11.77% 11.81% 11.82% 11.82% 11.83% 11.85% 11.88% 11.86%
Rajasthan 2.27% 2.28% 2.29% 2.30% 2.30% 2.31% 2.31% 2.31% 2.31% 2.31% 2.32% 2.32%
Punjab 2.21% 2.17% 2.13% 2.10% 2.06% 2.03% 2.01% 2.00% 1.98% 1.96% 1.93% 1.93%
Maharashtra 19.68% 19.78% 19.87% 19.96% 20.05% 20.13% 20.18% 20.24% 20.30% 20.36% 20.41% 20.43%
Madhya Pradesh 3.39% 3.38% 3.37% 3.37% 3.36% 3.35% 3.34% 3.34% 3.33% 3.32% 3.31% 3.31%
Kerala 1.83% 1.81% 1.79% 1.76% 1.74% 1.73% 1.71% 1.70% 1.68% 1.67% 1.66% 1.65%
Haryana 5.55% 5.61% 5.67% 5.73% 5.79% 5.82% 5.87% 5.92% 5.98% 6.00% 6.03% 6.07%
Karnataka 4.99% 4.95% 4.92% 4.89% 4.87% 4.83% 4.83% 4.82% 4.81% 4.79% 4.77% 4.78%
Himachal Pradesh 0.74% 0.74% 0.74% 0.74% 0.73% 0.73% 0.73% 0.73% 0.73% 0.73% 0.73% 0.73%
Gujarat 16.15% 16.24% 16.32% 16.39% 16.45% 16.55% 16.56% 16.58% 16.60% 16.66% 16.72% 16.68%
Delhi 0.98% 0.98% 0.98% 0.98% 0.99% 0.99% 0.99% 0.99% 0.99% 0.99% 1.00% 1.00%
Chandigarh 0.06% 0.06% 0.06% 0.06% 0.06% 0.06% 0.06% 0.06% 0.06% 0.06% 0.06% 0.06%
Andhra Pradesh 7.11% 7.02% 6.94% 6.86% 6.78% 6.72% 6.67% 6.62% 6.57% 6.52% 6.48% 6.46%
Others 22.01% 21.94% 21.86% 21.80% 21.74% 21.66% 21.64% 21.61% 21.58% 21.54% 21.49% 21.50%
Total Imports (Mn
TEUs)* 1.58 1.86 2.25 2.73 3.32 4.02 4.72 5.54 6.49 7.58 8.86 10.03
* Does not include empties and transhipment
290
Annexure 1.3
Imports from various regions in India

2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27
Uttaranchal 1.23% 1.23% 1.22% 1.22% 1.22% 1.22% 1.23% 1.23% 1.23% 1.23% 1.23%
Uttar
Pradesh 11.87% 11.88% 11.90% 11.93% 11.91% 11.89% 11.87% 11.85% 11.83% 11.81% 11.79%
Rajasthan 2.31% 2.31% 2.32% 2.32% 2.32% 2.32% 2.31% 2.31% 2.31% 2.31% 2.31%
Punjab 1.93% 1.92% 1.91% 1.89% 1.90% 1.91% 1.92% 1.93% 1.94% 1.95% 1.96%
Maharashtra 20.45% 20.47% 20.48% 20.50% 20.49% 20.48% 20.46% 20.45% 20.44% 20.43% 20.41%
Madhya
Pradesh 3.30% 3.30% 3.29% 3.29% 3.29% 3.30% 3.30% 3.30% 3.31% 3.31% 3.32%
Kerala 1.65% 1.65% 1.64% 1.64% 1.64% 1.64% 1.64% 1.65% 1.65% 1.65% 1.65%
Haryana 6.08% 6.08% 6.08% 6.06% 6.07% 6.08% 6.09% 6.10% 6.11% 6.12% 6.13%
Karnataka 4.78% 4.77% 4.76% 4.74% 4.75% 4.76% 4.78% 4.79% 4.80% 4.81% 4.82%
Himachal
Pradesh 0.73% 0.73% 0.73% 0.73% 0.73% 0.73% 0.72% 0.72% 0.72% 0.72% 0.72%
Gujarat 16.70% 16.72% 16.76% 16.82% 16.78% 16.74% 16.70% 16.67% 16.63% 16.59% 16.55%
Delhi 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%
Chandigarh 0.06% 0.06% 0.06% 0.06% 0.06% 0.06% 0.06% 0.06% 0.06% 0.06% 0.06%
Andhra
Pradesh 6.44% 6.43% 6.41% 6.40% 6.41% 6.42% 6.43% 6.44% 6.45% 6.46% 6.46%
Others 21.48% 21.47% 21.44% 21.41% 21.43% 21.45% 21.48% 21.50% 21.53% 21.55% 21.58%
Total Imports
(Mn TEUs)* 11.30 12.72 14.28 16.02 17.36 18.81 20.39 22.10 23.96 25.98 28.16
* Does not include empties and transshipment
291
Annexure 1.3
Exports from various regions in India

