19.key Logistics Park

PrefeasibilityStudyforDevelopmentofLogisticsPark nearDevanahalli,BangaloreonPPPBasis DraftReport
TO
InfrastructureDevelopmentDepartment GovernmentofKarnataka
SUBMITTEDBY
KSIIDCIL&FSProjectDevelopmentCompanyLimited(KIPDC)
KhanijaBhavan,4thFloor,EastWing, #49,RaceCourseRoad,Bangalore560001
TABLEOFCONTENTS
1 2 BACKGROUND.......................................................................................................................................7 LOGISTICS..............................................................................................................................................9 2.1 2.2 Introduction..................................................................................................................................9 LogisticsServices.........................................................................................................................10 Materialflow.......................................................................................................................10 Inboundservices.................................................................................................................10 Warehousingservices.........................................................................................................11 Parkinternalservices..........................................................................................................11 Outboundservices..............................................................................................................12
2.2.1 2.2.2 2.2.3 2.2.4 2.2.5 2.3 2.4 2.5 3
LogisticsServiceProviders(LSP).................................................................................................12 GlobalScenario...........................................................................................................................14 IndianScenario ...........................................................................................................................16 .
LOGISTICSINFRASTRUCTURE..............................................................................................................18 3.1 3.2 LogisticsValueChain...................................................................................................................18 LogisticsFacilities........................................................................................................................19 DistributionCenter/Warehouse........................................................................................19 InlandContainerDepot(ICD)/ContainerFreightStation(CFS).........................................24 FreeTradeWarehousingZone(FTWZ)...............................................................................26 LogisticsPark.......................................................................................................................29
3.2.1 3.2.2 3.2.3 3.2.4 4
COMPONENTSOFALOGISTICSPARK.................................................................................................30 4.1 4.2 4.3 4.4 BasicRequirementsofaLogisticsPark.......................................................................................30 FacilitieswithinaLogisticsPark..................................................................................................30 StructureofaLogisticsPark........................................................................................................32 FunctioningofaLogisticsPark....................................................................................................33
DEMANDDRIVERS ..............................................................................................................................40 . 5.1 5.2 KeyDemandDriversofLogisticsinIndia....................................................................................40 PresentDemandDriversinBangalore........................................................................................43 LocationandConnectivity ..................................................................................................43 . 1
5.2.1
PrefeasibilityStudyforDevelopmentofLogisticsParkDraftPrefeasibilityReport 5.2.2 5.2.3 5.2.4 5.3 MajorProductionCentre....................................................................................................46 MajorConsumptionCentre................................................................................................52 MajorTransportationCentre..............................................................................................61
FutureDemandDriversinBangalore .........................................................................................62 . SuvarnaKarnatakaIndustrialCorridors(SKDC)..................................................................62 InformationTechnologyInvestmentRegion(ITIR).............................................................64 OtherProposedDevelopments..........................................................................................65
5.3.1 5.3.2 5.3.3 6
SUPPLYSCENARIO...............................................................................................................................69 6.1 MajorExistingLogisticsFacilitiesinBangalore(Select)..............................................................69 TruckTerminals...................................................................................................................69 RailwayGoodsTerminals....................................................................................................70 InlandContainerDepot(ICD)/DomesticRailHub(DRH)...................................................71 AirCargoCentre..................................................................................................................73 RetailWarehousing.............................................................................................................73 LogisticsParks.....................................................................................................................75
6.1.1 6.1.2 6.1.3 6.1.4 6.1.5 6.1.6 7
PROJECTLOCATION.............................................................................................................................77 7.1 7.2 EmergingLogisticsHubsinandaroundBangalore.....................................................................77 PreferredProjectLocation..........................................................................................................80
PROPOSEDDEVELOPMENT.................................................................................................................82 8.1 8.2 8.3 8.4 SuggestionsonSiteRequirements .............................................................................................82 . SuggestionsonProjectPhasing..................................................................................................83 SuggestionsonProductMix .......................................................................................................84 . BroadLandutilizationandfacilities............................................................................................85
PRELIMINARYPROJECTFINANCIALS...................................................................................................86 9.1 Assumptions................................................................................................................................86 CostAssumptions................................................................................................................86 RevenueAssumptions.........................................................................................................87 2
9.1.1 9.1.2
PrefeasibilityStudyforDevelopmentofLogisticsParkDraftPrefeasibilityReport 9.2 EstimatedProjectCost................................................................................................................88 PhaseI...............................................................................................................................88 PhaseII&PhaseIII.............................................................................................................88
9.2.1 9.2.2 9.3 9.4 10 10.1 10.2 11 11.1 11.2 11.3
EstimatedRevenues....................................................................................................................90 ProjectReturns...........................................................................................................................91 SUGGESTEDPROJECTSTRUCTURE&PROJECTBENEFITS...............................................................92 SuggestedProjectStructure.......................................................................................................92 ProjectBenefits...........................................................................................................................92 CONCLUSIONSANDRECOMMENDATIONS.....................................................................................93 SummaryofFindings ..................................................................................................................93 . RiskAllocationandMitigation....................................................................................................94 RecommendationsonWayForward..........................................................................................95
LISTOFTABLES
Table1RangeofServicesprovidedbytheLogisticsPlayers.......................................................................14 Table2GlobalLogisticsIndustrycurrentStatistics..................................................................................15 Table3SupplyStatisticsofselect3PLOperatorsinIndia...........................................................................17 Table4TypicalWarehouseTypologiesRetail...........................................................................................23 Table5ListofApprovedFTWZs(asonJan09)..........................................................................................27 Table6ListofFTWZswithvalidInPrincipleApprovals(asonJan09)......................................................28 Table7LogisticsParksvs.FreeTradeWarehousingZones(FTWZ)............................................................29 Table8RatesofGrowth(FY0304to0809)fordifferentsectorsofEconomy.....................................41 Table9ProjectsinAuto&AutoAncillariesSector......................................................................................47 Table10ListofMajorAutoAncillariesUnitsinKarnataka........................................................................47 Table11MSMEClustersinKarnataka........................................................................................................50 Table12RetailformatsofRetailMarketPlayersinIndia..........................................................................53
PrefeasibilityStudyforDevelopmentofLogisticsParkDraftPrefeasibilityReport Table13QuantityofAuto/AutoAncillaryProductsenteringBangalorethroughTumkurRoadCheckPost (Nov.09)......................................................................................................................................................55 Table14QuantityofAgriProductsenteringBangalorethroughTumkurRoadCheckPost(Nov.09).......55 Table15QuantityofElectrical/ElectronicsProductsenteringBangalorethroughTumkurRoadCheck Post(Nov.09)..............................................................................................................................................57 Table16QuantityofTextiles&ApparelsenteringBangalorethroughTumkurRoadCheckPost.............57 Table17DemandSupplyScenarioinResidentialMarketinBangalore.....................................................58 Table18DemandSupplyScenarioinOfficeMarketinBangalore.............................................................58 Table19QuantityofOtherBuildingMaterialsenteringBangalorethroughTumkurRoadCheckPost (Nov.09)......................................................................................................................................................59 Table20QuantityofOtherBuildingMaterialsenteringBangalorethroughTumkurRoadCheckPost....60 Table21QuantityofOtherGoodsenteringBangalorethroughTumkurRoadCheckPost(Nov.09)........60 Table22ApprovedSEZsintheStateofKarnataka.....................................................................................65 Table23ComparisonoftheEmergingLogistics/Warehousinghubsin&aroundBangalore..................79 Table24Suggestedareafordifferentphasesofdevelopment..................................................................83 Table25BroadLandUtilizationandFacilities............................................................................................85 Table26CostAssumptions.........................................................................................................................86 Table27RevenueAssumptions ..................................................................................................................87 . Table28OccupancyforPhaseIfacilities....................................................................................................87 Table29EstimatedProjectCostPhaseI..................................................................................................88 Table30EstimatedProjectCostPhaseII.................................................................................................89 Table31EstimatedProjectCostPhaseIII................................................................................................89 Table32ProjectRevenuesinthefirstyearofoperationPhaseI............................................................90 Table33ProjectRevenuesinthefirstyearofoperationPhaseII...........................................................90 Table34ProjectRevenuesinthefirstyearofoperationPhaseIII..........................................................90 Table35EstimatedProjectReturns............................................................................................................91 4
PrefeasibilityStudyforDevelopmentofLogisticsParkDraftPrefeasibilityReport
LISTOFFIGURES
Figure1EvolutionofLogisticsandSCM.......................................................................................................9 Figure2LogisticsServices...........................................................................................................................10 Figure3WarehousingServices...................................................................................................................11 Figure4LogisticsParkInternalServices.....................................................................................................11 Figure5OutboundServices........................................................................................................................12 Figure6Logistics&WarehousingPotentialEmergingEconomiesoftheWorld.....................................15 Figure7EmergingLogisticsLocationsinIndia...........................................................................................17 Figure8StructureofaLogisticsValueChain..............................................................................................18 Figure9MovingupinaLogisticsValueChain............................................................................................19 Figure10RetailLogisticsValueChain.........................................................................................................20 Figure11ModernDistributionCenterwithwarehousingfacility...............................................................21 Figure12ModernWarehouseValueCahin................................................................................................22 Figure13ModernDistributionWarehouse................................................................................................22 Figure14FlowofgoodsinaDistributionWarehouse................................................................................24 Figure15InlandContainerDepotwithRailsiding .....................................................................................25 . Figure16FreeTradeWarehousingZoneinproximitytoaseaport ...........................................................26 . Figure17StructureofaTypicalLogisticsPark............................................................................................32 Figure18Inbound/OutboundOperationsofaWarehousingFacility.......................................................33 Figure19DifferentTypesofPallets............................................................................................................35 Figure20CartonsandCases.......................................................................................................................36 Figure21PalletRackingSystems................................................................................................................37 Figure22AirFreightUnitLoadDevice(ULD)...........................................................................................39 Figure23RecentGDPFigures.....................................................................................................................41 5
PrefeasibilityStudyforDevelopmentofLogisticsParkDraftPrefeasibilityReport Figure24MapshowingthecentrallocationofBangaloreCityinSouthIndia..........................................43 Figure25NationalHighwaysDevelopmentProject(NHDP)GoldenQuadrilateral,NorthSouth&East WestCorridors............................................................................................................................................44 Figure26IndianRailwayMap....................................................................................................................45 Figure27MajorProductionCentresinKarnataka......................................................................................52 Figure28VehicleGrowthRateinBangalore..............................................................................................54 Figure29Whitegoods&ConsumerElectronicsMarket............................................................................56 Figure30SuvarnaKarnatakaIndustrialCorridors.....................................................................................64 Figure31SatelliteimageoftheD.DevarajUrsTruckTerminal,Yeswantpur............................................69 Figure32SatelliteimageoftheSatelliteGoodsTerminal,Whitefield.......................................................70 Figure33SatelliteImageoftheConcorICDWhitefield..............................................................................71 Figure34SatelliteimageofthePearlHarbourContainerTerminal,Whitefield........................................72 Figure35SafexpressFacilityDocks(Numbered&Leveled).....................................................................75 Figure36SafexpressFacilityHuboperations..........................................................................................76 Figure37EmergingLogisticsHubsinandaroundBangalore ....................................................................77 . Figure38LocationofBIAAPA......................................................................................................................80 Figure39LocationofBangaloreInternationalAirport(BIA)&Devanahallitown.....................................81 Figure40ProjectStructureforPhase1Development................................................................................92
1 BACKGROUND
a) Infrastructure Development Department (IDD), Government of Karnataka (GoK) is the Infrastructure arm of GoK with the primary objective of facilitating development of infrastructureprojectsacrossKarnataka. b) Karnataka State Industrial Investment & Development Corporation Limited (KSIIDC) wishestodevelopaLogisticsParknearBengaluruInternationalAirport(BIA)onPublic PrivatePartnership(PPP)Model. c) TheLogisticsParkwouldfurthercatalysetheeconomicactivityintheareaandgenerate employmentopportunities,besidesaugmentingthelogisticsservicessupporttothecity andtheregion. d) Inordertoassessiftheaboveprojectwouldbeprimafaciefeasiblefordevelopmenton PPPbasisanditsfinancialselfsustainabilityorotherwise,KSIIDCproposedtoconducta Prefeasibilitystudyforthesame. e) KSIIDC,videitsletterno.:DGM(IPD)/1231/200910dated11.08.2009,requestedIDDto entrust the preparation of PreFeasibility Report for the Logistics Park to KSIIDCIL&FS Project Development Company Limited (KIPDC) and the same was approved by the PrincipalSecretary,IDDon11.08.2009. f) Based on IDDs approval, KSIIDC, vide its letter no.: DGM(IPD)/1277/200910 dated 14.08.2009,hasrequestedKIPDCtotakenecessaryactiontoconductthePrefeasibility studyforDevelopmentofLogisticsParknearBengaluruInternationalAirportonPPP Model(hereinafterreferredtoastheProject). g) KIPDC, vide letter dated 19.08.2009 to the Principal Secretary, IDD, confirmed acceptanceoftheProjectaspertheterms&conditionsmentionedinIDDsletterno.: ID/89/ITS/2008[Part1]dated18.03.2009forconductingprefeasibilitystudiesbythe Consultants.IDDvideitsletterno:ID/63/ITS/2009dated09.09.2009confirmedawardof thisassignmenttoKIPDC. h) On completion of the prefeasibility study, KSIIDC and IDD have agreed to assign the project development and bid process management of this Project to KIPDC, if found viable for development on PPP basis without any financial support/VGF from Government of India (GoI). On such assignment of the project development and bid processmanagementofthisProjecttoKIPDC,IDDwouldpermitKIPDCtorecoverthe
7
Professional fees for the same, as may be mutually agreed upon between IDD and KIPDC,fromtheselecteddeveloper/bidderoftheProject i) However, if this Project is found to be viable for development only with financial assistance/VGF from GoI, then the project development and bid process management related work of this Project would be bid out by IDD as per GoI guidelines for PPP projects,inwhichKIPDCwouldalsobeeligibletoparticipate.
2 LOGISTICS
2.1 Introduction
Logisticsisthemanagementoftheflowofgoodsandotherresourcesbetweenthepoint oforiginandthepointofconsumptioninordertomeettherequirementsofconsumers. Logisticsinvolvestheintegrationofinformation,transportation,inventory,warehousing, materialhandlingandpackaging. Logisticsisageneralconcept,whichhasdifferentdefinitionsfordifferentindustries.We can also define logistics as a business planning framework for the management of material, service, information and capital flows. It includes the increasingly complex information, communication and control systems required in todays business environment.Duringthepastdecade,alargenumberofpractitionersinmanyfieldshave alreadyidentifiedthatinthecomplexbusinesssettingtheyhavetoconsidertheimpacts ofotherorganizationswhilemakinganydecisionstoimprovetheirownperformance.As a result, the logistics is extended to the management of supply chains involving diverse channel members (e.g., suppliers, manufacturers, distribution centers, retailers, etc.). Since the channel members affect one another, supply chain (logistics) management (SCM)representsasetofmanagementprocesses,withanemphasisonthecoordination forsupplychainimprovement. ThesuccessivestagesofevolutionoflogisticsandSCM,thecentralcharacteristicsofeach stage,andthedriversofchangeareshownintheFigurebelow:

Figure1EvolutionofLogisticsandSCM
2.2 LogisticsServices

Figure2LogisticsServices
2.2.1 Materialflow The materials flow includes the goods movement from the provider to the receptor, thuscreatingthetimevalue,locationvalue,andimprovementvalue.
2.2.2 Inboundservices Inbound services involve all national and international inbound activities facilitated by thelogisticsserviceprovider(s).Theseactivitiesinclude:
Forwarding and clearing of all inbound raw materials (including national and
internationalconsolidationactivities).
Managementofthetruckstagingareainaccordancetodeliverytimewindows. Managementofthecontainerfacility. Management of warehousing activities on behalf of tenants (suppliers & other
customers).
Containercallinsfordestuffing. DirectdeliveriesintotheLogisticsServiceProviderfacilities. Receiving&repackingofrawmaterials. AdministrationofrawmaterialsordersandprovisionofrelevantITdataandrequired
information
10
2.2.3 Warehousingservices Warehousing services done on behalf of tenants (suppliers) on both inbound raw materialsandoutboundfinishedgoods. Theseactivitiesinclude:
RawMaterialsReceipts:
Repackingofrawmaterials intoeconomicbinquantities Storage Picking OrderAdministration Inventorycontrol(Realtimestock information)