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Uttaranchal 1.49% 1.45% 1.42% 1.38% 1.35% 1.32% 1.30% 1.28% 1.26% 1.24% 1.22% 1.21%
Uttar Pradesh 10.22% 10.25% 10.29% 10.32% 10.35% 10.39% 10.40% 10.41% 10.43% 10.46% 10.48% 10.47%
Rajasthan 2.96% 3.01% 3.06% 3.10% 3.15% 3.19% 3.21% 3.24% 3.26% 3.29% 3.32% 3.32%
Punjab 3.90% 3.85% 3.79% 3.74% 3.69% 3.64% 3.61% 3.58% 3.54% 3.51% 3.47% 3.46%
Maharashtra 18.28% 18.39% 18.51% 18.62% 18.74% 18.84% 18.91% 18.99% 19.08% 19.16% 19.24% 19.27%
Madhya Pradesh 3.15% 3.18% 3.21% 3.23% 3.26% 3.29% 3.30% 3.32% 3.33% 3.35% 3.37% 3.37%
Kerala 2.53% 2.52% 2.51% 2.50% 2.49% 2.49% 2.48% 2.47% 2.46% 2.46% 2.45% 2.44%
Haryana 5.09% 5.10% 5.12% 5.13% 5.15% 5.15% 5.17% 5.19% 5.22% 5.22% 5.22% 5.25%
Karnataka 6.62% 6.61% 6.60% 6.59% 6.59% 6.58% 6.58% 6.57% 6.57% 6.57% 6.57% 6.57%
Himachal Pradesh 0.80% 0.81% 0.82% 0.83% 0.84% 0.85% 0.85% 0.86% 0.86% 0.87% 0.87% 0.87%
Gujarat 11.12% 11.14% 11.16% 11.18% 11.20% 11.23% 11.23% 11.24% 11.24% 11.26% 11.28% 11.27%
Delhi 1.35% 1.36% 1.36% 1.37% 1.37% 1.38% 1.38% 1.38% 1.39% 1.39% 1.39% 1.39%
Chandigarh 0.11% 0.11% 0.11% 0.11% 0.11% 0.11% 0.11% 0.11% 0.11% 0.11% 0.11% 0.11%
Andhra Pradesh 7.35% 7.26% 7.17% 7.09% 7.00% 6.92% 6.88% 6.82% 6.75% 6.71% 6.66% 6.63%
Others 25.02% 24.94% 24.87% 24.79% 24.72% 24.64% 24.59% 24.55% 24.50% 24.42% 24.35% 24.35%
Total Exports (Mn
TEUs)* 1.57 1.86 2.21 2.63 3.13 3.74 4.35 5.04 5.85 6.76 7.82 8.82
292
Annexure 1.3
Exports from various regions in India

2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27
Uttaranchal 1.21% 1.20% 1.20% 1.19% 1.19% 1.20% 1.20% 1.21% 1.21% 1.21% 1.22%
Uttar
Pradesh 10.48% 10.49% 10.50% 10.53% 10.51% 10.50% 10.48% 10.47% 10.45% 10.44% 10.42%
Rajasthan 3.33% 3.33% 3.35% 3.36% 3.35% 3.34% 3.33% 3.32% 3.32% 3.31% 3.30%
Punjab 3.45% 3.44% 3.43% 3.41% 3.42% 3.43% 3.44% 3.45% 3.47% 3.48% 3.49%
Maharashtra 19.30% 19.33% 19.36% 19.39% 19.37% 19.34% 19.32% 19.30% 19.28% 19.26% 19.23%
Madhya
Pradesh 3.38% 3.38% 3.39% 3.40% 3.40% 3.39% 3.38% 3.37% 3.37% 3.36% 3.35%
Kerala 2.44% 2.44% 2.44% 2.45% 2.44% 2.44% 2.44% 2.44% 2.43% 2.43% 2.43%
Haryana 5.25% 5.25% 5.23% 5.21% 5.23% 5.24% 5.25% 5.27% 5.28% 5.30% 5.31%
Karnataka 6.57% 6.57% 6.57% 6.56% 6.57% 6.57% 6.57% 6.57% 6.57% 6.58% 6.58%
Himachal
Pradesh 0.88% 0.88% 0.88% 0.89% 0.88% 0.88% 0.88% 0.87% 0.87% 0.87% 0.87%
Gujarat 11.28% 11.29% 11.30% 11.32% 11.31% 11.30% 11.28% 11.27% 11.26% 11.24% 11.23%
Delhi 1.39% 1.39% 1.39% 1.39% 1.39% 1.39% 1.39% 1.39% 1.39% 1.39% 1.39%
Chandigarh 0.11% 0.11% 0.11% 0.11% 0.11% 0.11% 0.11% 0.11% 0.11% 0.11% 0.11%
Andhra
Pradesh 6.62% 6.61% 6.59% 6.58% 6.59% 6.60% 6.61% 6.61% 6.62% 6.63% 6.64%
Others 24.33% 24.30% 24.27% 24.22% 24.25% 24.28% 24.31% 24.34% 24.37% 24.40% 24.43%
Total
Exports (Mn
TEUs)* 9.90 11.12 12.44 14.82 16.10 17.50 19.01 20.66 22.46 24.41 26.54
293
Annexure 1.4
Pipeline and Tankage details
Pipeline and Tankage details
Pipe Line Dia (in Length (in

Name of Tank Farm Total Tanks inches) Product Handled km)
18 Edible Oil/ Molasses

42 12 Base Oil 4.75
Ganesh benzoplast Ltd 6 MEG
16 CBFS
12 Edible Oil
38
10 MS/HSD/CG 5
IMC 8 Base Oil
18 Edible Oil
13 12 Edible Oil 4.5
Viraj Agro Products 8 Edible Oil /Base oil
24 WO
13
Indian Oil Tanking 24 BO 13
24 WO1
4 24 WO2 6.35
BPCL/IOCL 24 BO
Deepak Fertilizers 2 16 Acid 4.75

Bharat Shell 2 12 Base Oil 4.75
Reliance Industries 9 16 SKO/RKO/AHE/AFS 5.5

Source : Data from BPCL
294
Annexure 1.5
Environmental Impact Assessment
EIA of the 4th container terminal and MCT Environmental impact assessment of 4th container
A detailed EIA of the proposed 4th container terminal terminal and Marine chemical terminal
(Phase 1 and 2) and MCT was carried out by CES Parame
(India) Pvt. Limited in their report of 2006. The EIA Evaluation Environ Environ
of EIUs ter
was carried out by systematic identification, prediction ment ment
Importa Change
and evaluation of potential benefits of proposed Environme quality quality
activities with reference to physical, biological, cultural nce in EQ
ntal (EQ) (EQ)
and socio-economic components of the environment. units
attributes before after
A four stage process was carried out the results of (PIU)
which are shown alongside for completeness–
Identification of impact
Physical
z 333 288.40 269.60 -18.80
resources
z Prediction of impact
z Evaluation of impact
Ecological
z Environmental evaluation 267 258.40 233 -25.40
resources
As can be seen the overall environmental impact of Human

233 163.60 195.30 +32.00
proposed project activities is positive with a use values
contribution of 1.13% to the environment.
Quality of
167 122.80 144.45 +21.65
life values
Total 1000 832.90 842.35 +9.45
% Change in EIU (Total change in EQ/(EQ)

1.13%
before) * 100
295
Annexure 1.5
Environmental Impact Assessment
EIA of the 330 m extension Environmental impact assessment of 330 m extension

A detailed Environment assessment of the proposed
330 m extension was carried out by IIT Bombay in Evaluation Parame
Environ Environ
2004. The EIA was carried out by systematic of EIUs ter
ment ment
identification, prediction and evaluation of potential Importa Change
benefits of proposed activities with reference to Environme quality quality
nce in EQ
physical, biological, cultural and socio-economic ntal (EQ) (EQ)
units
components of the environment. A four stage process attributes before after
(PIU)
was carried out the results of which are shown
alongside for completeness– Physical
Identification of impact 416 345.10 320.80 -24.30
z resources
z Prediction of impact
z Evaluation of impact Ecological
250 224.50 205.50 -19.00
z Environmental evaluation resources
Human
As can be seen the overall environmental impact of 188 134.00 161.0 +27.00
proposed project activities is positive with a
use values
contribution of 0.60% to the environment.
Quality of
146 99.50 120.65 +21.15
life values
Total 1000 803.10 807.95 +4.85
% Change in EIU (Total change in EQ/(EQ)

+0.60%
before) * 100
296
Annexure 1.6
Benchmarking with international ports
Best performing international container Productivity of international ports

terminals
Crane Berth productivity
International productivity (TEU/mtr berth
TEU/m of quay
Port/Terminal (Moves/ Hour) length)
Container terminal 3 , Singapore 36 1815

2459
Hong Kong Port
Rashid &
Container terminal 8 , Jebel Ali 30 ~2500
2432
Hong Kong
Hongkong 40-50 3021
Busan, New port, South
2558 Salalah 29 2022
Korea
Pasir Panjang, Singapore, NSICT 22 2213

2247
Phase 2B JNPCT 19 ~1969 *
Deurgangz Terminal, Colombo
2319
Antwerp JCT 18 852
NSICT, Jawaharlal Nehru 2213 Colombo

SAGT 13 902
Mundra 17 720
Pipavav 17 453
* - Without shallow water berth
297
Annexure 1.7
Rail and Road Split at JNPT
Rail and road are expected to remain as the primary modes of connectivity. The traffic for JNPT would be divided
between these two modes. The Report of the Committee of Secretaries on Road Rail Connectivity of Major Ports
suggests that the average 55% of the Containers come by road and the remaining come by Rail. However, due to
JNPTs proximity to major production centers in regions of Gujarat & Maharashtra the proportion of road traffic is
expected to be expected higher. The current pressures on rail corridors also limit the proportion of rail traffic over the
short term.
Rail Road Traffic from states other than Maharashtra
It has been assumed in the model that 65% of cargo from states other than Maharashtra would come by Road and
the remaining would come by Rail. Also it is assumed that the proportion of traffic arriving by road would gradually
reduce to around 52% which is in line with the break up in the Report on Rail and Road connectivity.
Rail Road Traffic from states other than Maharashtra
The proportion of traffic arriving by road from Maharashtra at JNPT is expected to be around 90%.
Impact on JNPT
JNPT is expected to lose some share of its northern traffic to competitors and the share of Maharashtra traffic at
JNPT would increase. As a result the effect of a shift toward rail traffic from Northern areas would be limited at JNPT.
As can be seen below the proportion of traffic arriving by rail at JNPT would increase however the increase would not
be very high because it is expected that over the years proportion of Maharashtra traffic at JNPT would increase and
this traffic arrives primarily by road.
Rail to Road proportion of traffic at JNPT