FinishedGoodsDistribution:
Storage Picking Repackingintoeconomicdeliveryquantities
Figure3WarehousingServices
Valueaddedservices(kitting,sequencing,trackingandtracing) DeliveryAdministration Inventorycontrol(Realtimestockinformation) 2.2.4 Parkinternalservices Parkinternalservicespertaintodistribution of raw material stored and collection of finished goods stored and/ or distributed on behalf of tenants (suppliers). These activitiesinclude:
Manytripstodistributerawmaterials
storedonbehalfoftenants(suppliers) Towmotorsandtrolleystodistribute rawmaterialsinaspecified frequency

Manytripstocollectfinishedgoodstobestored/distributedonbehalfoftenants Figure4 LogisticsParkInternalServices
(suppliers) Towmotorsandtrolleystocollectfinishedgoodsonaspecifiedfrequency
11
2.2.5 Outboundservices Outbound services to local, national or international customers facilitated by the logisticsserviceprovider(s). Theseactivitiesinclude:
Transportservices:
Directdeliveriestolocal& nationalcustomers Collectionfromthetenantanddelivery tocustomers. JIT(JustinTime)/JIS(Justin Sequence)deliveriestolocalcustomers fromthewarehousefacilities. Parkexternalmilkrunstodistribute finishedgoodstolocalandnational customersifvolumescanbejustified fromthewarehousefacilities. Directdeliveriestointernationalcustomersfromthewarehousefacilities(via shippinglines,etc.).
Containermanagement: Figure5OutboundServices
Outgoingcontainerstodomestic/internationalcustomers.
2.3 LogisticsServiceProviders(LSP)
Global production outsourcing has led to increased logistical challenges. The need for efficient, time and costeffective supply chain management has created new opportunitiesforintegratedlogisticsproviders. Tracingtheevolutionoflogisticsoutsourcinginrecentdecades,wefindthat,inthe1950s and 60s, logistics outsourcing was limited to transportation and warehousing. The transactionsweremainlyshortterminnature.Inthe70s,theemphasiswasonimproved productivity,costreductionandlongtermcontracts,whilevalueaddedservicessuchas packaging,labeling,systemssupportandinventorymanagementwereonofferinthe80s. Sincethe90s,outsourcinghaspickedupmomentum,andmorevalueaddedservicesare beingoffered.
12
a) 2PLor2ndPartyLogisticsServiceProviders Logistics outsourcing was traditionally primarily used for warehousing, inbound and outboundtransportationandshipmentconsolidation/distributionbythecompanies. Thereasonforthiswasthemassiveinitialinvestment&lowreturnsinthesettingup ofawarehouseandmaintainingalargetransportfleet.2PLLogisticsServiceProviders arealsoreferredtoasTraditionalLSPs. With globalization of the economy and the subsequent rise in competition, cost reduction and shorterproduct lifecycles havebecome the key determining areasof thecompetencyoffirms.Thisinturn,hasledtoincreasedimportanceandbusiness opportunitiesforLSPs.HencetheLSPswidenedtheirspanofserviceofferings,based onwhichnewclassificationsas3PLand4PLcameintoexistence.
b) 3PLor3 PartyLogisticsServiceProviders
rd
3rd Party Logistics (3PL) is the supply chain practice where one or more logistics functions of a firm are outsourced to a 3PL service provider. Typical outsourced logistics functions are: inbound freight, customs and freight consolidation, public warehousing, contract warehousing, order fulfillment, distribution and management ofoutboundfreighttotheclientscustomers. Themainaimbehindoutsourcinglogisticstoa3PLserviceprovideristokeepthefirm competitive & lean without owning many assets and, thus, allowing it to reduce operationalcostsandfocusonnicheareas.Further,alsovalueaddedservicescanbe provided such as: repackaging, assembling and return logistics. The 3PL service providermanagesandexecutestheseparticularlogisticsfunctionsusingitsownassets andresources,onbehalfoftheclientcompanyandcanbeclassifiedasAssetbased LogisticsServiceProvider.3PLisalsoreferredtoasContractLogistics.
c) 4PLor4 PartyLogisticsServiceProviders
th
Fourthparty logistics (4PL), Lead Logistics Provider or 4th Party Logistics, is a term coinedbyglobalconsultingfirmAccenture:A4PLisanintegratorthatassemblesthe resources,capabilities,andtechnologyofitsownorganizationandotherorganizations todesign,supplychainsolutionsoftheirsupplychainmanagementfunction.A4PL uses a 3PL to supply service to customers, owning only computer systems and intellectualcapitalandhencecanbeclassifiedasNonAssetbasedLogisticsService Provider. Supply chains of companies have become increasingly complex and at any point in time,manydifferent3PLprovidersmaybeemployedbyanyonefirm.Theneedfor
13
aninterfacebetweenthecompaniesandthevariousserviceprovidersthatitemploys, isleadingtotherecognitionofbenefitsthata4PLcanprovide.
Table1RangeofServicesprovidedbytheLogisticsPlayers
Activities
Traditional Service Providers
3PL
4PL
Endtoendsupplychain services DistributionofMerchandise Transportation Inventorymanagement Warehousing Orderprocessing Packagingandlabeling ReverseLogistics Logisticsnetworkplanning Supply/Demandplanning Managementofallthe serviceproviders
Recent trends in the logistics industry indicate that to be successful, service providers havetodifferentiatethemselvesfromtheircompetitorsintermsofofferingvalueadded services, focus on key customer accounts that have the potential to generate high profitability for a long term, enter into suitable alliances to complement the range of services offered and geographic areas served, and sell logistics services to clients suppliersandcustomers,thusleadingtocompletesupplychainintegration.
2.4 GlobalScenario
For any country, the annual logistics cost varies between 9% and 20% of the GDP, the figurefortheUSbeingabout9%.AccordingtoUSbasedArmstrong&Associates,Inc.,the global logistics market is currently valued at USD 3.5 trillion.1 The US logistics market is currentlyvaluedatUSD1Trillion.TheUSlogisticsmarketisthelargestforasinglecountry intheworldcapturingonethirdoftheworldlogisticsmarket,althoughmostofthelarge LSPsareheadquarteredinEurope.Thelogisticsindustryisgrowingveryfastinsoutheast Asian countries due to a shift of manufacturing base and increasing volumes of exports fromthesecountries.
http://www.iimcal.ac.in/research/download/LuganoConf.pdf
14
Thefollowingtablehighlightsselectlogisticsmarkets:
Table2GlobalLogisticsIndustrycurrentStatistics
Particulars
US
Europe
China
India US$0.09Trillion (Rs.4.14Trillion) 13% 8%10% p.a since 2002. Expected to post 11% p.a. for next5years Only 6% in organizedsector
Valueof US$1Trillion US$1.46Trillion US$0.29Trillion LogisticsMarket (1Trillion) (CNY2Trillion) %ageofGDP 8.7% 11% 14.5% GrowthRate Other 15.4%
Headquarters of Largest most of the logistics market(1/3rd) largeLSPs
AccordingtothesurveydonebytheUnitedNationsIndustrialDevelopmentOrganization (summarized in The Central Intelligence Agency or CIA World Factbook) to assess the Logistics&Warehousingpotentialinsomeoftheimportantemergingeconomiesofthe world,thepotentialforlogisticsishighbothinIndiaandChina.
Figure6Logistics&WarehousingPotentialEmergingEconomiesoftheWorld
15
2.5 IndianScenario
The Logistics market in India is currently valued at approximately Rs. 4.14 Trillion (US$ 0.09Trillion).Itisgrowingaround8%to10%perannumsince2002andexpectedtogrow @12%perannumforthenext5years. TheannuallogisticscostinIndiaiscurrentlyestimatedtobe13%oftheGDP.However, the industry is growing at a fast pace and if India can bring down its logistics cost from 13% to 9% of the GDP (level in the US), savings to the tune of USD 50 billion will be realized at the current GDP level, making Indian goods more competitive in the global market. Moreover, growth in the logistics sector would imply improved service delivery and customer satisfaction leading to growth of export of Indian goods and potential for creationofjobopportunities. Almost94%ofIndiaslogisticsmarketisaccountedforbytheunorganizedsectorsuchas owners of less than 5 trucks, affiliated to a broker or a transport company, small warehouse operators, customs brokers, freight forwarders, etc., and only 6% is contributedbytheorganizedsector. In the Indian context, the major logistics functions include transportation, warehousing, freight forwarding, express cargo delivery, courier services, container services, shipping services,etc.TheLogisticssectorinvestmentinIndiaisnotprimarilyfocusedonsustained developmentofplannedinfrastructuresuchaswarehouses,Transportcenters,ICDs,etc. Availabilityofcoldchainlogisticsinfrastructurefacilitiesforperishablesandfreshproduce issporadicandtheconceptofIntegratedColdChainisinaverynascentstage. Major investments on these infrastructures have come from government agencies like Central Warehousing Corporation (CWC), State Warehousing Corporation (SWC), ContainerCorporationofIndiaLtd.(CONCOR),etc.Thewarehousingcapacitiesaddedby government agencies in the year 2007 are 35.3 million tons by CWC & SWC and 25.2 milliontonsbyFoodCorporationofIndia(FCI).Privatesectorinitiativesarestillsmalland sporadic. Though the estimated size of the industry is still very small and the industry is still concentrated,thereisimmensepotentialforgrowthandalotofconsolidationactivities are taking place as more and more multinational LSPs are expanding their presence in Indiathroughdirectinvestments,acquisitionsandalliances. TheemerginglogisticslocationsacrossIndiaareshowninthefollowingfigure:
16
Figure7EmergingLogisticsLocationsinIndia
Growingat25%,p.a,India's3PLindustryispoisedtoexpanditsmarketmanifold.Select majorserviceproviders/organizationsinIndiaalongwithdetailspertainingtotheirscale ofoperationislistedbelow:

Table3SupplyStatisticsofselect3PLOperatorsinIndia
S.No NameoftheOrganisation 1 2 3 4 5 6 7 8 TCI IndoArya Prologistics Safexpress DRSLogistics RelianceLogistics AFLDauscher Gati TOTAL
Totalbuiltuparea(mn.Sq.ft.) Existing Upcoming 6.5 3.5 3.6 1.0 3.5 3.5 3.0 7.0 1.2 3.8 1.0 1.0* 1.0 N.A 0.6 5.0 20.4 23.8
No.ofwarehouses 494 36 35 N.A. N.A. 151 46 200
*Onlyintheeasternregion
17
3 LOGISTICSINFRASTRUCTURE
3.1 LogisticsValueChain
A typical logistics value chain consists of three building blocks namely Transportation, WarehousingandValueaddedservices.Basedonthesebuildingblocks,thetransformationofthe logisticsindustrytookplaceoverthepastdecadesfrom2PLto3PL.Inrecenttimes,theconceptof 4PLlogisticshasevolved,whichincludes3PLalongwithITsupport/SupplyChainManagementas partofitsserviceoffering. The following matrix explains the basic structure of a Logistics value chain with the different modesoftransportationononehandandtherangeofservicesprovidedontheotherhand.
Figure8StructureofaLogisticsValueChain
18
TheverticalmovementfromServicetoSolutiontoStrategyinthischainisshowninthe figure:
Figure9MovingupinaLogisticsValueChain
3.2 LogisticsFacilities
Over the decades, different forms of crossbundling have taken place in the logistics chain,leadingtodifferenttypesofFacility/Infrastructureplanning.Thereareanumberof Logistics Facilities based on their components and service offerings. A few important formsofLogisticsFacilitiesinclude: DistributionCenter/Warehouse(forRetailLogistics,etc.) InlandContainerDepot(ICD)/ContainerFreightStation(CFS) FreeTradeWarehousingZone(FTWZ) LogisticsPark 3.2.1 DistributionCenter/Warehouse Retailingistheinterfacebetweenthemanufacturerandtheindividualconsumerbuying forpersonalconsumption.Itisthelastlinkthatconnectstheindividualconsumerwith the manufacturing and distribution chain. Indian retail spending is growing at double digits (11.3% between 200607 & 200708) and the private final consumption expenditure at current prices was estimated at Rs. 26,07,584 crores in 200708.
19
Organizedretailisgrowingat400%p.a.andisexpectedtoreacharound$30billionby 2010. The retail chain starts with the international suppliers, domestic suppliers, and own manufacturingfacilitiessupplyingproductstodistributioncenterswhichthengotocity hubs/warehouses. From city hubs/ warehouses, these are transported to retail stores and finally to the consumer. Due the growth of retail, the demand for Distribution centersandRegionalWarehousesishigh.
Figure10RetailLogisticsValueChain
a) ModernDistributionCenter AmodernDistributionCenterisattheheartoflogisticsandisacomplexspacethatacts as the focal point for the storage of goods. It also provides valueadded services like packaging, labeling, inventorycontrol, barcoding and customer service functionssuch as repair, rework and repackaging. They are the indisputable nodal point within any logisticsnetwork,beitforretailorotherwise.
20
Figure11ModernDistributionCenterwithwarehousingfacility
Theprimaryroleofadistributioncenteristoreceivelargequantitiesofproducts and ship small quantities to individual stores; an important secondary role is storage (DistributionWarehouse).Manyretailershaveprioritizedhavingasmanyitemsinstock atonetimeaspossible.Toconservespace,minimizeinventorycosts,andmaximizethe varietytheyoffertheretailmightonlystockoneorafewitemsofaparticularproduct. Thisrequirestheabilitytoshipareplacementquicklyonceanitemissold.Bykeeping productonhandinthedistributioncenter,theretailercanshipareplacementalmost immediatelyafteraproductissold. b) ModernDistributionWarehouse A Distribution warehouse is a part of a Distribution Center and is defined as a nodal point of a logistics network where goods are temporarily stored or transferred to anotherrouterunningthroughthenetwork.
21
Figure12ModernWarehouseValueCahin
Figure13ModernDistributionWarehouse