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2014-15 2019-20 2024-25
Road 27.05% 27.41% 27.81% 28.02% 28.21% 28.39% 29.15% 30.22% 32.47%
Rail 72.95% 72.59% 72.19% 71.98% 71.79% 71.61% 70.85% 69.78% 67.53%
298
Annexure 1.8
Case for CFS and empty container yards on port land
z CFS and empties development through lease of port land has been envisaged owing to –
z Unavailability of space in the vicinity of JNPT owing to development of Reliance Special Economic zone. This
has created shortage of area for operators to set up CFS/empty yards
z CFS and empty yard operations can result in substantial revenues for the port in the form of leasing and revenue
shares (if agreements are entered into for the same)
z Setting up of such operations helps the port further integrate into the container handling value chain as
envisaged in the vision of the port
z In absence of CFS/empty yard operations the land is likely to be unutilized and not yield any revenues to the port
z Incase land is not made available for CFS operations, new CFS are likely to develop in remote locations and
transport of containers may lead to delays in operations. In such a scenario customs operations may also
emerge as bottlenecks
z Key issues need to be taken into consideration before leasing land for these activities. The same have been
considered while developing the integrated port development plan:
z Presence of adequate road connectivity to evacuate additional traffic from these operations
z Contract management to ensure that utilization of land by these operators is optimal. Underutilization of port land
is likely to impact port operations
299
Annexure 2
Financial statements
300
Projected Profit and Loss Accounts 1.00 2.00 3.00 4.00 5.00 6.00 7.00
In 000's 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
Revenue
Port dues 321,806 350,070 314,532 348,517 386,196 417,631 457,485 494,324 531,523
Other dues (Pilotage,berth hire) 1,125,847 1,207,842 1,094,333 1,177,572 1,313,716 1,431,975 1,581,693 1,727,153 1,878,564
Storage (at similar %age) 249,901 236,502 213,152 265,464 267,335 269,222 271,125 273,043 299,141
Wharf handling 3,311,038 3,133,506 2,824,131 3,517,237 3,542,029 3,567,028 3,592,237 3,617,657 3,963,432
Concession fee 1,226,691 2,327,433 3,261,790 3,467,658 5,301,715 6,287,387 7,065,260 7,954,640 8,909,002
Other operational income (estate) 467,934 491,330 675,702 1,380,085 1,739,465 2,106,844 2,166,897 2,758,362 2,833,282
Total operating revenue 6,703,216 7,746,683 8,383,640 10,156,533 12,550,457 14,080,089 15,134,697 16,825,179 18,414,945
Expenses
Salaries 465,638 502,889 628,611 678,900 733,212 791,869 855,219 923,636 997,527
Social charges and Pension premiums 128,066 158,297 172,895 187,603 204,556 223,122 237,664 255,606 274,179
Running costs (container, marine, estate) 1,407,831 1,521,227 1,629,918 1,844,091 1,977,088 2,108,089 2,256,458 2,411,824 2,620,172
Administrative costs 344,832 358,626 372,971 387,890 403,405 419,541 436,323 453,776 471,927
Other costs (exp on BOT) 121,476 159,861 203,515 220,493 253,412 290,240 320,568 352,590 383,792
Total operating costs 2,467,844 2,700,900 3,007,910 3,318,977 3,571,674 3,832,861 4,106,232 4,397,432 4,747,598
Operational net earnings before

depreciation, interest and tax 4,235,372 5,045,783 5,375,730 6,837,556 8,978,783 10,247,228 11,028,465 12,427,747 13,667,347
Depreciation 301,190 328,441 356,958 463,105 653,314 792,475 956,072 967,872 995,145
Net earnings before interest and tax 3,934,182 4,717,342 5,018,772 6,374,452 8,325,468 9,454,753 10,072,393 11,459,875 12,672,202
Add fin and misc income 889,794 702,513 800,865 912,986 1,040,804 1,186,516 1,352,629 1,541,997 1,757,876
Less fin and misc exp 453,582 638,678 351,214 351,214 397,834 320,134 242,434 164,734 87,034
Prior period charges 1,173 0 0 0 0 0 0 0 0
Net earnings before tax 4,371,567 4,781,177 5,468,423 6,936,224 8,968,439 10,321,136 11,182,588 12,837,138 14,343,044
Tax 202,280 1,483,040 1,693,337 2,142,484 2,764,342 3,178,268 3,441,872 3,948,164 4,408,972
Net earnings 4,169,287 3,298,137 3,775,086 4,793,739 6,204,096 7,142,868 7,740,716 8,888,974 9,934,073
Net earnings with write back of prov. 3,553,444 3,775,086 4,793,739 6,204,096 7,142,868 7,740,716 8,888,974 9,934,073
Earnings post one time appropriation for

Advance tax 2,473,444
© 2006 KPMG Advisory Services Private Limited, an 3,775,086
Indian private limited company 4,793,739
and a member firm of 6,204,096
the KPMG network of independent 7,142,868
member firms affiliated 7,740,716
with KPMG International, 8,888,974
a Swiss cooperative. All rights reserved. 9,934,073
301
Projected Profit and Loss Accounts 8.00 9.00 10.00 11.00 12.00 13.00 14.00 15.00 16.00
In 000's 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
Revenue
Port dues 572405 594932 574615 574928 575291 575793 579059 579598 580252
Other dues (Pilotage,berth hire) 2047452 2152527 2105753 2135152 2166181 2197301 2240081 2276607 2315334
Storage (at similar %age) 288117 305951 314218 322711 331437 340403 349615 359080 370829
Wharf handling 3817373 4053664 4163189 4275719 4391337 4510129 4632182 4757589 4913257
Concession fee 10370237 11009742 11529504 12103992 12712204 13357626 14182591 14827980 15549108
Other operational income (estate) 2910688 3441220 3532911 3627579 3725340 3826318 3930639 4038435 4149847
Total operating revenue 20006272 21558035 22220190 23040080 23901790 24807568 25914167 26839289 27878628
Expenses
Salaries 1077329 1163515 1256597 1570746 1696405 1832118 1978687 2136982 2307941
Social charges and Pension premiums 286134 311780 322436 332244 335254 341115 338217 331348 336020
Running costs (container, marine, estate) 2758670 2937889 3019979 2842447 2961793 3086390 3220599 3356294 3503465
Administrative costs 490804 510436 530854 552088 574171 597138 621024 645865 671699
Other costs (exp on BOT) 424985 463401 481890 459234 457900 456595 455280 454036 452425
Total operating costs 5037923 5387021 5611755 5756759 6025523 6313355 6613807 6924524 7271550

depreciation, interest and tax 14968349 16171014 16608435 17283321 17876267 18494214 19300360 19914765 20607079
Depreciation 1007909 1185183 1220488 1234845 1249777 1265306 1281456 1298252 1315720
Net earnings before interest and tax 13960441 14985831 15387947 16048476 16626490 17228907 18018904 18616512 19291359
Add fin and misc income 2003979 2284536 2604371 2968983 3384640 3858490 4398679 5014494 5716523
Less fin and misc exp 40414 545464 949504 747484 545464 343444 141424 40414 40414
Prior period charges 0 0 0 0 0 0 0 0 0
Net earnings before tax 15924006 16724903 17042814 18269975 19465666 20743954 22276159 23590592 24967468
Tax 4892746 5137820 5235101 5610612 5976494 6367650 6836505 7238721 7660045
Net earnings 11031260 11587083 11807713 12659363 13489172 14376304 15439654 16351871 17307423
Net earnings with write back of prov. 11031260 11587083 11807713 12659363 13489172 14376304 15439654 16351871 17307423

Advance tax 11031260 11587083 11807713 12659363 13489172 14376304 15439654 16351871 17307423
302
Projected Profit and Loss Accounts 17.00 18.00 19.00 20.00
In 000's 2023-24 2024-25 2025-26 2026-27
Revenue
Port dues 580818 584028 584002 583930
Other dues (Pilotage,berth hire) 2355571 2405783 2444848 2485686
Storage (at similar %age) 380862 391171 401763 412895
Wharf handling 5046190 5182774 5323113 5470608
Concession fee 16361494 17241751 18161595 19149173
Other operational income (estate) 4265020 4384104 4507260 4634652
Total operating revenue 28989954 30189612 31422581 32736944
Expenses
Salaries 2492576 2691982 2907341 3139928
Social charges and Pension premiums 340879 345932 351188 356654
Running costs (container, marine, estate) 3651081 3809844 3969475 4136445
Administrative costs 698567 726510 755570 785793
Other costs (exp on BOT) 451166 449790 448519 447237
Total operating costs 7634270 8024058 8432093 8866056

depreciation, interest and tax 21355684 22165554 22990489 23870888
Depreciation 1333887 1352780 1372429 1392864
Net earnings before interest and tax 20021797 20812774 21618059 22478024
Add fin and misc income 6516836 7429193 8469280 9654979
Less fin and misc exp 40414 40414 40414 40414
Prior period charges 0 0 0 0
Net earnings before tax 26498220 28201553 30046926 32092590
Tax 8128455 8649675 9214359 9840332
Net earnings 18369764 19551878 20832566 22252257
Net earnings with write back of prov. 18369764 19551878 20832566 22252257