22
The following table gives details about typical warehouse typologies and their specifications:
Table4TypicalWarehouseTypologiesRetail
TypicalWarehouseTypologies Parameters Godown Clear 1012ft Height Flooring Plaincement concrete Levels Singlefloor;may haveamezzanine Notapplicable Typicallybetween 5,00050,000 sq.ft. Concreteorsteel structure Manualoperations
ModernWarehouse 2024ft 150200mm;reinforced cementconcreteflooring ofM15M20strength Multiplelevel,witha maximumoffourincluding groundfloor 1mtr Typicallybetween50,000 3,00,000sq.ft. Steelstructureorpre engineeredstructure Loadingplatforms, forklifts,docklevelers,etc WarehouseManagement System(WMS)present Sprinklers,smoke detectorsetc.
DistributionWarehouse 3742ft 250300mm;reinforced cementconcreteflooring ofM20M25strength Multiplelevel,witha maximumofeight includinggroundfloor 1.11.5mtrs Morethan3,00,000sq.ft.
DockLevel Area
Typeof Structure Equipment
Preengineeredstructure Docklevellers,mechanised loading,conveyors,cranes etc. SophisticatedWarehouse ManagementSystem present Sprinklers,smokedetectors etc.
Technology Absenceof automatedsystems andWMS Fire Manualfire Fighting extinguishers
There are four primary functions that a Distribution Warehouse layout must accommodate: 1.Productstorage 2.Inboundoperations(includingreceivingandreturns) 3.Outboundoperations(includingpickingandstaging) 4.Valueaddedprocesses
23
Figure14FlowofgoodsinaDistributionWarehouse
3.2.2 InlandContainerDepot(ICD)/ContainerFreightStation(CFS) An Inland Container Depot (ICD)/ Container Freight Station (CFS) can be defined as: A commonuserfacilitywithpublicauthoritystatusequippedwithfixedinstallationsand offeringservicesforhandlingandtemporarystorageofimport/exportladenandempty containers carried under customs control and with Customs and other agencies competenttocleargoodsforhomeuse,warehousing,temporaryadmissions,reexport, temporarystorageforonwardtransitandoutrightexport.Transshipmentofcargocan alsotakeplacefromsuchstations. Functionally there is no distinction between an ICD / CFS as both are transit facilities, whichofferservicesforcontainerizationofbreakbulkcargoandviceversa.Thesecould be served by rail and/ or road transport. An ICD is generally located in the interiors (outsidetheporttowns)ofthecountryawayfromtheservicingports.CFS,ontheother hand,isanoffdockfacilitylocatedneartheservicingportswhichhelpsindecongesting theportbyshiftingcargoandCustomsrelatedactivitiesoutsidetheportarea.CFSsare largelyexpectedtodealwithbreakbulkcargooriginating/terminatingintheimmediate hinterland of a port any may also deal with rail borne traffic to and from inland locations.
24
Figure15InlandContainerDepotwithRailsiding
Keeping in view the requirements of Customs Act, and need to introduce clarity in nomenclature, all containers terminal facilities in the hinterland are designated as ICDs". TheprimaryfunctionsofICD/CFSmaybesummedupasunder: Receiptanddispatch/deliveryofcargo Stuffingandstrippingofcontainers Transitoperationsbyrail/roadtoandfromservingports Customsclearance ConsolidationanddesegregationofLCLcargo Temporarystorageofcargoandcontainers Reworkingofcontainers Maintenanceandrepairofcontainerunits TheoperationsoftheICDs/CFSsrevolvearoundthefollowingcentreofactivities: RailSiding(incaseofarailbasedterminal) The place where container trains are received, dispatched and handled in a terminal.Similarly,thecontainersareloadedonandunloadedfromrailwagonsat thesidingthroughoverheadcranesand/orotherliftingequipments. ContainerYard ContaineryardoccupiesthelargestareaintheICD/CFS.Itisstackingareawhere theexportcontainersareaggregatedpriortodispatchtoport,importcontainers are stored till Customs clearance and where empties await onward movement.
25
Likewise, some stacking areasare earmarked for keeping specialcontainers such asrefrigerated,hazardous,overweight/overlength,etc. Warehouse A covered space/ shed where export cargo is received and import cargo stored/ delivered; containers are stuffed/stripped or reworked; LCL exports are consolidated and import LCLs areunpacked;and cargo is physically examined by Customs. Export and import consignments are generally handled either at separateareasinawarehouseorindifferentnominatedwarehouses/sheds. GateComplex Thegatecomplexregulatestheentryandexitofroadvehiclescarryingcargoand containers through the terminal. It is place where documentation, security and containerinspectionproceduresareundertaken.
TheminimumarearequirementforaCFSwouldbeOneHectare(2.5acres)andforICD FourHectares(10acres).However,aproposalcouldalsobeconsideredhavinglessarea on consideration of technological upgradation and other peculiar features justifying suchadeviation.
3.2.3 FreeTradeWarehousingZone(FTWZ)
Figure16FreeTradeWarehousingZoneinproximitytoaseaport
TheFreeTrade&WarehousingZones(FTWZ)isaspecialcategoryofSpecialEconomic Zonewithafocusontrading&warehousing.Theschemewasannouncedintheforeign tradepolicy200409tocreatetraderelatedworldclassinfrastructuretofacilitatethe import&exportofgoods&serviceswiththefreedomtocarryoutthetradetransaction in free currency. This has since incorporated in the SEZ Act 2005 and therefore all
26
benefits available to SEZs shall be applicable to FTWZs. FTWZ shall be under the administrative control of the Development Commissioner (DC). Foreign Direct Investment (FDI) to the tune of 100 % is permitted in the development and establishmentofFTWZ. FTWZisadeemedforeignterritoryandallequipmentsandmaterialssourcedfromthe DomesticTariffArea(DTA)willbeconsideredasdeemedexports.Movementofgoods fromFTWZtoDTAwillbeconsideredasimports.Theminimumlandrequirementfora FTWZis40hectares(approx.100acres)and1lakhsq.m.ofwarehousingspace. EachFTWZwouldprovideWorldClassInfrastructurefor: Warehousingforvariouskindsofproducts HandlingandTransportationEquipment Commercialofficespace Allrelatedutilitiestelecom,power,water,etc OnestopclearanceofImportandExportofgoods TheseZoneswouldbeestablishedinareasproximatetoseaports,airportsordryports soastooffereasyaccessbyrailandroad. TheListofApprovedFTWZs(asonJan09)isgivenbelow:
Table5ListofApprovedFTWZs(asonJan09) Sr 1. 2. Nameofthe developer FABCitySPV(India) Pvt.Ltd. Deccan Infrastructureand LandHoldingsLtd BalajiInfraProjects Limited Chiplun InfrastructurePrivate Limited(formerly M/sFTWZLtd.) ArshiyaTechnologies InternationalLimited J.MatadeeEcoParks Pvt.Ltd Location Hyderabad RangaReddy District DighiPort,District Raigarh Mumbai State AP AP TypeofSEZ FTWZ FTWZ Areain Acres 300.15 101.17
3.
MH
4.
MH
PortbasedSEZfor MultiProduct inclusiveofFTWZ FTWZ
250
100
5. 6.
VillageSai,Taluka Panvel MannurVillage, Sriperembdur Taluk, Kancheepuram
MH TN
FTWZ FTWZ
170 100
27
Sr
Nameofthe developer JafzaChennai BusinessParks PrivateLimited Jhunjhunwala VanaspatiLtd.
Location Distt. VallurVillage, PonneriTaluka, TirvallurDistrict Sahupuri,Distt. Chandauli
State
TypeofSEZ
Areain Acres 340.95
7.
TN
FTWZ
8.
UP
9.
ArshiyaInternational Ltd.
10
HaldiaFreeTrade Warehousing PrivateLimited
VillageIbrahimpur, Junaidpur Urf,Moujpur, Bulandshar Haldia
UP
MultiServicesSEZ withFTWZ&25 MWCaptivePower Plant FTWZ
259.07
136.65
WB
FTWZ
114.3
TheListofFTWZswithValidInPrincipleApprovals(asonJan09)isgivenbelow:
Table6ListofFTWZswithvalidInPrincipleApprovals(asonJan09) Sr 1. 2. 3. 4. 5. Nameofthe developer LMJWarehousing PrivateLimited ShipcoInfrastructure PrivateLimited(SIPL) VibrantIL&FS Consortium JafzaPvt.Ltd. ModernIndiaFree TradeWarehousing Pvt.Ltd. M/s.DLFUnviersal Limited VikramLogisticsand MaritimeServices PrivateLimited Location Kandla Karnataka Naigaon Raigad Raigad State GJ KN MH MH MH TypeofSEZ FTWZ FTWZ FTWZ FTWZ FTWZ Areain Acres 100 300 117.35 213.75 101.175
6. 7.
Amtritsar,Punjab Vallurand Edayanchavadi Villages,Ponneri Taluk,Tiruvallur District GreaterNoida
PB TN
FTWZ FTWZ
100 106.25
8.
GreaterNoida Integrated WarehousingPvt. Ltd.(Earlierknownas FreeTrade WarehousingZone Pvt.Ltd.
UP
FTWZ
200
28
3.2.4 LogisticsPark A Logistics park is an attributed area that facilitates domestic and foreign trade by providing services including warehousing, cold storage, multimodal transport facilities and ICD/ CFS. Key factors that differentiate a logistics park from a typical ICD/ CFS/ Warehousearevalueaddedservicessuchascrossdocking,customization,stackingand labeling. Companiesthatarelocatedwithinthefacilitygetbenefitedintheformofreducedcosts (less tiedup capital, economies of scale, and/or logistics outsourcing) or an ability to providebetterservicesincooperationwithothercompaniesoperatingwithinthepark. The concept of a Logistics Park is a recent phenomenon. It can be traced back to the Foreign Trade Policy of 2004, which led to the development of FTWZs. While FTWZs were aimed at facilitating import and export of goods, the need for onestop solution thatcouldadditionallycatertothedomesticmarketledtothedevelopmentofLogistics Parksasapartoftheinfrastructureindustrysince2005.
ThecomparisonbetweenLogisticsParksandFTWZsisgivenbelow:
Table7LogisticsParksvs.FreeTradeWarehousingZones(FTWZ)
29
4 COMPONENTSOFALOGISTICSPARK
4.1 BasicRequirementsofaLogisticsPark
ThecasestudiesofselectLogisticsParksinIndiaandabroadarehighlightedinAnnexure 1.Basedonthecasestudies,itsobservedthatthedevelopmentofalogisticsparkshould havethefollowingbasiccriteria: a) Land&AreaRequirements LandparcelsinvolvedinLogisticsParkprojectsshouldbepreferablyoncityperipheries. The area has to be adequate in order to accommodate the facilities planned in the developmentoftheLogisticsPark.Thesiteareaaffectsthefacilitiesplanningandthe viceversa also holds good. Hence the area of the site plays an important role in the developmentofLogisticsPark. b) Connectivity Transportationisanessentialandmajorsubfunctionoflogisticsthatcreatestimeand placeutilityingoods.Thekeytransportinfrastructurerequiredformovinggoodsfrom oneplacetoanotherinIndiainvolveroads,rail,shippingportsandairfreight. Road transportation provides key services like cargo management, trucking related serviceslikefleetmanagement,networkoptimizationandrouteplanning. Railtransportationprovidescosteffectivemovementofbulkcargowithinthecountry. Majorportsandairportsalsofacilitatecontainer/exportimport(EXIM)movementin the country. In addition airports account for high value domestic cargo and Express cargomovementwithinthecountry. c)HumanResourceAvailability Human resource is an important criterion in the selection of site for development of logistics parks. Skilled manpower is needed to be available in the area. Alternatively, thesiteshouldhaveeasyaccesstothepublictransportationnetworkofthecity.
4.2 FacilitieswithinaLogisticsPark
Aformofcrossbundlingwithawiderfocustoincludealmostallthefacilitiesacrossthe Logistics value chain has given birth to the concept of Logistics Parks. A logistics park
30
facilitates both domestic and foreign trade. Some of the base facilities that form the skeletonstructureofalogisticsparkareasfollows. 1. TransportationFacility Basedontheprojectlocationanditsaccesstothedifferentmodesoftransportation thefollowingfacilitiescanbeproposedinalogisticspark. RoadTruckparkingarea/Truckterminal RailInlandContainerDepot/DomesticRailHead(DRH) WaterPort/ContainerFreightStation(CFS) AirAirCargoCentre 2. WarehousingFacilityStorage Storageisanimportantfunctionofalogisticsparkandthewarehousingcomponentof the park takes care of the same. Based on the products to be stored, the following storagefacilitiesareplannedwithinthepark. CustomisedWarehouse ColdStorageWarehouse BondedWarehouse GeneralWarehouse 3. SupportandSocialInfrastructurefacilities
31
4.3 StructureofaLogisticsPark
LogisticsPark
WarehousingFacility CustomizedWarehouse ColdStorageWarehouse Warehouses OfficeSpace&Amenities Agents,etc.
InlandContainerDepot ContainerFreightStation ContainerStackingArea BondedWarehouse OfficeSpace&Amenities Customs,etc.
AirCargoCentre Stuffing/DestuffingArea BondedWarehouse OfficeSpace&Amenities Agents,etc.
CommonFacility TerminalBuildings Truck,Rail InternalRoads&Railway Sidings CentralAdminFacility PowerTransmission& DistributionNetwork TelecomNetwork
SupportInfrastructure CoolerFacility PowerBackUp WaterStorage& TreatmentPlant SewerageTreatment Plant GreenArea
Figure17StructureofaTypicalLogisticsPark
32
4.4 FunctioningofaLogisticsPark
Thefunctioningofalogisticsparkcanbeexplainedonthesamelinesonwhichthebasic componentsoftheparkareformulated. 1. Transportation Transportation plays an important role in the logistics value chain and is a vital component to decide upon the facilities to be created in a logistics park. Goods are exported/importedand/ortransportedwithinthecountrybythedifferentmodesof transportationavailablesuchasroad,rail,waterandair.Theroadandrailboundgoods are directly transported till the warehousing facility. However, water borne and air bornegoodsarefurthertransportedeitherbyroadorrailtillthewarehousingfacility. TruckTerminal,internalroads,railsiding,railnetwork,ICD/CFS,AirCargoCentre,etc. for the efficient movement of the goods, within the park forms the Transportation componentofthelogisticspark. 2. Warehousing a) Inbound/Outboundoperations The handling of goods at the warehousing facility is termed as the Inbound/ Outbound operations of the facility. The handling includes both loading and unloadingofgoodsfrom/tothewarehouse.
Figure18Inbound/OutboundOperationsofaWarehousingFacility
33
b) Storage I. StorageLocations The storage locations are of two types. They are Climate Controlled Storage SpacesandNonClimateControlledStorageSpaces. ClimateControlledStoragespace Warehousesofferclimatecontrolledspacesforitemsthatrequirestorageina climatecontrolledenvironment. HumidityControl Items that are sensitive to high humidity are generally stored in rooms withhumidityatlevelsthatarebelow55RH(RelativeHumidity).Molds and mildew can grow on most surfaces and can spread easily as the spores can become air borne however mold and mildew growth is inhibitedat55RH. TemperatureControl Goods require storage in cold conditions and temperature controlled storageisthesuitableoption.EspeciallyFoodproductsneedthiskindof temperaturecontrolledstorage. HumidityandTemperatureControl Certainkindofgoodsneedbothtemperatureandhumiditycontrol. TraditionalStorageNonClimateControlledStorageSpace Traditional storage offers no control over humidity and temperature. The spaceisbasicallymaintainedatwhatevertemperatureandhumiditylevelsas the remainder of the warehouse. Warehouses are generally maintained at a temperatureafewdegreesabovetheoutsidetemperatureinthewinteranda fewdegreesbelowtheoutsidetemperatureinthesummerandthehumidity levelisdependentonoutsidehumiditylevels. II. StorageContainers The following is a list of some of the names and characteristics of common storagecontainersusedinwarehouses:
34
Intermodal containers (shipping containers) are used for the efficient transportation of goods. There are standards that specify the volume and dimensionsofcontainerstofacilitateefficienthandling. Palletsareoneofthemostcommonlyusedmeanstostoreandmoveproduct in a distribution center. There are many specialized devices (MHE) used to handle pallets forklift truck, pallet jack, pallet inverter, and unit load AutomatedStorage/RetrievalSystem(ASRS).Palletsarestoredonthefloor, maybestacked,andmaybestoredinpalletrack.
Figure19DifferentTypesofPallets
SingleWayEntrySingleDeckNonReversiblePallet
SingleWayEntryDoubleDeckReversiblePallet
2WayEntryDoubleDeckNonReversiblePallet
4WayEntryDoubleDeckNonReversiblePallet
35
4WayEntryDoubleDeckReversiblePallet
Cases and Cartons are boxes usually containing many items. In distribution centers there is a generally accepted distinction made between the terms carton and case although both are boxes. Goods are received and stored in cartons.Goodsareshippedincases.Astoredcartoniscalledacaseonceithas beenpickedorpulledforshipment.
DifferentSizesofCartons
CartonsplacedonPalletsCases
Figure20CartonsandCases
36
Totesarereusablecontainersusedtoholdandtransportgoods. Pallet Racking Systems: The choice of which type of racking best suits the requirement which comes down from type of storage. The various type of pallet racks used for the storage of different container size are shown in fig. below: Figure21PalletRackingSystems
Teardrop Many Size Options
Rigurak 12' 14' Tall 90" Beams
Inca 15' & 20' Tall 8' and 9' Beams
Unarco T-Bolt 16' Tall 144" Beams
Unarco T-Bolt 21' tall 8' and 9' Beams
Amerack 72" Deep
Speedrack 22' Tall 92" Beams
Structural Rack 15' Tall,20' Tall,26' Tall 8', 8 1/2' and 11' Beams
Konstant 17' Tall 93" Beams
Sturdibilt 13' Tall 9' Beams
Paltier 16' Tall 8' Beams
Amerlock 12' Tall 9' Beams
37
Sammons 12' Tall 8' & 9'Beams
Speedrack 16' Tall and 15 Tall';100" Beams
Frontier 12 Tall 8' Beams
Sturdibilt in San Antonio 20' Tall 8' and 9' Beams
Sturdibilt 20' Tall and 30' Tall 8' and 9' Beams
Teardrop Bulk Storage 24' Tall 8' Beams
Webb 12' Tall 8' Beams
Pennco 21' Tall 8' Beams
Unarco II 15' Tall 7' Beams
Amerack 16' and 18' Tall 5' Deep
Structural 22' Tall 9' and 10'6" beams
Unarco 2 19' 6"Tall 104" Long Beams
Republic 16' ' Tall 8' Beams
Rigurak 14' ' Tall 90" Beams
Hi-Line 19'6" and 23 ' Tall 92" , 108" & 144" Beams
38
Air Freight Handling Unit Load Devices (ULD) are an integral part of both widebodied and some narrowbodied aircraft operations.The ULDs play an increasinglyimportantroleinprovidingsafe,efficientmovementofcargoand baggage.
Figure22AirFreightUnitLoadDevice(ULD)
c)ValueaddedServices The Valueadded services provided by a warehousing facility, is an important function in the service portfolio of a LSP to establish their competitive advantage over the other LSPs in the market. A few of the value added services offered include Packaging & Labeling, Inventory Management, Quality Checking, Planning forcostcontrol,etc. Oneofthevalueaddedservicesgainingimportanceintherecentlogisticsmarketis theReverselogistics.Reverselogisticsassuchrecapturesthevalueoftheproduct that is redundant and moves it back to the supply chain. Integration of similar, highly demanded valueadded services at the warehouse level would greatly enhancethevaluepropositionoftheLSPs. 3. SupportandSocialInfrastructureFacilities The support and social infrastructure facilities include both essential infrastructure facilities for the effective functioning of the logistics park and other facilities that addresstheenvironmentalandlanduseregulationswithinthepark. The facilities such as the Central administration facility, Office Spaces and Amenities, Cooler facility, Power backup, Power Transmission & Distribution network, Water storage & Treatment Plant, Sewerage Treatment Plant, Telecom network, etc. are necessary for the effective functioning of the logistics park are part of the Support Infrastructure facilities. The Social Infrastructure facilities include the eating areas, toilets,dormitories,recreationalareas,etc.
39
5 DEMANDDRIVERS
5.1 KeyDemandDriversofLogisticsinIndia
ThekeydemanddriversforthelogisticsIndustryinIndiaare: Economicgrowth Industrialgrowth Tradegrowth Agriculturalgrowth Aircargogrowth Retailgrowth IncreasedExportsfromthestateofKarnataka
a) OverallEconomicGrowth i. India is among the fastest growing economies in the world, achieving an average growthrateof8.8%inthefiveyearperiod200304to200708. ii. DuetotheGlobalEconomicSlowdown,economicgrowthdeceleratedin200809to 6.7percent. iii. RecentEconomicGrowth: TheIndianeconomyisgrowingfasterthanearlierpredicted,withgrowthinthe2nd Quarter of the FY0910 pegged at 7.9% year on year. The economy had earlier posted a growth rate of 6.1% in the 1st Quarter of the FY0910, an improvement overthe5.8%rateregisteredintheprevioustwoquarters. This is the highest quarterly growth registered in the past 18 months and would providethegroundtopostatleast7%growthforthefullFY200910.
40
Figure23RecentGDPFigures
iv. FollowingtableshowstheRatesofgrowth(FY200304to200809)atfactorcostat 19992000prices(percent)forthedifferentsectorsoftheeconomy.

Table8RatesofGrowth(FY0304to0809)fordifferentsectorsofEconomy
b) IndustrialGrowth i. IndustrialgrowthisshowingsignsofrecoveryinthecurrentFinancialYear(2009 10),withgrowthratereachinga22monthhighof10.4%inAugust2009. ii. Inthesameperiod(August2009),manufacturingoutputgrewby10.2%,miningby 12.9 % and electricity production by 10.6 %. Of 17 industry groups, 14 showed positivegrowth.Onthebasisofusebasedindustrialbreakup,consumerdurables productiongrewby22.3%,basicgoodsby10%andintermediategoodsby14.3%.
41
iii. Overallinthe2ndQuarterofFY200910,Manufacturingoutputgrewby9.2% iv. TheproposedIndustrialCorridors(e.g.DelhiMumbaiIndustrialCorridororDMIC, Peninsular Region Industrial Development or PRIDe Corridor, Suvarna Karnataka Development Corridors or SKDC, etc.), Investment Regions (e.g. Petroleum, Chemicals & Petrochemical Investment Region or PCPIR, Information Technology Investment Regions or ITIR, etc.) and Special Economic Zones (SEZs), will further boosttheindustrialgrowthacrossthecountry. c) TradeGrowth i. Indiasexportshavegrownby12.8%in200809andimportshavegrownby17.9%. ii. The EXIM growth would increase the requirement for ports, Inland Container Depots(ICDs)andFreeTradeWarehousingZones(FTWZs). d) AgriculturalGrowth i. Forthreeconsecutiveyears(200506to200708),foodgrainproductionrecorded anaverageannualincreaseofover10milliontonnes.Theproductionoffoodgrains in200809wasestimatedtobe229.85milliontonnes. ii. As per conservative estimates, around 35 million tonnes of agro warehousing are neededinnext5to10years. e) AircargoGrowth i. India'sincreasinginternationaltradecombinedwiththestrongdomesticeconomy, is continuing to drive demand for air cargo and logistics. All major international cargooperatorsarereportingstronggrowthintheIndianmarket.Newdedicated cargoairlinesarebeinglaunched. ii. ItisestimatedthatthetotalprocessingspacerequiredatIndianairportsisaround 2,00,000sq.m.,whilethecurrentprocessingcapacityisabout50,000sq.m. f) RetailGrowth i. At present, organized retail accounts for only about 3% of the total retail and is expectedtoreach10%byendofthenextfinancialyear201011. ii. Thiswouldrequirethecreationofahugebackendinfrastructureforthissector
42
5.2 PresentDemandDriversinBangalore
5.2.1 LocationandConnectivity
Figure24MapshowingthecentrallocationofBangaloreCityinSouthIndia
Bangalore is centrally located in south India and has good connectivity to other locations in the region. The following map shows the central location of Bangalore in southIndia: a) Road iii. Bangalore city is very well connected to the region as well as the rest of India throughastrongnetworkofNationalHighways(NH)andStateHighways(SH). iv. BangaloreisstrategicallylocatedonboththeGoldenQuadrilateralandtheNorth SouthCorridorofNationalHighwaysAuthorityofIndia(NHAI). v. ThemajorhighwaysradiatingfromBangalore(clockwisefromNorth)include: NH7:towardsAnathapur,Kurnool,Hyderabad,Nagpur&Delhiandispart oftheNorthSouthCorridorofNHAI NH4:towardsChittoor,Tirupati(fromChittoor)&Chennai NH7: towards Krishnagiri, Chennai (from Krishnagiri), Pondicherry (from Krishnagiri),Salem,Madurai,Kanyakumari,Coimbatore(fromSalem)
43
&Kochi(fromSalem)andispartofboththeGoldenQuadrilateral& theNorthSouthCorridorofNHAI NH209:towardsChamrajnagar&Coimbatore SH17:towardsMysore,Madikeri(fromMysore)&Kozhikode(fromMysore) NH48:towardsHassan&Mangalore NH4: towards Tumkur, Shimoga (from Tumkur), Goa (from Tumkur), Chitradurga, Hubli, Belgaum, Pune & Mumbai and is part of the GoldenQuadrilateralofNHAI vi. The following figure shows the strategic location of Bangalore city on both the GoldenQuadrilateralandNorthsouthCorridorofNHAI:
Figure25NationalHighwaysDevelopmentProject(NHDP)GoldenQuadrilateral,NorthSouth&East WestCorridors
44
b) Rail i. BangalorecityiswellconnectedtomajorcitiesofIndiabytheIndianRailways.It is part of the SouthWestern Railways (SWR) zone, headquartered at Hubli, Karnataka.
ii. ThefollowingfigureshowsthenetworkofIndianRailways:
Figure26IndianRailwayMap
45
c) Air i. The Bengaluru International Airport (BIA) is located 40 km north of the citys centralbusinessdistrict(CBD). ii. The airport, which opened for traffic in May 2008, has been developed and is managedbytheBengaluruInternationalAirportLtd.(BIAL). iii. Inits1styearofoperationtheairporthashandled8.7millionpassengersandover 1,20,000aircraftmovements. iv. 31airlinescurrentlyoperatefromtheairport,ofwhich20areinternationalairlines (includingthreefreighters)and11aredomesticairlines(includingtwofreighters). v. According to cargo projections made by BIAL, the airport is projected to handle 300,000tonnesofcargoby2010. 5.2.2 MajorProductionCentre Bangalore city is one of the major production centers in south India. Some of the key sectors which are driving the demand for logistics in Bangalore include Auto & Auto ancillaries,Textiles&Garments,Agrobased&FoodProcessing,Floriculture,Electronics and Engineering. In addition to the above sectors, Cement and Iron & Steel are other importantsectorsinKarnataka.Thehighlightsofthesesectorsaregivenbelow: a) Auto&Autoancillariessector BangaloreisanimportantcentreforAuto&AutoAncillariessector,withpresenceof majorplayers.TheseincludeVolvo(BusunitatHoskotenearBangalore),Toyota(Car unit at Bidadi near Bangalore) and Reva (Electric car unit at Bangalore). Other importantunitsinthestateincludeTataMotors[Existingtruck&bus(MarcoPolo) units and proposed small car (Nano) unit at Dharwad] and TVS (2wheeler unit at Mysore).ThelistofMajorAutoUnitsinKarnatakaisgivenbelow:

46
Table9ProjectsinAuto&AutoAncillariesSector

Table10ListofMajorAutoAncillariesUnitsinKarnataka
b) Textiles&Garmentssector The textiles & garments industry is the second largest employer in Karnataka after informationtechnologyandisworthnearlyRs5,000crores.Karnatakaproduced6.5 lakh bales of cotton in 200809, each bale weighing around 170 kg. The state
47
produced over 7,200 tons of silk in 200809, amounting to 70% of Indias total production.Thestateisamajorapparelsourcingdestinationfortheglobalmarket, withexportofoverUS$1billion.Bellaryisemergingasmajorjeansmanufacturing centerforinternationalbrands. Bangalore is a major center for textiles and garments. Several leading international brands have their units in the city. Companies such as Gokaldas Exports supply apparel to major global fashion labels. Around 18002000 units (including small, medium & big) are located in & around Bangalore alone, employing over 5 lakhs people.SeveralunitsarelocatedinthePeenyaIndustrialEstate.Doddaballapur,near Bangalore,isemergingasanimportanttextiles&garmentscentre,withtheApparel Park, spread over 187 acres and housing 30 garment units, already operational. ApparelParkPhaseII,spreadover282acres,iscurrentlyunderdevelopmentandthe DoddaballapurIntegratedTextilePark,comingupunderGoIsSchemeforIntegrated TextilePark(SITP),has alreadyreceivedaninvestmentofRs160croreandrecruits 5,000people. c) Agrobased&FoodProcessingsector In 200809, Karnataka produced 10.9 million tons of food grains (including 9.97 milliontonsofcereals&about1milliontonofpulses),1.01milliontonsofoilseeds and 22.1 million tons of sugar cane. The state produced over 206 million tons of coffee in 200607, accounting for nearly 70% of the countrys total production. Karnatakaisalsooneoftheleadingproducersoffruitsandvegetablesinthecountry. SeveralmajorinternationalfoodcompanieshavelocatedtheirfacilityinKarnataka, includingNestle,Unilever,GlobalGreen,Danone,Wrigleys,Heinz,Pepsi,CocaCola, Nissin,OvobelandITCFoods. d) Floriculturesector Karnataka is the leader in floriculture, accounting for 75% of Indias total flower production. The state has the highest area under modern cut flowers and over 40 largeflowergrowing&exportingunits,mostofthemlocatedaroundBangalore.
48
e) Electronicssector Karnataka is one of the leading states in the electronics & telecommunications industry, with 300 leading international players and a number of public sector electroniccompanies,mostofthelocatedin&aroundBangalore.Thestatealsohad overRs.3,000croresofHardwareexportsin200708. f) Engineeringsector Karnataka has a strong engineering base with several PSUs, as well as large & medium privately owned units and small scale units, several of them located in & around Bangalore. The states engineering exports increased from over Rs. 1,048 Crores in 200203 to over Rs. 8,300 Crores in 200809 and constitute about 6% of exportsfromthestate. BharatEarthMoversLtd(BEML)(includingequipments&metrocoaches),Hindustan Machine Tools Ltd. (HMT) and Bharat Heavy Electricals Ltd. (BHEL) are among the leadingPSUsinthissectorinthestate,whileprivatesectorcompaniesincludeBosch andTyco. g) Cementsector TheinstalledcapacityofIndiascementindustryisexpectedtoincreaseto241MTPA byFY2010end,accordingtoareportbyICRAIndustryMonitor.Theindustryislikely torecordanannualgrowthof10%incomingyears. Karnatakasinstalledcapacityofcementproductionwas13.38MTPAin200708.The existingmajorcementplantsinKarnatakaincludeACCLtd.atWadi,GulbargaDistrict (2 plants of 2.59 MTPA & 3.20 MTPA capacities), Vasavadatta Cement at Sedam, Gulbarga District (3.00 MTPA), Rajashree Cements at Sedam, Gulbarga District (3.0 MTPA)andJSWCementsLtd.atTornagallu,Bellarydistrict(2.8MTPASlaggrinding with1.1MTPAPortlandSlagCement).Theprojectsunderimplementation/proposed include JK Cement at Muddapur, Bagalkot District (3.50 MTPA capacity), Ultratech CementatGinigera,KoppalDistrict,SagarCementsLtd.(5.0MTPAcapacity),Dalmia Cement at Yadwad near Gokak, Belgaum District (4.0 MTPA capacity) and Chambal Fertilizers&ChemicalsatFerozabad,Gulbargadistrict(3.2MTPAcapacity).
49
h) Metalsector TheInstalledcapacityofKarnatakasiron&steelindustryin200708was7.29MTPA andisexpectedtoincreaseto43.89MTPAaftercompletionofalltheproposedunits. Several companies in the HospetBellary region are engaged in iron & steel based industries.JindalIron&SteelCompanyLimited(JISCO)promotedJSWSteelLimited (formerly Jindal Vijayanagar Steel Ltd or JVSL), located at Toranagallu in Hospet Bellaryregion,isthestateslargeststeelplant.TheVisweswaraiahIron&SteelLtd. atBhadravathiisanothermajoriron&steelplantinthestate. HindalcohasanaluminiumplantnearBelgaum. i) Micro,SmallandMediumEnterprises(MSME)ClustersinKarnataka ThefollowingtablegivestheMSMEclustersinthestateofKarnataka.Micro,Small and Medium units are located among these clusters which control their logistics functionsindividuallyandaccordingtotheirbudgetaryallocations.
Table11MSMEClustersinKarnataka
MSMEClustersinKarnataka Sl.No 1 2 3 4 5 6 7 8 9 District Bengaluru Bengaluru Bengaluru Bengaluru Bengaluru Bengaluru Belgaum Belgaum Bellary ClusterPlace Bengaluru Bengaluru Bengaluru Bengaluru Bengaluru Bengaluru Belgaum Belgaum Bellary ClusterActivity MachineTools Powerloom ElectronicGoods ReadymadeGarments LightEngineering LeatherProducts Foundry Powerloom JeansGarments
50
MSMEClustersinKarnataka Sl.No 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 District Bijapur Bijapur DakshinaKannada Davangere Darwad Darwad Gadag Gulburga Hassan Koppal Mandya Mysore Mysore Raichur Shimoga Shimoga Shimoga ClusterPlace Bijapur Bijapur Mangalore Davangere Hubli,Dharwad Darwad GadagBetgeri GulburgaGadag belt Arasikere Gangavathi Mandya Mysore Mysore Raichur Shimoga Shikaripura Shimoga ClusterActivity OilMills GrapeProcessing FoodProducts PuffedRice AgricultureImplementsand TractorTrailer IndustrialValves Powerloom DalMills Coir&CoirProducts RiceMills Jagggery FoodProducts Silk LeatherProducts Foundry RiceMills RiceMills
Source:DirectorateofIndustries
51
Figure27MajorProductionCentresinKarnataka
5.2.3 MajorConsumptionCentre Bangalore is the 5th largest metropolitan city in India with a population of around 8 millionandspreadoveranareaof709.53sq.kms. The city has been recently rated as the 2nd most affluent city in India, in terms of lifestyleandconsumptionhabitsaccordingtoanUpperMiddleandRich(UMAR)survey conducted by Nielsen. The annual disposable income of over 650,000 professionals employed in the IT & ITES sector in Bangalore is estimated to be around Rs. 12,000 crores(US$2.79billion)perannum. SomeofthekeycontributorstoconsumptioninBangaloreincluderetailingeneraland automobile,food,FMCGandwhitegoods&consumerelectronicsmarketsinparticular. The growing demand for real estate (residential, commercial/ retail & industrial) has
52
increased the consumption of construction materials, including steel & cement. The highlightsofthesemarketsaregivenbelow: a) RetailMarket Indiaisthe5thlargestretaildestinationgloballyandisrankedasthemostattractive emergingmarketforinvestmentinretailsectorbyATKearney'seighthannualGlobal RetailDevelopmentIndex(GRDI)in2009. Bangalore has over 3.2 million sq ft. of organised retail and 16.3 million sq. ft. is projectedby201213.Thetablebelowdepictsthedifferentretailformatsofferedby thelargeretailplayersinIndia,majorityofwhicharepresentinBangalore:
Table12RetailformatsofRetailMarketPlayersinIndia
Several large retail players have set up Distribution Hubs in Bangalore. Pantaloon Retail(FutureGroup),oneofthebiggestplayersinorganisedretailsector,currently hasover3lakhssq.ft.ofwarehousingspaceinthecity(atHoskote&Nelamangala) and is planning another 3 lakhs sq. ft. in the nearterm future, with land already
53
acquired for adding another 4.5 lakhs sq. ft. in the mediumterm future. Thus, the potentialdemandfromjustonelargeretailplayerisover10lakhssq.ft. Thus,ifweconsiderthegrowingnumberoflargeretailplayersinthecityaswellas the different formats offered by them, the Retail Warehousing requirements in Bangalore,primafacie,isatleast10lakhssq.ft.inthenearfutureand3050lakhs sq. ft. in the next 510 years, at a conservative estimate. Assuming 50% ground coverage,thesiterequirementwouldbeatleast50acres(~21,78,000sq.ft.)inthe nearfutureand100150acres(~43,46,00065,34,000sq.ft.)inthenext510years.
b) Auto&AutoAncillariesMarket Over34lakhvehiclesarecurrentlyregisteredinBangalore,ofwhichabout70%are2 wheelersand15%arecars.Thecityhasanannualvehiculargrowthrateofover10%, with1,000newvehiclesaddedtothecitysroadseveryday,onanaverage.Growthof Bangaloresvehiclepopulationisdepictedinthetablebelow:

Figure28VehicleGrowthRateinBangalore
As per data obtained from the Department of Commercial Taxes, Government of Karnataka the following quantity of Auto & Auto Ancillary products entered Bangalore in a period of one month (November 2009) through the Check Post at TumkurRoad(NH4):
54
Table13QuantityofAuto/AutoAncillaryProductsenteringBangalorethroughTumkurRoadCheckPost (Nov.09)
Sr.no. Commodity 1. Auto&AutoAncillaryProducts
Quantity 27,261 56,986 245
Unit Tons Nos. Boxes
c) AgriculturalProductsMarket Indiasfoodconsumptionisgrowing@2%p.a.ATKearneyestimatesthatthemarket salesoffoodandbeverages(F&B)retailinginIndiaiscurrentlyUS$135billionandis growing@1015%p.a. As per data obtained from the Department of Commercial Taxes, Government of Karnataka the following quantity of processed agricultural/ food products (Grains, pulses,fruits&vegetablesandotherfreshfoodsareexcludedfromchecking)entered Bangalore in a period of one month (November 2009) through the Check Post at TumkurRoad(NH4):
Table14QuantityofAgriProductsenteringBangalorethroughTumkurRoadCheckPost(Nov.09)
Sr.no. Commodity 1. Arekanut,Supari,CocoaandConfectionaries
2.
Palm oil, Sun Flower oil, Coconut oil, Cashew nutoilandotheroil
3. 4.
Groundnut Seeds, Cotton seeds and other seeds Cashew Kernels, Coconut, Coir and related Products
5.
Coffeeseedsandtheirproducts 55
Quantity 5,215 2,511 19,865 10,64,697 1,425 3,432 30,932 1,997 19,108 60,639 9,919 197 629 489 2,062 1,131 2,998 5,414 1,905
Unit Tons Cases Bags Tons Cases Nos. Boxes Tins Ltrs Tons Bags Tons Cases Nos. Bags Boxes Tins Tons Bags
PrefeasibilityStudyforDevelopmentofLogisticsParkDraftPrefeasibilityReport Sr.no. Commodity 6. PepperandBlackpepper 7. 8. Gutka Dry Grapes, Dry Chilly, Chilly Powder and Closures Quantity 101 565 4,525 2,083 181 256 1,209 992 543 956 4,941 856 Unit Tons Bags Cases Bags Tons Cases Bags Boxes Tons Cases Bags Boxes
9.
OtherFoodProductsandMedicines
d) FMCGMarket IndiasFastMovingConsumerGoods(FMCG)marketispoisedtogrow@1012%p.a. for next 10 years to reach US$ 43 billion by 2013 and US$ 74 billion by 2018, accordingtoanewFICCITechnopakreport. e) Electrical&ElectronicsProductsMarket Indiasconsumerelectronicsindustryisestimatedtogrow@1012%p.a.forthenext 10years.Thesalestrends&futureprojectionsofselectconsumerelectronicgoodsis shownbelow:
Figure29Whitegoods&ConsumerElectronicsMarket
56
As per data obtained from the Department of Commercial Taxes, Government of Karnataka the following quantity of Electrical & Electronics Products entered Bangalore in a period of one month (November 2009) through the Check Posts at TumkurRoad(NH4):
Table15QuantityofElectrical/ElectronicsProductsenteringBangalorethroughTumkurRoadCheck Post(Nov.09)
Sr.no. Commodity 1. Electrical,ElectronicsandPrecision Equipments
2. 3.
Cables Transformers, Electricals Generators and Heavy
Quantity 3,442 806 1,69,330 13,058 14,041 5 130 11,751
Unit Tons Cases Nos. Pcs Tons Bundles Tons Nos.
f) Textiles&ApparelsMarket As per data obtained from the Department of Commercial Taxes, Government of KarnatakathefollowingquantityofTextiles&ApparelsenteredBangaloreinaperiod ofonemonth(November2009)throughtheCheckPostsatTumkurRoad(NH4):
Table16QuantityofTextiles&ApparelsenteringBangalorethroughTumkurRoadCheckPost (Nov.09)
Sr.no. Commodity 1. CottonProducts
2.
Apparels, Garments, Fibre, Foam, Yarn, Threadsandrelatedproducts
Quantity 1,55,465 3,520 1,36,616 378 420 222 5,030 7,557 33
Unit Tons Bags Bales Boxes Bundles Tons Nos. Pcs Boxes
57
g) ConstructionMaterialsMarket Bangalore is witnessing a steady increase in construction activity in all categories residential,commercial(office&retail)andindustrial. The following table indicates the demandsupply scenario in residential market in Bangalore:
Table17DemandSupplyScenarioinResidentialMarketinBangalore
Year Year2009 Year2010 Year2011
Demand(DU) 16,68,381 17,26,775 17,87,212
Supply(DU) 14,79,395 15,97,746 17,25,566
DemandSupply Gap(DU) 1,88,986 1,29,028 61,645
FollowingtableindicatesdemandsupplyscenarioinofficemarketinBangalore:
Table18DemandSupplyScenarioinOfficeMarketinBangalore
Year
Cumulative Demand (Millionsq.ft.) 73.14 80.97 87.86
CumulativeSupply (Millionsq.ft.) 63.09 69.01 75.23
DemandSupplyGap (Millionsq.ft.) 10.05 11.96 12.63
Year2009 Year2010 Year2011
As mentioned earlier, Bangalore has over 3.2 million sq ft. of organised retail and 16.3millionsq.ft.isprojectedby201213. i. Cement Indiaspercapitacementconsumptionisestimatedtobe150kgp.a.,lessthan 1/3rdofChinasconsumption.Thedemandforcementisexpectedtogrow@ 10%p.a. ThecementconsumptioninKarnatakawas11.17MPTAin200607. Around 7,500 tons of cement arrive everyday by rail alone at the Satellite GoodsTerminal,Whitefield,BangalorefromtheACCPlantatWadi.Onlyabout
58
30% is stored in the Central Railside Warehouse Company Ltd. (CRWC) warehouseduetospaceconstraints,whilethebalanceisvacatedimmediately toconstructionsitesorotherwarehouses.Theprocessofvacatingthecement for onward storage adds to the handling & inventory cost and increases the chancesofdamage.Hence,itispreferabletostorethecementattheraliside warehouseitselfanddeliveritdirecltytotheconstructionsite.Assumingthat 4050% of the vacated cement is stored in other warehouses, the unmet railside warehousing demand is almost equivalent to the existing storage capacityofaround2.3lakhssq.ft.(~5acresarea). Also, 1370 bags and 80 tons of Cement & Cement Products arrived in one singlemonth(November2009)inBangalorebyroadattheTumkurRoad(NH 4)CheckPost. ii. OtherBuildingMaterials AsperdataobtainedfromtheDepartmentofCommercialTaxes,Government ofKarnatakathefollowingquantitiesofotherconstructionmaterialsentered Bangaloreinaperiodofonemonth(November2009)throughtheCheckPosts atTumkurRoad(NH4)alone:
Table19QuantityofOtherBuildingMaterialsenteringBangalorethroughTumkurRoadCheckPost (Nov.09)
Sr.no. Commodity 1. GraniteBlock,Slabsandrelatedproducts
2.
Timber, Wood, Teak logs and Wooden products
3.
Plywoodandrelatedproducts
4.
CeramicsandTiles 59
Quantity 4,577 38,014 13,372 5,945 2,52,033 4,70,905 18,313 31,711 58,787 19,382 1,073 3,27,736 14,491 3,261 30,706 6,273
Unit Tons Nos. Pcs. Boxes Cu.m Sq.m. Tons Nos. Cu.M. Sq.m. Tons Nos. Pcs. Sq.m. Nos. Boxes
h) Iron&SteelProducts(inlcudingforconstructionpurpose)Market: Indiaspercapitasteelconsumptionisestimatedtobe30kgp.a.,lessthanthe worldaverageof150kgp.a.and350kgp.a.indevelopedcountries. The demand for steel is expected to grow by 7.3% p.a. to reach a per capita figureof165kgp.a. AsperdataobtainedfromtheDepartmentofCommercialTaxes,Government of Karnataka the following quantities of Iron & Steel products entered Bangaloreinaperiodofonemonth(November2009)throughtheCheckPosts atTumkurRoad(NH4)alone:
Table20QuantityofOtherBuildingMaterialsenteringBangalorethroughTumkurRoadCheckPost (Nov.09)
Sr.no. Commodity 1. Iron&SteelProducts
Quantity 22,03,540 695 68,838 733 200 6,176
Unit Tons Cases Nos. Pcs. Bags Bundles
i) OtherGoods/ProductsMarket: AsperdataobtainedfromtheDepartmentofCommercialTaxes,Government of Karnataka the following quantities of other goods/ products entered Bangaloreinaperiodofonemonth(November2009)throughtheCheckPosts atTumkurRoad(NH4)alone:
Table21QuantityofOtherGoodsenteringBangalorethroughTumkurRoadCheckPost(Nov.09)
Commodity Sr.no. 1. Copper,BrassandMetalScrap
Quantity 23,941 1,147 203 548 1,483
Unit Tons Nos. Bags Boxes Bundles
60
PrefeasibilityStudyforDevelopmentofLogisticsParkDraftPrefeasibilityReport Commodity Sr.no. 2. Chemicals, Bottles, Bitumen and related products Quantity 97,767 91 1,50,437 7001 2,842 2,646 58 14,300 5,562 17,420 43,812 79,925 2,668 1,081 123 1,19,759 8,956 8,39,548 28,428 17,488 70,822 2,510 40,000 444 Unit Tons Cases Nos. Pcs. Bags Boxes Bundles Tons Bags Nos. Tons Nos. Pcs. Bags Boxes Tons Cases Nos. Pcs. Bags Boxes Bundles Ltrs Sq.m
3. 4. 5.
Rubber,latexandrelatedproducts Furniture PVCProducts
6.
OtherMiscellaneousProducts
5.2.4 MajorTransportationCentre Bangalore is a Major Transportation Centre due to its location & connectivity as well beingamajorproduction&consumptioncentre. a) As per information from the Karnataka Goods Transporters Association (KGTA), everyday around 30003500 trucks reach the outskirts of Bangalore, out of which around10001500trucksenterthecitywhilearound2000trucksbypassthecityand havenoloading/unloadingrequirementswithinthecity. b) The existing D. Devaraj Urs Truck Terminal at Yeshwanthpur handles around 600 700trucksperday,over&abovethe500smallvehiclesusingthefacilityforcarrying thegoodstothecity.
61
c) The KGTA has expressed the need for the development of a Goods Transport Complex,similartotheTransportNagarsinnorthIndia(e.g.SanjayGandhiTransport NagarinDelhi),ofatleast200acresareaintheNelamangalaregion(NH4).According totheassociation,its600membersrequireaminimumareaofaround4,500sq.ft. (500sq.yds.)eachandits1000agentsrequireaminimumareaofaround2,250sq.ft. (250 sq.yds.) each, while the support facilities like Repair shops require a minimum area of 1,080 sq.ft. (120 sq.yds.). The association has further indicated the requirementofaround1000shopsandaminimumof1015acresforidleparkingof the trucks. The KGTA has also expressed the need for proportionately smaller facilitiesalongHosurRoad(NH7),OldMadrasRoad(NH4)andBellaryRoad(NH7). d) AccordingtotheD.DevarajUrsTruckTerminalLtd.(DDUTTL),thereisademandfor organizedtruckhandlingfacilityofabout30acresareaalongtheBellaryRoad(NH7). DDUTTL is under the process of land acquisition of about 9 acres through the Bangalore Development Authority (BDA) in Kogilu, Yelahanka to create a Truck Terminalfacility.However,theprojecthasbeendelayedforduetolandacquisition issues.Thus,evenifthefacilityisdeveloped,therewillstillbeaDemandSupplygap ofabout21acresalongBellaryRoad(NH7).
5.3 FutureDemandDriversinBangalore
5.3.1SuvarnaKarnatakaIndustrialCorridors(SKDC) a) GoK,inthestatebudgetfor200809,speltoutitsintensiontoimplementtheSuvarna KarnatakaDevelopmentCorridor(SKDC)Programme. b) The overall objective of such Industrial Corridors is to accelerate industrial growth throughinfrastructuresupportandenablecontributiontotheeconomyfrompotential areasalongtheCorridor. c) Coreinfrastructuresuchasenergy,road&raillinkages,inlandcontainerdepots,free trade zones and urban infrastructure would be developed/ augmented to stimulate industrialgrowthalongthesecorridors. d) SKDCproposestocoverabout11Districtheadquartersandmorethan20majortowns alongthehighways/majorroadsandraillinks.AsapartofthisProgramme,themajor industrialcorridors/zones/nodesareproposedalongthefollowinglocations: i. BidarGulbargaBellaryHiriyur ii. TumkurHonnavarviaShimoga
62
iii. ChitradurgaMangaloreviaShimogaUdupi iv. ChitradurgaHospetKoppalRaichur v. ChitradurgaHospetBagalkotBijapur e) In addition to the proposed Industrial Corridors, GoK also proposes to develop followingtenSpecialIndustrialZonesonthePPPmodel,mostofwhichwillhavedirect impactfromtheproposedSKDCProgramme: i. Steel:Bellary,Koppal,Bagalkot,Haveri,Gadag&RaichurDistricts ii. Cement:Gulbarga,Bagalkot,Chitradurga,Belgaum&otherDistricts. iii. Food Processing: Bangalore Rural, Kolar, Belgaum, Gadag, Koppal, Shimoga, Bagalkot,Bijapur,Davangere,MandyaandDharwadDistricts. iv. IT/BT:Mysore,Mangalore,HubliDharwad,Belgaum,Shimoga,Gulbarga,Kolar& MandyaDistricts. v. Automobile:Ramanagara,ShimogaDharwad&KolarDistricts. vi. ReadymadeGarments:BangaloreRural,Tumkur,Kolar,Mandya,Belgaum,Bidar, Dharwad&otherDistricts. vii. Sugarandcogen,power:Bidar,Belgaum,Bagalkot,Shimoga&MandyaDistricts. viii. Pharmaceutical/BioTechnology:Bangalore,&HassanDistricts. ix. PowerGeneration:Raichur,Bellary,Bijapur&ChitradurgaDistricts. x. Media&Entertainment:Bangalore(R)&RamanagaraDistricts. f) The following map shows the proposed Development Corridors and Special Industrial ZonesundertheSKDCProgramme. g) OncetheSKDCProgrammeisimplemented,thelogisticsrequirementsinKarnataka,in general,andBangalore,inparticular,willexponentiallyincrease.
63
Figure30SuvarnaKarnatakaIndustrialCorridors
5.3.2 InformationTechnologyInvestmentRegion(ITIR)2 TheMinistryofInformationTechnologyandCommunication(MIT),GovernmentofIndia (GoI),videGazettenotificationdated28.05.2008,haspublishedapolicyresolutionfor setting up of Information Technology Investment Regions (ITIRs) across the country. The policy is aimed at promoting investment in the Information Technology (IT), InformationTechnologyEnabledServices(ITES)andElectronicHardwareManufacturing
Source:EoIissuedbyKEONICS
64
(EHM)sector.ITIRisexpectedtobespreadover40Sq.Kms.areacovering10,000acres ineachregion. Recognising the potential of the ITIR concept, the Karnataka State Electronics Development Corporation Ltd. (KEONICS), proposes to develop an ITIR in the BangaloreBIAL region of Karnataka. The proposed ITIR covers parts of Devanahalli and Doddaballapur taluks (Bangalore Rural district) and would have provision for Electronic Hardware Zones, housing Electronic Hardware Manufacturing (EHM) Units, apartfromIT&ITESZones. 5.3.3 OtherProposedDevelopments A. HardwareTechnologyPark GoKhasproposedtodevelopaHardwareTechnologyParkspreadoveranareaof 869.09 acres at Bagalur, Mahadevakodigehalli and Hoovinayakanalli villages of Jala hobliinBangaloreNorthtalukinthevicinityoftheBengaluruInternationalAirport (BIA). The Karnataka Industrial Area Development Board (KIADB) has issued final notificationforacquisitionofland. B. SEZs/IndustrialParks The following is the list of approved SEZs / Industrial Parks (IPs) in the state of Karnataka,outofwhichmostoftheSEZs/IPsareinandaroundBangalore.
Table22ApprovedSEZsintheStateofKarnataka ApprovedSEZs/IPsintheStateofKarnataka3 Location Nidege,ShimogaIT/ITES/ElectronicHardwareSEZ145.50Hec FormalApproval NameofPromoter M/sKEONICS
Kundalahalli,KRPuram,BangaloreBioTechSEZ,10.95HectFormal M/sGopalanEnterprisesIndia Approval PvtLtd BellaryRoad,Yelahanka,BangaloreIT/ITESSEZ,12.00HectFormal M/sGulfOilCorporation approval Limited KoorgalliIndl.Area,Mysore10hecIT/ITESformalapproval. RennaisanceDesignBuild PrivateLimited
KIADBIndl.Area,HolenarasipuraRoad,Hassan 100hec Electronic OptoInfrastructureLimited Hardware/IT/ITESformalapproval. KadugodiIndustrialArea,K.R.Puram,Bangalore 23.47hec IT/ITESformalapproval. M/s.ConcordIndiaPrivate Limited
SEZs/IPsapprovedbyBoardofApproval,GOI&UnderestablishmentSource:KarnatakaUdyogMitra(KUM)
65
ApprovedSEZs/IPsintheStateofKarnataka3 Location Chokkanahalli,Yelahanka,Bangalore 10hec IT/ITES formal approval. BangaloreInternationalAirportPremises,Devanahalli,Bangalore 112.96hecAirportBasedSEZformalapproval. NameofPromoter MilestoneBuildconPrivate Limited BangaloreInternationalAirport Limited
HireAmanikere,N.H.7,Devanahalli,Bangalore IT/ITES 10.36hec GokaldasImagesInfrastructure formalapproval. PrivateLimited EPIPIndl.Area,Ganjimutt,Mangalore 10hec IT/ITES formal approvalandnotified.Underimplementation Hoodi,Whitefield,Bangalore.Formalapproval&notified IT/ITES SEZ10hec.Underimplementation Belgaum.Formalapprovalandnotified 103hec under implimentation. Mangalore.Formalapprovalandnotified Petroleumand PetrochemicalsSEZ588hec.underimplimentation. BrigadeEnterprisesPrivate Limited GopalanEnterprisesIndiaPvt. Ltd. QuestSEZDevelopmentPvt. Ltd. MangaloreSEZLtd.
Thumbay,Bantwal,DakshinaKannadaDistrictFormalapprovaland B.A.TechParkPvt.Ltd. notifiedIT/ITESSEZ10hecunderimplimentation. Sonnenahalli,K.R.Puram,Bangalore.Formalapproval IT/ITESSEZ SalarpuriaPropertiesPvt.Ltd. 14hec. Doddenakundi&Mahadevapura,K.R.Puram,Bangalore.Formal BagmaneConstructionsPvt. approvalandnotifiedIT/ITESSEZ12hecFirstphaseoperational Ltd. EPIPIndustrialArea,Ganjimutt,Mangalore.Formalapproval IT/ITESSEZ10hec. NanjangudTaluk,Mysore.Formalapproval ElectronicHardware andIT/ITESSEZ12hec Mahadevapura&Kaggadasapura,K.R.Puram,Bangalore.Formal approvalandnotifiedIT/ITESSEZ14hecUnderimplemenation Nagavara,Bangalore.Formalapproval IT/ITESSEZ 11 hec.Notified&underimplimentation Padubidre,UdupiDistrict.Notifiedand1stphaseoperational Hi techEngineeringSEZ259hec. Bangalore,ElectronicCity3rdPhase,BioTechnologySEZ,43.00 Hectaresformalapprovalandnotified. Bangalore,WhitefieldMainRoad,IT/ITESSEZ,20.24Hectares Bangalore,Bellandur,Amanikane,IT/ITESSEZ,20.23Hectares Bangalore,C.V.RamanNagar,IT/ITESSEZ,12.14Hectares Bangalore,BagurVillage,HoskoteTq.,SEZforHardwareandIT, KinfotechSoftwarePvt.Ltd., OptoInfrastructureLtd. GopalanEnterprisesIndiaPvt. Ltd. KarleInfraProjects SuzlonInfrastructureLtd. KBITS ChaitanyaInfrastructurePvt. Ltd., DivyashreeInfrastructure BagmaneDevelopersPvt.Ltd., IttinaPropertiesPvt.Ltd.,
66
ApprovedSEZs/IPsintheStateofKarnataka3 Location 15.73Hectares.Notifiedandunderimplimentation. BangaloreRuralDistrict,AkkalalenahalliandMallenahalli, DevanahalliTq,IT&ITESSEZ,13.44Hectares ConcordInvestments NameofPromoter
Bangalore,Bellandur,VarthurHobli.Notifiedand1stphase PrimalProjectsPvt.Ltd., operationalElectronicHardwareandIT/ITESSEZ,12.65Hectares Bangalore,JaalaHobliNorth,IT&ITESSEZ,26.30Hectares Bangalore,SadaramangalaIndl.Area,Whitefield,IT&ITESSEZ,10 Hectares Mysore,Hebbal,IT&ITESSEZ,30.99Hectares.Notifiedandunder implimentation. Banglaore,DevarabeesanahalliVillage,VarthurHobli,Bangalore EastTaluk,IT&ITESSEZ,36.85Hectares.Notifiedand1stphase operational. Bangalore,MarathahalliSarjapurOuterRingRoad,IT&ITESSEZ, 19.22Hectares.Notifiedand1stphaseoperational. Shimoga,NidigeVillage,ShimogaTq.EngineeringSectorSEZ,101 Hectares GoldenGateDevelopers PrivateLtd., SanEngineering&Locomotive CompanyLtd., InfosysTechnolgiesLtd.,
VikasTelecomLimited CessnaGardenDevelopersPvt. ltd., KarnatakaIndustrialArea DevelopmentBoard
BangaloreMysoreHighway.ElectronicHardwareandIT/ITESSEZ, TanglinDevelopmentsLtd., 26.6Hectares.Notifiedand1stphaseoperational. Bangalore,Whitefield,IT/ITESSEZ,10.88Hectares.Notifiedand 1stphaseoperational. Mangalore,IT&ITESSEZ,125Hectares.Notifiedand1stphase operational. InformationTechnologyPark Ltd., InfosysTech.Ltd.,
Bangalore,Devarabeesanahalli,Boganahallietc.BangaloreEastTq. AdarshPrimeProjectsPvt.Ltd., IT/ITESSEZ,27.91Hectares.Notifiedand1stphaseoperational. Bangalore,Nagawara&RachenahalliVillages,IT/ITESSEZ,22 Hectares.Notifiedand1stphaseoperational. Bangalore,Khudalahalli,K.R.Puram,IT&ITESSEZ,21Hectares. Notifiedand1stphaseoperational. BommasandraIndustrialArea, Bangalore, BioTechnologySEZ,36 Hectares.Notifiedand1stphaseoperational. Hassan,PharmaSEZ109Hectares Notifiedandunder implimentation. Bangalore(ElectronicsCity)IT/ITESSEZ 5.17hectares Notified and1stphaseoperational. ManyathaPromoters ShmarajandCompany(India) Pvt.Ltd., BioconLimited KarnatakaIndustrialArea DevelopmentBoard WiproInfotech
Bangalore(Sarjapur)IT/ITES,(Area6.84Hectares) Notifiedand1st WiproLimited. phaseoperational.
67
ApprovedSEZs/IPsintheStateofKarnataka3 Location Hassan,TextilesSEZ233.3Hectares.Notifiedand1stphase operational. Mangalore,IT&ITESSEZ66HectaresFormalapproval. Hassan,FoodProcessingSEZ, 115.33Hectares.Notifiedandunder implimentation. NameofPromoter KarnatakaIndustrialAreas DevelopmentBoard, KarnatakaIndustrialAreas DevelopmentBoard KarnatakaIndustrialArea DevelopmentBoard
68
6 SUPPLYSCENARIO
6.1 MajorExistingLogisticsFacilitiesinBangalore(Select)
6.1.1TruckTerminals a) D.DevarajUrsTruckTerminalatYeshwantpur i. The Truck Terminal was developed by the D. Devaraj Urs Truck Terminals Ltd (DDUTTL),aGovernmentofKarnatakaundertaking,andwascompletedin1995. ii. Itisspreadoveranareaof43acres.Totally,500siteshavebeenallotted400to transport/logisticscompaniesand100tocommercialestablishments. iii. Facilities at the Terminal include, parking for 500 trucks alongside the sites, idle parkingfor300trucks(outsourcedtoprivateoperator),fuellingstation,restrooms, firestationandpoliceoutpost. iv. TheTerminalhandlesaround600700trucksperday,over&abovethe500small vehiclesusingthefacilityforcarryingthegoodstothecity.
Figure31SatelliteimageoftheD.DevarajUrsTruckTerminal,Yeswantpur
b) Otherplannedterminals i. TocatertothetrucksthatenterBangaloreeveryday,DDUTTLisalsoplanningto develop 6 more truck terminals along the arterial roads (including NH) radiating fromBangalore.
69
ii. TheBangaloreDevelopmentAuthority(BDA)isintheprocessofacquiring61acres land for 4 of these planned terminals. These include 9 acres at Kogilu, Yelahanka (Bellary Road/ NH7), about 20 acres along Old Madras Road, about 16 acres at Kudregere,Nelamangalaand16.25acresalongHosurRoad(NH7).Theprojectsare proposedtobeimplementedthroughPPPafterBDAhandsoverlandtoDDUTTL. 6.1.2RailwayGoodsTerminals a) SatelliteGoodsTerminalatWhitefield i. The terminal, developed by Indian Railways, was completed in 2002 at a constructioncostofRs.25crores. ii. Warehousing at the terminal is managed by the Central Railside Warehouse Company Ltd. (CRWC), a subsidiary of Central Warehousing Corporation (CWC). CRWC has taken the land on nominal lease from Indian Railways, along with revenuesharingof5%p.a. iii. The total warehousing space is 6 acres (2.6 lakhs sq. ft.) with storage capacity of over 30,000 tons. The warehouses have a height of 78 m with adequate ventilation.Thenormaloccupancyofthewarehousesis70%. iv. Goodshandledattheterminalinclude: Cement: This constitutes 90% of the total goods handled at the terminal. Around 7,500 tons of cement arrives at the terminal everyday by 3 rakes of 2,500 tons each from the ACC Ltd. plants at Wadi. 70% orders are vacated immediately to construction sites or other warehouses, while 30% is stored at the CRWC warehousesattheterminal. Others: These include wheat (10 rakes per month), salt (from ITC), baby food powder, fertilizers,garments(arrivingbyparceltrains),etc.
Figure32SatelliteimageoftheSatelliteGoodsTerminal,Whitefield
b) SAIL&TataSteelRailTerminal&WarehousesatChannasandra c) ByapannahalliGoodsShed
70
6.1.3InlandContainerDepot(ICD)/DomesticRailHub(DRH) a) ICD/DRHatWhitefield i. The ICD/DRH, commissioned in 1993, was developed and is managed by the ContainerCorporationofIndiaLtd.(CONCOR). ii. TheICDhandlesExportcargoof3,000TEUspermonthandImportcargoof2,400 TEUs per month. The outbound goods handled include granite, grinding stone, coffee, auto parts, machinery, UPS, garments, etc. and Inbound goods handled includepaper,stationary,marbles,electronicitems,etc. iii. CONCORoperatesthefollowingRailServices: EXIMServicestoChennaiPort(daily)andCochinPort(weekly) Domestic Services to Tughlakabad, Delhi (Thrice a week) and Shalimar, Kolkata (Twiceamonth)
Figure33SatelliteImageoftheConcorICDWhitefield
iv.
Thetotalareaofthefacilityis125acres,ofwhichthepavedareais35.3acres (15,39,239Sq.ft.).Thefacilitiesinclude:
71
Warehousing for Export (28,255.26 Sq. ft.), Import (18,836.84 Sq. ft.), Bonded (2,33,038.7Sq.ft.)&Domestic(39,826.47Sq.ft.) RailSidings(2forEXIMand1Domestic45Wagonseach) DedicatedrakesforEXIM&Domesticservices EquipmentslikeReachStackers,SlingCranes(10Tons),ForkLifts,CargoTrolleys, Trucks,IntercartingTrailers,ElectronicweighingScales&ElectronicWeighBridge.
b) PearlHarbourContainerTerminal(PHCT)atWhitefield i. The terminal is managed by Pearl Harbour Ports & Warehousing (P) Ltd., a partnership between Central Warehousing Corporation (CWC) and Friends & FriendsShippingPvt.Ltd.,Gandhidham. ii. It has an area of 15 acres with closed warehousing for 27,000 tons, comprising bonded,import&exportcargo. iii. Theterminalcatersto4gatewayportsofJ.N.Port,Chennai,Tuticorin&Cochinand allcontainersaremovedbyroad.
Figure34SatelliteimageofthePearlHarbourContainerTerminal,Whitefield
72
c) ContainerRailTerminals(CRT) The following Container Rail Terminals or CRTs (en route terminals where container train collects and dispatches containers) are operational in the vicinity of Bangalore Cityandcatertotheneedsofthecity: i. ii. iii. 6.1.4AirCargoCentre a) AirIndiaSATSAirCargoCentreatBIA i. The plot area of the facility is 7.4 acres (322917.3 sq. ft.), with Warehouse of 1,93,750.4sq.ft.(in2levels),OfficeAreaof21,527.82sq.ft.andDesignCapacityof 1,50,000TPA. ii. It is equipped with latest Material Handling System (MHS) to handle general, perishableandspecializedcargo,includingcourier&mail. b) MenziesAviationBobba(Bangalore)Pvt.Ltd.(MABB)AirCargoCentreatBIA i. The plot area of the facility is 7.3 acres (3,17,989.3 sq. ft.), with International Warehouseof(1,07,000Sq.ft.)&DomesticWarehouseof(49,000Sq.ft.)in4levels andOfficeAreaof21,527.82sq.ft. ii. It has a Design Capacity of 1,50,000 TPA in Phase1, 1,90,000 TPA in Phase2 & 2,80,000TPAinPhase3. iii. The facility is equipped with Lift & Run System for Unit Load Device (ULD) movement. 6.1.5RetailWarehousing Several large Retail/ FMCG players have setup their logistics hubs in & around Bangalore. These include: Pantaloon Retail (Future Group) at Hoskote & Nelamangala,
73
ByappanahalliGoodsShed SatelliteGoodsTerminal,Whitefield Hosur(TamilNadu)
RelianceRetailatNelamangala&Dobbaspet(proposed),Lifestyleat6differentlocations aroundthecityandHindustanUnileverLtd.(HUL)atNelamangala. a) PantaloonRetail(FutureGroup)WarehousesatHoskote&Nelamangala Pantaloon Retail (Future Group) is one of the largest players in the organized retail sectorinthecountry.ThelogisticsfunctionsaremanagedbyFutureLogistics,agroup companysetupforthepurpose. i. HoskoteWarehouses: TwowarehouseshavebeentakenonlongtermleasefromM/sKaveriLogistics @Rs.10persq.ft.permonth. Thewarehousescatertoapparel&generalitems(2,00,000sq.ft.)andfurniture (45,000sq.ft.),respectively Thefacilitiesprovidedbythedeveloperinclude: Truckparking/dockingareaandstackingareafor60TEUs. KirbytypeBoxstructurewith5mclearheight,curvedGalviliumsheetroofing, anddockdoorsforloading/unloading ThefacilitiesaddedbyFutureLogisticsinclude: Zonesforeveryitem Racks(upto4levels,excludingfloor) Shelves(Shelvingareaconstitutes4050%oftotalareaincaseofappareland 30%oftotalareaincaseofgeneral) MaterialHandlingEquipment(MHE)andpalletsformovementofgoods InstallationofWarehouseManagementService(WMS) InventoryManagement: FutureLogisticsmaintains20daysofinventoryatthewarehousesand10days inventoryattheretailstorefortheBigBazaarformat TheInventoryCarryingCostsconstitutes1.5%7%ofthetotalcost ii.NelamangalaWarehouses: Twowarehousesof30,000sq.ft.eachtocatertofoodandconsumerdurables/ electronics,respectively. iii. ThetotalexistingwarehousinginBangaloreis3,05,000sq.ft.andthetotalno.of employeesis540.
74
iv. FutureLogisticsisintheprocessofdevelopinganothermodernfacilityinBangalore spread over a total land area of 34 acres, with 3 lakhs sq. ft. warehousing on 6.5 acres land in Phase 1, with potential for adding another 4.5 lakhs sq. ft. Modern handlingsystems,clearheightof13mandefficientTrafficManagementhavebeen plannedatthefacility. 6.1.6 LogisticsParks SeveralLogisticscompaniesareintheprocessofsettingupLogisticsParksinandaround Bangalore.These,interalia,include: a) Safexpress Safexpress Pvt. Ltd. is one of the leading logistics companies of the country. Its Bangalorefacility(SafexpressCargoComplex)islocatedontheSarjapurHoskoteRoad (NH207)atKoralur,Nandavathiwithtotalareaof33.5acres.Operationscommenced inFebruary2006.Thefacilityincludes: Hub Operations (Loading/ Unloading for Express Cargo) in 6.5 acres, comprising 60% open/ truck parking space and 1,25,000 sq.ft. builtup area (BUA) for the operations Warehousingin27acres,comprising45%open/truckparkingspaceand5,00,000 sq.ft.warehouses. Pharma products, Apparels, Electrical & Electronics and ITHigh tech electronics comprise70%oftheproductshandledbythefacility.Thecompanydidnothandlethe movementofcommodities.
Figure35SafexpressFacilityDocks(Numbered&Leveled)
75
Figure36SafexpressFacilityHuboperations
Thecompanydidnothaveanyimmediateexpansionplansasthepresentcapacitywas planned to cater to the current requirements. However, the company had already acquired40acresoflandatHoskote(neartheVolvofactory)forfutureexpansion. Safexpress also plans to develop 32 Logistics Parks consisting of 6 million sq. ft. of additional warehousing space across the country (including Bangalore, Nagpur, Ahmedabad,Chennai&Kolkata)inthenextcoupleofyears.Thetotalinvestmenton these32LogisticsParkshasbeenestimatedatRs.600crores. b) DRSLogistics DRS Logistics Private Limited has proposed setting up a total of 2million sq.ft. warehousingspaceatHosur(nearBangalore)andSriperembudurinTamilNaduand HyderabadinAndhraPradeshbytheendofthenextfinancialyear(201011)aspart ofaRs450croreexpansioninsouthIndia. DRS proposes to float a special purpose vehicle (SPV) DRS Warehousing South PrivateLimitedinwhichtheprospectivePEinvestorwillhold50percentwhileDRS willinvesttherestbywayofland.Thecompanyhasalreadyacquired72acres,ofthe required100acresfortheexpansion. The proposed warehousing facilities in south India will primarily cater to the retail industry,offeringbothrentaland3PLservices.
76
7 PROJECTLOCATION
7.1 EmergingLogisticsHubsinandaroundBangalore
a) The map below shows the emerging logistics/ warehousing hubs in & around Bangalore:
BIADevanahalli Bengaluru International Airport (BIA) WhitefieldHoskote
PeenyaNelamangala
Electronics CityBommasandra
Figure37EmergingLogisticsHubsinandaroundBangalore
b) Salientfeaturesoftheselocationsinclude: i. WhitefieldHoskoteregion Location&Connectivity: The region is served by the NH4 (towards Chennai) and the Bangalore Chennaimainrailwayline. The Outer Ring Road or ORR (via K.R. Puram) provides road connectivity to otherhighwaysaswellasotherareasofBangalorecity. Industries: Severalindustriesarelocatedintheregion,besidesIT&ITESunits.
77
Logistics&Warehousing: It is an established logistics & warehousing location, with presence of the CONCOR ICD/ DRH, Pearl Harbour Container Terminal, Indian Railways SatelliteGoodsStation(withCRWCwarehousing),retailwarehouses,etc. ii. ElectronicsCityBommasandraregion Location&Connectivity: The region is served by the NH7 (towards Hosur/ Krishnagiri/ Chennai/ SalemandpartofboththeGoldenQuadrilateral&NorthSouthCorridorof NHAI)andtheBangaloreSalemrailwayline. The ORR (via Silk Board Junction) provides road connectivity to other highwaysaswellasotherareasofBangalorecity. The upcoming Electronics City elevated highway and proposed Metro line (PhaseII)wouldfurtherimproveitsconnectivitytothecity. Industries: It is an important industrial region with several units located within Electronics City, Bommasandra Industrial Area, Jigani Industrial Area and SIPCOT,Hosur(TamilNadu). Logistics&Warehousing: Itisanimportantwarehousinglocation. iii. PeenyaNelamangalaregion Location&Connectivity: The region is served by the NH4 (towards Tumkur/ Hubli and part of the GoldenQuadrilateralofNHAI)andtheBangaloreHublimainrailwayline. TheORR(viaPeenya)providesroadconnectivitytootherhighwaysaswellas otherareasofBangalorecity. The upcoming elevated highway and Metro line would further improve connectivitytothecity Industries: It is a major industrial region with several units located within Yeswantpur IndustrialArea,PeenyaIndustrialArea,Nelamangala&Dobbaspet. Logistics&Warehousing: It is also an established logistics & warehousing location, with presence of theD.DevarajUrsTruckTerminalandseveralindustrial&retailwarehouses.
78
iv. BIADevanahalliregion Location&Connectivity: The Bengaluru International Airport (BIA) provides good domestic & internationalairconnectivityforbothpassenger&freight TheregionisservedbytheNH7(towardsAnanthapur/Hyderabadandpart oftheNorthSouthCorridorofNHAI)andtheYelahankaChikaballapurKolar railwayline. The proposed ChikaballapurPuttaparthi (SSP Nilayam) railway line would providedirectrailconnectivitytonorthKarnataka&Hyderabad. TheORR(viaHebbal)providesroadconnectivitytootherhighwaysaswellas otherareasofBangalorecity. The proposed elevated highway between Hebbal & Yelahanka and the proposedHighSpeedRailLink(HSRL)toBIAwillfurtherimproveconnectivity tothecity. Industries: Currently,onlyfewindustriesarelocatedinthearea. Several major projectshave beenproposed in the region, including the BIA AirportCity,DevanahalliBusinessPark(DBP),theHardwareTechnologyPark andtheBangaloreDevanahalliITInvestmentRegion(ITIR). The Apparel Park (Phase I & upcoming Phase II) and the Integrated Textile ParkatDoddaballapurarealsolocatedinproximity. Logistics&Warehousing: Itisanemerginglogistics&warehousinglocation,withthepresenceofBIA beingamajoradvantage. c)A brief comparison of the emerging logistics/ warehousing hubs in & around Bangaloreisgivenbelow:
Table23ComparisonoftheEmergingLogistics/Warehousinghubsin&aroundBangalore
Particulars
Electronics City Bommasandra 2025km
Peenya Nelamangala
Whitefield Hosakote
BIA Devanahalli
ProximitytoBIA Proximitytorailwayline ProximitytoNH/ORR Distancefromcitycentre
1520km
1520km
3035km
79
7.2 PreferredProjectLocation
a) Basedonthesalientfeaturesandcomparisonoftheemerginglogistics/warehousing hubs in & around Bangalore (given in 7.1 above), the BIADevanahalli region has, primafacie,emergedasthepreferredlocationfortheproposedproject.Theareafalls under the Bangalore International Airport Area Planning Authority or BIAAPA jurisdiction. b) As mentioned earlier, the biggest advantage of the location is the presence of BIA, whichwouldfacilitateexpressandaircargomovement. c) Besides retail, industrial & agricultural warehousing for Bangalore city & the surroundingregion,theLogisticsParkwouldalsoservetheApparelPark&Integrated Textile Park at Doddaballapur, proposed projects like BIA Airport City, Devanahalli Business Park, Hardware Technology Park & ITIR and other developments in the region. d) ThemapbelowshowsthelocationofBIAAPAwithrespecttoBangalorecity.