Advance tax 18369764 19551878 20832566 22252257
303
Projected balance sheet 1.00 2.00 3.00 4.00 5.00 6.00 7.00
In 000's 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
Assets
Fixed assets 8,803,680 8,875,799 10,728,712 17,261,060 29,924,993 36,811,933 43,055,865 47,199,496 47,476,783
Capital assets WIP 2,000,000 5,000,000 - - - - -
Current assets 4,605,625 3,525,625 3,525,625 3,525,625 3,525,625 3,525,625 3,525,625 3,525,625 3,525,625
Total Investments 4,162,580 4,865,093 5,665,957 4,958,943 2,620,747 1,759,263 2,111,892 3,653,889 5,411,765
Investments (ST and LT) Adjusted for

Liquidation 4,162,580 4,865,093 5,665,957 4,078,943 1,319,747 406,263 758,892 2,300,889 4,058,765
Investments in SPV 0 0 0 880,000 1,301,000 1,353,000 1,353,000 1,353,000 1,353,000
Cash and bank balances including cash

accrued 6,885,178 4,578,202 3,699,510 267,916 146,276 263,687 407,843 2,611,189 9,910,098
Total assets 24,457,063 21,844,719 25,619,805 31,013,544 36,217,641 42,360,509 49,101,225 56,990,199 66,324,272
Equity and liabilities
Equity 0 0 0 0 0 0 0 0 0
Reserves & Surplus 13,854,263 16,327,707 20,102,793 24,896,532 31,100,628 38,243,497 45,984,213 54,873,186 64,807,259
Provisions 255,307 0 0 0 0 0 0 0 0
Long term loans 8,401,164 4,000,000 4,000,000 4,600,000 3,600,000 2,600,000 1,600,000 600,000 0
Short term liabilities 1,517,012 1,517,012 1,517,012 1,517,012 1,517,012 1,517,012 1,517,012 1,517,012 1,517,012
Deferred tax liabillity 429,317 - - - - - - - -
Total equity and liabilities 24,457,063 21,844,719 25,619,805 31,013,544 36,217,641 42,360,509 49,101,225 56,990,199 66,324,272
304
Projected balance sheet 8.00 9.00 10.00 11.00 12.00 13.00 14.00 15.00 16.00
In 000's 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
Assets
Fixed assets 47,450,580 64,701,166 65,082,421 65,202,124 65,173,752 65,144,783 65,115,193 65,084,957 65,054,049
Capital assets WIP 6,500,000 - - - - -
Current assets 3,525,625 3,525,625 3,525,625 3,525,625 3,525,625 3,525,625 3,525,625 3,525,625 3,525,625
Total Investments 7,415,744 9,700,279 12,304,650 15,273,633 18,658,273 22,516,763 26,915,442 31,929,936 37,646,458

Liquidation 6,062,744 8,347,279 10,951,650 13,920,633 17,305,273 21,163,763 25,562,442 30,576,936 36,293,458
Investments in SPV 1,353,000 1,353,000 1,353,000 1,353,000 1,353,000 1,353,000 1,353,000 1,353,000 1,353,000
Cash and bank balances including cash

accrued 18,963,583 22,715,543 28,937,630 35,908,308 43,441,211 51,387,994 61,158,560 72,526,173 84,147,981
100,642,61 109,850,32 119,909,69 130,798,86 142,575,16 156,714,82 173,066,69 190,374,11
Total assets 83,855,531 4 7 0 2 6 0 1 4
Equity 0 0 0 0 0 0 0 0 0
111,892,67 125,381,85 139,758,15 155,197,80 171,549,67 188,857,10
Reserves & Surplus 75,838,519 87,425,602 99,233,315 7 0 4 8 9 1
Provisions 0 0 0 0 0 0 0 0 0
Long term loans 6,500,000 11,700,000 9,100,000 6,500,000 3,900,000 1,300,000 0 0 0
Short term liabilities 1,517,012 1,517,012 1,517,012 1,517,012 1,517,012 1,517,012 1,517,012 1,517,012 1,517,012
Deferred tax liabillity - - - - - - - - -

100,642,61 109,850,32 119,909,69 130,798,86 142,575,16 156,714,82 173,066,69 190,374,11
Total equity and liabilities 83,855,531 4 7 0 2 6 0 1 4
305
Projected balance sheet 17.00 18.00 19.00 20.00
In 000's 2023-24 2024-25 2025-26 2026-27
Assets
Fixed assets 65,022,442 64,990,109 64,957,020 64,923,145
Capital assets WIP
Current assets 3,525,625 3,525,625 3,525,625 3,525,625
Total Investments 44,163,294 51,592,487 60,061,767 69,716,746

Liquidation 42,810,294 50,239,487 58,708,767 68,363,746
Investments in SPV 1,353,000 1,353,000 1,353,000 1,353,000
Cash and bank balances including cash 108,187,53 120,583,91 133,215,06

accrued 96,032,516 5 0 3
208,743,87 228,295,75 249,128,32 271,380,58
Total assets 8 6 2 0
Equity 0 0 0 0
207,226,86 226,778,74 247,611,31 269,863,56
Reserves & Surplus 6 4 0 7
Provisions 0 0 0 0
Long term loans 0 0 0 0
Short term liabilities 1,517,012 1,517,012 1,517,012 1,517,012
Deferred tax liabillity - - - -