Bangalore Bangalore North Taluk Doddaballapur BIAAPA Area
Devanahalli Business Park
40 km
Bengaluru International Airport
Figure38LocationofBIAAPA
80
PrefeasibilityStudyforDevelopmentofLogisticsParkDraftPrefeasibilityReport e) ThemapbelowdepictstheimmediatesurroundingsofBIA&Devanahallitown.
Figure39LocationofBangaloreInternationalAirport(BIA)&Devanahallitown
81
8 PROPOSEDDEVELOPMENT
8.1 SuggestionsonSiteRequirements
a) Arearequirements: i. Asmentionedin5.2.4d),thereisademandfororganizedtruckhandlingfacilityof atleast21acresareaalongtheBellaryRoad(NH7). ii. As mentioned in 5.2.3 f) i, it is estimated there is a railside warehousing requirement of at least 2,30,000 sq. ft. (~5 acres) for cement alone. Other bulk commoditieslikewheat,fertilizers,salt,etc.wouldrequirearound0.51acrearea. Therailsidingwouldrequireanother1.5acresarea. iii. TheLogisticsParkwouldalsoservetheexistingandproposeddevelopmentsinthe region,asmentionedin7.2c),andwouldrequireanICD/DRHtoservethelogistics needsoftheregion.Basedoncasestudies,anICDwouldrequireatleast10acres land,includingcontainerstackingarea&warehousing,whiletherailsidingwould requireanother1.5acresarea. iv. Proximity to BIA necessitates the inclusion of an Air Cargo Centre in the Logistics ParktosupplementtheexistingfacilitiesatairportandtheproposedMysoreSales InternationalLtd.(MSIL)facilityintheDBP.TheAirCargocentremaybearelatively smallerfacilitytocatertothedemandsoftheproposeddevelopmentsintheregion aswellasoverflowfromtheabovementionedfacilities.Basedonthecasestudies oftheexistingfacilities,itisestimatedthatanareaof23acresmayberequiredfor theproposedAirCargoCentre. v. Asmentionedin5.2.3a),itis,primafacie,estimatedthatatleast10,00,000sq.ft. of warehousing space may be required in Bangalore by the large retail players in thenearfutureand30,00,00050,00,000sq.ft.inthenext510years.Assuming 50%groundcoverage,thesiterequirementwouldbeatleast50acres(~21,78,000 sq.ft.)inthenearfutureand100150acres(~43,46,00065,34,000sq.ft.)inthe next510years.Theaboverequirementsdonotincludeunorganizedretail,which constitutes over 90% of the total retail market. Hence, the actual retail warehousingrequirementsaremuchhigher.
82
vi. Basedoniv,thereispotentialforlogistics/warehousingfacilityofatleast80acres inthenearfutureand140180acresinthenext510yearsintheDevanahalliarea. However,ataconservativeestimate,afacilityof150acresareamaybeconsidered attheproposedlocation. b) In order to facilitate multimodal transportation and minimize the land acquisition/ R&Rrequirementsforprovidinglastmileroad/railconnectivity,thesiteshouldeither belocatedalongorincloseproximitytobothNH7&YelahankaChikaballapurKolar RailwayLine. c) Othersiterequirementswould,interalia,include: Adequatewater&powersupply Relativelyflatterraintominimizelanddevelopmentcosts Relativelyregularshapeofplottooptimizewarehousing/logisticsfacilities Accesstopublictransportfortheemployeesworkingatthepark
8.2 SuggestionsonProjectPhasing
Based on 8.1 a) v, a facility of 150 acres may be considered at the suggested location. However,theneartermfuturedemandisaround80acresandpotentialdemandoverthe next510yearsisestimatedas140180acres.Thus,thefollowingphasingofdevelopment issuggested:
Table24Suggestedareafordifferentphasesofdevelopment
Phases PhaseI PhaseII(Yr5) PhaseIII(Yr10) Total
Area 50acres 50acres 50acres 150acres
83
8.3 SuggestionsonProductMix
Basedontheassessmentofthefactorsmentionedinsection8.1,thefollowingProduct MixissuggestedwithintheproposedLogisticsPark. a) Multimodal/IntegratedLogisticsTransportCentre Road: Truck Terminal, including Agent Offices & Driver Facilities/ Dormitories Rail:Railsidings(forbulk/parcelrakesandcontainertrains) b) BulkWarehousing Railsidewarehousingforbulkgoods OfficesforAgents c) InlandContainerDepot(ICD)/DomesticRailHead(DRH) Containerstackingarea CustomsBonded/DomesticWarehousing,includingcoldstorage OfficesforCustoms&Agents d) Aircargocentre Stuffing/destuffingarea CustomsBonded/DomesticWarehousing,includingcoldstorage OfficesforCustoms&Agents e) OtherWarehousing: GeneralWarehousing,includingAgentOffices Customized Warehousing (e.g. Retail Distribution), including Agent/ ClientOffices ColdStorage,includingAgentOffices HubOperations(Loading/UnloadingforExpressCargo)
84
f) OtherCommonFacilities: Administration&otheroffices Restaurants,restrooms,etc. Utilities (Power Backup, T&D Network, IT & Telecom Infrastructure, WaterSupply&SewerageSystem,etc.) GreenArea The above facilities include most facilities that can be planned within a typical logistics park, considering the modes of transportation available in the project location and the rangeofservicesthatcanbeaccommodatedaspertheLogisticsValueChain. 8.4 BroadLandutilizationandfacilities TheproposedlandutilizationpatternforPhaseIisdescribedbrieflyasfollows:
Table25BroadLandUtilizationandFacilities
Area LandUse Coveredwarehouse ContainerStackingArea &TruckParkingArea Road(2.2km),Railway Siding(2km)& Circulation Greenareas&Other SupportInfrastructure Total (inAcres) 25 7.50 12.5 5.0 50 InSq.ft. 10,89,004.0 3,26,701.3 544502.2 217800.9 21,78,009.0 % 50% 15% 25% 10% 100%
85
9 PRELIMINARYPROJECTFINANCIALS
A preliminary financial model has been prepared to assess the Estimated Project Cost, Estimated Revenues and the Project Returns. The Cost and Revenue assumptions were takenbasedongrossbulkestimateonlytoassessthefeasibilityoftheproject.However,it isrecommendedthattheProjectFinancialsmaybefirmeduponlyafterpreparationofthe DPR for the project. The Preliminary Financial Model is given in Annexure 2. The salient featuresofthepreliminaryfinancialmodelarehighlightedinthissectionofthereport.
9.1 Assumptions
TheassumptionsaremadeundertwoheadstheCostandtheRevenue.
9.1.1 CostAssumptions Thefollowingaresomeofthebasecostassumptionsmadeinthepreliminaryfinancial modeltoworkouttheEstimatedProjectCost.Thesearethecostassumptionsmadefor PhaseIdevelopment.