208,743,87 228,295,75 249,128,32 271,380,58
Total equity and liabilities 8 6 2 0
306
Projected fund flow 1 2 3 4 5 6 7
In 000's 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
Source of funds
Net earnings 4,371,567 3,298,137 3,775,086 4,793,739 6,204,096 7,142,868 7,740,716 8,888,974 9,934,073
Depreciation 301,190 328,441 356,958 463,105 653,314 792,475 956,072 967,872 995,145
Cash flow 4,672,757 3,626,578 4,132,044 5,256,844 6,857,411 7,935,343 8,696,788 9,856,846 10,929,218
Interest income (125,800)
Profit on sale of assets 12,500
Loans 6,000,000 2,000,000 3,000,000
Liquidation of Investments 2,500,000 3,800,000 2,100,000 1,000,000
Total sources of funds 10,672,757 3,626,578 6,132,044 10,756,844 10,657,411 10,035,343 9,696,788 9,856,846 10,929,218
Use of funds
Investments (1,000,368) 1,103,073 5,010,736 11,788,438 9,779,051 8,917,931 8,552,632 6,653,500 3,030,308
Increase in working capital 1,244,700 - - - - - - - -
Repayment of loans 7,343,300 4,401,164 2,000,000 2,400,000 1,000,000 1,000,000 1,000,000 1,000,000 600,000
Interest payments 14,400
Payout of deferred tax liability 429,317
Total use of funds 7,602,032 5,933,553 7,010,736 14,188,438 10,779,051 9,917,931 9,552,632 7,653,500 3,630,308
Balance flow of funds

(including cash) 3,070,725 (2,306,975) (878,692) (3,431,594) (121,640) 117,412 144,155 2,203,346 7,298,909
Liquid means beginning of year 6,885,178 4,578,202 3,699,510 267,916 146,276 263,687 407,843 2,611,189
Liquid means end of year 4,578,202 3,699,510 267,916 146,276 263,687 407,843 2,611,189 9,910,098
Increase( decrease) liquid

means (2,306,975) (878,692) (3,431,594) (121,640) 117,412 144,155 2,203,346 7,298,909
307
Projected fund flow 8 9 10 11 12 13 14 15 16
In 000's 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
Source of funds
Net earnings 11,031,260 11,587,083 11,807,713 12,659,363 13,489,172 14,376,304 15,439,654 16,351,871 17,307,423
Depreciation 1,007,909 1,185,183 1,220,488 1,234,845 1,249,777 1,265,306 1,281,456 1,298,252 1,315,720
Cash flow 12,039,169 12,772,266 13,028,201 13,894,208 14,738,950 15,641,610 16,721,110 17,650,123 18,623,143
Interest income
Profit on sale of assets
Loans 6,500,000 6,500,000
Liquidation of Investments
Total sources of funds 18,539,169 19,272,266 13,028,201 13,894,208 14,738,950 15,641,610 16,721,110 17,650,123 18,623,143
Use of funds
Investments 9,485,684 14,220,305 4,206,114 4,323,531 4,606,046 5,094,827 5,650,545 6,282,510 7,001,335
Increase in working capital - - - - - - - - -
Repayment of loans 0 1,300,000 2,600,000 2,600,000 2,600,000 2,600,000 1,300,000
Interest payments
Payout of deferred tax liability
Total use of funds 9,485,684 15,520,305 6,806,114 6,923,531 7,206,046 7,694,827 6,950,545 6,282,510 7,001,335

(including cash) 9,053,485 3,751,961 6,222,087 6,970,677 7,532,904 7,946,783 9,770,566 11,367,614 11,621,808
Liquid means beginning of year 9,910,098 18,963,583 22,715,543 28,937,630 35,908,308 43,441,211 51,387,994 61,158,560 72,526,173
Liquid means end of year 18,963,583 22,715,543 28,937,630 35,908,308 43,441,211 51,387,994 61,158,560 72,526,173 84,147,981

means 9,053,485 3,751,961 6,222,087 6,970,677 7,532,904 7,946,783 9,770,566 11,367,614 11,621,808
308
Projected fund flow 17 18 19 20
In 000's 2023-24 2024-25 2025-26 2026-27
Source of funds
Net earnings 18,369,764 19,551,878 20,832,566 22,252,257
Depreciation 1,333,887 1,352,780 1,372,429 1,392,864
Cash flow 19,703,651 20,904,658 22,204,996 23,645,121
Interest income
Profit on sale of assets
Loans
Liquidation of Investments
Total sources of funds 19,703,651 20,904,658 22,204,996 23,645,121
Use of funds
Investments 7,819,116 8,749,640 9,808,620 11,013,968
Increase in working capital
Repayment of loans
Interest payments
Payout of deferred tax liability
Total use of funds 7,819,116 8,749,640 9,808,620 11,013,968

(including cash) 11,884,535 12,155,018 12,396,375 12,631,153
Liquid means beginning of year 84,147,981 96,032,516 108,187,535 120,583,910
Liquid means end of year 96,032,516 108,187,535 120,583,910 133,215,063

means 11,884,535 12,155,018 12,396,375 12,631,153
309
Annexure 3
List of abbreviations
310
List of Abbreviations
Full Form Full Form Full Form

JNPT Jawaharlal Nehru Port Trust
SH54 State highway 54 ISPS International Ship and Port
SWOT Strength Weakness Facility Security Code
Opportunity Threat NH4/ 4B National highway 4/ 4B
SPV Special purpose vehicle
POL Petroleum & other liquids
PPP Public private partnership
CMIE Centre for monitoring of
RO-RO Roll on- Roll off (Car
ISO Indian statistical Indian economy
carriers)
EPZ Export processing zone organization
VTMS Vessel Traffic Management BRIC Brazil Russia India China
JNPCT Jawaharlal Nehru Port System ONGC Oil and Natural Gas
Container terminal
BPCL Bharat Petroleum Corp Corporation
TEU Twenty foot equivalent unit MEG Mono ethylene glycol
Limited
FEU Forty foot equivalent unit GTIPL Gateway terminals India LAB Linear Alkyl Benzene
private Limited
DFC Dedicated freight corridor ASI Annual survey of Industries
NSICT Nhava Sheva International
SLA Service Level agreement container terminal
DWT Dead Weight tonnage
FTZ Free trade zone CONCOR Container corporation of
India Limited ICAM Integrated capacity
CFS Container freight station assessment model
IOL Indian Oil Limited
ICD Inland Container Deport CIDCO City and Industrial
SEZ Special Economic Zone development corporation
RMGC Rail mounted gantry cranes
VAT Value added tax PWD Public works department
RMQC Rail mounted quay cranes
TAMP Tariff authority for major TAMP Tariff authority for major
RTGC Rubber tyred gantry cranes
ports ports
BOT Build operate transfer WACC Weighted average cost of
MbPT Mumbai Port Trust capital
ZCYC Zero coupon yield curve
IRR Internal rate of return NPV Net present value
311

JNPT Final Volume2v2

Hochgeladen von

Dokumentinformationen

Originalbeschreibung:

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

JNPT Final Volume2v2

Hochgeladen von

Copyright:

Verfügbare Formate

PORTS AND SHIPPING

JNPT Business Plan -

Section Page Section Page

8 Client related projects 3 14.0 Overview of action plan 212

9 Public related projects 76 14.1 Infrastructure creation plan 219

10 Organizational improvements 127 14.2 Process improvement plan 260

12 Plan of action 149 Annexure 1 269

1.1 Impact of VAT 270

13.4 Cash flow Analysis 200 1.7 Rail-Road Split 298

Annexure 2 (Financial statements) 300

Client related projects

Project to be undertaken GTI terminal to become fully operational

Year of Completion 2006-07 (GTI has started initial operations)

Capacity of the project 1.3 Mn TEUs

Total Traffic handled at JNPT after 3.22 Mn TEUs by 2006-07

Traffic handling capacity at JNPT in the 2.7 Mn TEUs

Project – 330m Expansion of existing berth towards NSICT

Exhibit 8.1.2 : 330 m extension of current berth

Calculation of revenues 2018-19 0.78

Approach road 192.87

NSICT Bridge Expansion 102.46

Reclamation Costs 1,067.44

Empties for stuffing

Exports by Road 30% of total exports

57% of total imports

Direct to importer Imports by Road

It is expected that the exports proportion and Empties

Year of Completion: 2009-10

Logistics/Free Trade Zone

Forecast of additional traffic Exhibit 8.1.11 : Land development cost per

9 6985 1233 24 12580 1660

Source : KPMG research

IRR/NPV of the project for JNPT

JNP ( Next Phase)

Addition of rail ICD

Calculation of Revenues 2026-27 2.4

JNPT had already commissioned a detailed feasibility 2031-32 2.4

General Description and motivation

MARINE CHEMICAL Area to

Forecast of additional traffic Exhibit 8.1.24 : Additional traffic till 2026-27

* Thousand metric tonnes per annum

Infrastructure projects are eligible for a tax holiday for the

Sensitivity Analysis - Exhibit 8.1.27 : Sensitivity analysis for NPV/ IRR of

An additional scenario was considered to assess the

Scenario 1: Decrease in traffic by 20%

Empties for stuffing

Exports by Road 30% of total exports

57% of total imports

Direct to importer Imports by Road

It is expected that the exports proportion and Empties

Year of completion – 2014-15

Forecast of additional traffic Exhibit 8.1.35 Traffic potential (Phase 2 of 4th

Calculation of Additional Costs

Reach Stacker 98.21

Tractor Trailer 1,849.42

* - Reclamation costs borne by terminal 1 operator

Empties for stuffing

Exports by Road 30% of total exports

57% of total imports

Direct to importer Imports by Road

It is expected that the exports proportion and Empties

Project to be undertaken Construction of additional POL product tanks

Year project is to be operational 2018-19