Table26CostAssumptions
Assumptions DevelopmentCostforBuiltupArea ofOfficeSpace&Warehouses DevelopmentCostforContainer StackingArea DevelopmentCostfortheInternal RoadNetwork DevelopmentCostfortheRail Network DevelopmentCostforTruckParking Spaces CostofPowerBackup CostofTransmission&Distribution NetworkPower DevelopmentofTelecom Infrastructure WaterSupplyInfrastructure SewerageTreatment
86
Amount 1,000 30 3,00,00,000 7,00,00,000 398 4,00,00,000 4,00,00,000 3,50,000 2,25,00,000 1,27,00,000
Unit INR/sq.ft. INR/sq.ft. INR/KM INR/KM INR/sq.ft. INR/MW INR/MW INR/KM INR/MLD INR/MLD
ThecostassumptionsforPhaseIIandPhaseIIIaremadebasedonaCapexInflationof 7%p.a.
9.1.2 RevenueAssumptions The following are some of the base revenue assumptions made in the preliminary financial model to work out the Estimated Revenues. These are the revenue assumptionsmadeforPhaseIdevelopment.
Table27RevenueAssumptions
Assumptions Amount Unit WarehouseRentals 25.00 INR/sq.ft./month Container Stacking Area Rentals 9.61 INR/sq.ft./month (CalculationsgiveninFinancialModel) Truck Parking Spaces Rentals 3.75 INR/sq.ft./month (Calculations given in Financial Model) WaterSupplyCharges 5.00 INR/KL SewerageTreatmentCharges 5.00 INR/KL The revenue assumptions for PhaseII and PhaseIII are taken by inflating the above figures by certain percentages. Warehouse Rentals form the major portion of the revenuecomponent.TheRentalInflationistakenas5%p.a. TheOccupancyofthedifferentfacilitiesinPhaseIovertheyearsistakenasfollows:
Table28OccupancyforPhaseIfacilities
FacilityPhaseI
Year1
Year2
Year3
Year4
Warehouses Construction 75% 75% 85% ContainerStacking Construction Area 75% 75% 85% 85% TruckParkingArea Construction 60% 75% 75% 75% In PhaseII and PhaseIII the occupancy is taken in a similar way. The PhaseII constructionstartsintheYear5andthePhaseIIIconstructionstartsintheYear10.
Year5to Year30 95%
87
9.2 EstimatedProjectCost
9.2.1 PhaseI The detailed print out of the preliminary financial model, prepared for assessing the financialviabilityoftheproject,isenclosedwiththisreport.Thefigures,calculatedto arriveattheEstimatedProjectCostforPhaseIarelistedbelow:
Table29EstimatedProjectCostPhaseI
CapitalExpenditure Amount(Rs.Lakh) Warehouses&Offices 10,890 ContainerStackingArea 65 Roads 664 RailSiding 1400 TruckParkingSpaces 434 BasicAmenities 109 PowerBackup 200 T&DNetwork 200 TelecomInfrastructure 7 WaterSupply 68 SewerageSystems 29 Contingencies 703 Interest During 704 Construction TotalCapitalCost 15,473 TheInteresttobepaidduringconstructiontoservicethedebtcomponentiscapitalised. ProjectContingencyof5%hasbeenassumedintheProjectCost.
9.2.2 PhaseII&PhaseIII EstimatedProjectCostforPhaseIIandPhaseIIIiscalculatedbytakingaCapexInflation of7%p.a.,overthecostassumptionsmadeforPhaseIdevelopment.TheProjectCosts forPhaseIIandPhaseIIIareasbelow:

88
Table30EstimatedProjectCostPhaseII
CapitalExpenditure Warehouses&Offices ContainerStackingArea Roads RailSiding TruckParkingSpaces BasicAmenities PowerBackup T&DNetwork TelecomInfrastructure WaterSupply SewerageSystems Contingencies InterestDuring Construction TotalCapitalCost
Amount(Rs.Lakh) 14,275 86 870 1835 569 143 262 262 9.18 89 38 922 923 20,282
Table31EstimatedProjectCostPhaseIII
CapitalExpenditure Warehouses& Offices ContainerStackingArea Roads TruckParkingSpaces BasicAmenities PowerBackup T&DNetwork TelecomInfrastructure WaterSupply SewerageSystems Contingencies InterestDuring Construction TotalCapitalCost
89
Amount(Rs.Lakh) 18,711 112 1,141 745 187 344 344 12 117 50 1,088 1,089 23,940
9.3 EstimatedRevenues
TheProjectRevenuesarecalculatedonthebasisofthebaserevenueassumptionsmade earlier. The following table shows the Project Revenues in the first year of operation of thePhaseIdevelopment.
Table32ProjectRevenuesinthefirstyearofoperationPhaseI
Revenues Amount(Rs.Lakh) WarehouseRentals 1,470 ContainerStackingRentals 188 TruckParkingRentals 29 BasicAmenitiesRentals 1 WaterSupplyCharges 5 SewerageTreatmentCharges 4 TotalRevenues 1,698 TheProjectRevenuesforthesuccessiveyearsofoperationtill30yearsarecalculated consideringarevenueinflationof5%. TheProjectRevenuesforthePhaseIIandPhaseIIIdevelopmentareasfollows:
Table33ProjectRevenuesinthefirstyearofoperationPhaseII
Revenues WarehouseRentals ContainerStackingRentals TruckParkingRentals BasicAmenitiesRentals WaterSupplyCharges SewerageTreatmentCharges TotalRevenues
Amount(Rs.Lakh) 1,786.98 229.07 35.74 1.49 6.51 5.54 2,065.32
TheProjectRevenuesforthesuccessiveyearsofoperationtill30yearsarecalculated consideringarevenueinflationof5%.
Table34ProjectRevenuesinthefirstyearofoperationPhaseIII
Revenues WarehouseRentals ContainerStackingRentals TruckParkingRentals

90
Amount(Rs.Lakh) 2,172 278 43
Revenues Amount(Rs.Lakh) BasicAmenitiesRentals 2 WaterSupplyCharges 9 SewerageTreatmentCharges 7 TotalRevenues 2,512 TheProjectRevenuesforthesuccessiveyearsofoperationtill30yearsarecalculated consideringarevenueinflationof5%.
9.4 ProjectReturns
TheDebt:EquityRatioistakenas70:30.TheLoanrepaymentperiodis7yearsandthe LoanMoratoriumonRepaymentisoneyeari.e.thefirstyearoftheconstruction. TheProjectReturnsareassessedbycalculatingtheProjectInternalRateofReturn(PIRR) andEquityInternalRateofReturn(EIRR). TheProjectReturnsarecalculatedafterconsideringthefollowingexpenditure: Annual Operation & Maintenance cost of the common infrastructure facilities @ 3%ofthecapex. RenovationExpenditurefortheCommonInfrastructurefacilitiesonceineveryfive years@10%ofthecapex. Interesttoservicethedebt@13%perannum. Depreciationofassets@3.50%perannum. IncomeTax@22.66%perannum.
ThefollowingaretheEstimatedProjectReturnsasperthepreliminaryfinancialmodel:
Table35EstimatedProjectReturns
Development PhaseI PhaseII PhaseIII
ProjectIRR 16.63% 15.46% 16.29%
EquityIRR 15.81% 14.43% 15.36%
91
10 SUGGESTEDPROJECTSTRUCTURE&PROJECTBENEFITS
10.1 SuggestedProjectStructure
a) ItissuggestedthattheprojectbestructuredonPublicPrivatePartnership(PPP)Basis, with an operator selector through a competitive bidding process. The operator for PhaseImaybegiventheoptionofFirstRightofRefusalforPhaseIIandsimilarlyfor thesubsequentPhase/s. b) ItisalsosuggestedthatKSIIDC/GoKprovidetherequisiteland(50acresineachPhase and150acrestotally)inlieuof26%equityintheProjectSPV/s. c) Thus,KSIIDC/GoKequityof26%wouldbewortharoundRs.12.07CroresinPhase1 andaroundRs.15.82Crores&Rs.18.67CroresinPhases2&3.
10.2 ProjectBenefits
a) The development of the Logistics Park is expected to augment the logistics infrastructureinBangalore. b) TheLogisticsParkisexpectedtoboostthedevelopmentofthesurroundingareaand eachPhaseisexpectedtogenerateadirectemploymentofaround3200. c) BasedonthePreliminaryProjectFinancials,theNPVofGoKReturnsareestimatedto beRs.18.82CroresforPhase1,Rs.18.66CroresforPhase2andRs.27.00Croresfor Phase3.
50 acres land in lieu of 26% Equity
KSIIDC/ GoK
Development on PPP Basis Through Transparent Competitive Bidding Process
Developer
Equity Returns (Equity IRR: 15.81%)
Direct Employment Generation: ~3,200 NPV of GoK Returns: Rs. 18.82 Cr
Figure40ProjectStructureforPhase1Development
92
11 CONCLUSIONSANDRECOMMENDATIONS
11.1 SummaryofFindings
a) BasedonthePreliminaryAssessmentoftheDemandDrivers&SupplyScenario,there is,primafacie,needfordevelopmentofaLogisticsParknearBangalore. b) It is suggested to locate the Logistics Park in the emerging logistics hub of BIA Devanahalli(BIAAPAJurisdiction)alongorincloseproximitytoNH7&theYelahanka ChikabalapurKolarrailwayline. c) Itissuggestedtotakeup50acres(10,89,000sq.ft.builtuparea)inPhase1,followed byadditional50acreseachinPhases2&3,withanoveralldevelopmentof150acres. However,thesamemayneedtobefirmedupvideaDetailedDemandAssessmentas partoftheDetailedProjectReport(DPR). d) The Suggested Product Mix includes Multimodal/ Integrated Transport Logistics Centre (including Truck Terminal & Rail sidings), Inland Container Depot (ICD)/ Domestic Rail Head (DRH), Air cargo centre, Bulk Warehousing, Retail & other WarehousingandOtherCommonFacilities. e) AsperthePreliminaryFinancialAssessment,theEstimatedProjectCostisRs.154.73 CroresforPhase1,Rs.202.82CroresforPhase2andRs.239.40CroresforPhase3. The Revenue Streams have been assumed based on select industry benchmarks. Accordingly,theProjectReturns(EquityIRRof15.81%forPhase1,14.43%forPhase2 and15.36%forPhase3)havebeencalculated.However,theestimatesmayneedto beconfirmedbasedontheDPR. f) ItissuggestedthattheprojectbestructuredonPPPBasis,withanoperatorselector through a competitive bidding process, and KSIIDC/ GoK provide the land in lieu of 26%equity.TheNPVofGoKReturnsareestimatedtobeRs.18.82CroresforPhase1, Rs.18.66CroresforPhase2andRs.27.00CroresforPhase3. g) The development of the Logistics Park is expected to augment the logistics infrastructureinBangalore,boostdevelopmentofthesurroundingareaandgenerate adirectemploymentofaround3200ineachphase.
93
11.2 RiskAllocationandMitigation
AppropriateriskmitigationstructureswouldhavetobeevolvedfortheProject.Various risksassociatedwiththeProjectandbroadmitigationstructureisexplainedbelow: a) TrafficRisk Thisincludesriskarisingoutofshortfallinprojectedcargotrafficvolumes.Thiscanbe mitigatedbytheportoperatorby: i. Positioning the tariffs/ rentals competitively compared to other Logistics Parks/ Warehouses/ICDs/DRHs/TruckTerminals,etcinBangalore. ii. Takingeffectivestepsformarketingthelocation&servicesamongstthetargetusers (e.g. 3PL operators, logistics companies, retail chains, container train operators, truckoperators,etc.). iii. Enteringintolongtermarrangementswithcaptiveusers. b) LogisticsRisk Thisincludesriskarisingoutofnoncompletionofthelastmileroad/railconnectivity. ThiscanbemitigatedbyGoKbypursuingthematterwithNHAI/MinistryofRailways,if required. c) LandAcquisitionRisk This includes risk arising out of land acquisition, R&R, etc, if required. This can be mitigatedbythedeveloperofferingafaircompensationandrehabilitationpackageto thelandowners. d) StatutoryRisk This includes risk arising out of nonissue of statutory permissions, environmental clearances, etc. This can be mitigated by GoK taking steps to grant or facilitate all necessaryclearancesrelatedtotheproject. e)DevelopmentRisk Thisincludesriskarisingoutofsiteandconstructionrelatedissueslikesoilconditions, materials used, quality & type of construction, etc. This can be mitigated by the developertakingallfactorsintoaccountwhilepreparingtheDPR.
94
f) FinancialRisk KIPDChastakenconservativeassumptionsinPreliminaryProjectFinancialsintermsof constructioncostsandestimatesofrevenues,whichmitigatesthedownsiderisksofthe Project. g) PoliticalRisk: Thesecanbemitigatedbyeffectivelegaldocumentationandinsurance.
11.3 RecommendationsonWayForward
a) GoK may appoint KIPDC as Project Development and Transaction advisor for comprehensive development of the project and bidding out the project through a transparentandcompetitivebiddingprocess. b) On award of the Project development and Bid process management assignment to KIPDC, it is estimated to take around 1418 months to complete the project development activities and in bidding out the project after conducting requisite studies,preparationofDPR,obtainingmandatoryapprovals,projectstructuring,bid documentationandbidprocessmanagement. c) BasedontheDPR,GoKmaytakestepsforacquiringtherequisiteland,ifrequired.
95

19.key Logistics Park

Diunggah oleh

Informasi Dokumen

Deskripsi Asli:

Judul Asli

Hak Cipta

Format Tersedia

Bagikan dokumen Ini

Bagikan atau Tanam Dokumen

Opsi Berbagi

Apakah menurut Anda dokumen ini bermanfaat?

Apakah konten ini tidak pantas?

Hak Cipta:

Format Tersedia

19.key Logistics Park

Diunggah oleh

Hak Cipta:

Format Tersedia

PrefeasibilityStudyforDevelopmentofLogisticsPark nearDevanahalli,BangaloreonPPPBasis DraftReport

2.2.1 2.2.2 2.2.3 2.2.4 2.2.5 2.3 2.4 2.5 3

3.2.1 3.2.2 3.2.3 3.2.4 4

5.3.1 5.3.2 5.3.3 6

6.1.1 6.1.2 6.1.3 6.1.4 6.1.5 6.1.6 7

9.2.1 9.2.2 9.3 9.4 10 10.1 10.2 11 11.1 11.2 11.3

Repackingofrawmaterials intoeconomicbinquantities Storage Picking OrderAdministration Inventorycontrol(Realtimestock information)

Storage Picking Repackingintoeconomicdeliveryquantities

storedonbehalfoftenants(suppliers) Towmotorsandtrolleystodistribute rawmaterialsinaspecified frequency

Traditional Service Providers

Headquarters of Largest most of the logistics market(1/3rd) largeLSPs

Growingat25%,p.a,India's3PLindustryispoisedtoexpanditsmarketmanifold.Select majorserviceproviders/organizationsinIndiaalongwithdetailspertainingtotheirscale ofoperationislistedbelow:

No.ofwarehouses 494 36 35 N.A. N.A. 151 46 200

Typeof Structure Equipment

Preengineeredstructure Docklevellers,mechanised loading,conveyors,cranes etc. SophisticatedWarehouse ManagementSystem present Sprinklers,smokedetectors etc.

Technology Absenceof automatedsystems andWMS Fire Manualfire Fighting extinguishers

PortbasedSEZfor MultiProduct inclusiveofFTWZ FTWZ

VillageSai,Taluka Panvel MannurVillage, Sriperembdur Taluk, Kancheepuram

Nameofthe developer JafzaChennai BusinessParks PrivateLimited Jhunjhunwala VanaspatiLtd.

Location Distt. VallurVillage, PonneriTaluka, TirvallurDistrict Sahupuri,Distt. Chandauli

Areain Acres 340.95

HaldiaFreeTrade Warehousing PrivateLimited

VillageIbrahimpur, Junaidpur Urf,Moujpur, Bulandshar Haldia

MultiServicesSEZ withFTWZ&25 MWCaptivePower Plant FTWZ

Amtritsar,Punjab Vallurand Edayanchavadi Villages,Ponneri Taluk,Tiruvallur District GreaterNoida

GreaterNoida Integrated WarehousingPvt. Ltd.(Earlierknownas FreeTrade WarehousingZone Pvt.Ltd.

WarehousingFacility CustomizedWarehouse ColdStorageWarehouse Warehouses OfficeSpace&Amenities Agents,etc.

InlandContainerDepot ContainerFreightStation ContainerStackingArea BondedWarehouse OfficeSpace&Amenities Customs,etc.

AirCargoCentre Stuffing/DestuffingArea BondedWarehouse OfficeSpace&Amenities Agents,etc.

CommonFacility TerminalBuildings Truck,Rail InternalRoads&Railway Sidings CentralAdminFacility PowerTransmission& DistributionNetwork TelecomNetwork

SupportInfrastructure CoolerFacility PowerBackUp WaterStorage& TreatmentPlant SewerageTreatment Plant GreenArea

Teardrop Many Size Options

Rigurak 12' 14' Tall 90" Beams

Inca 15' & 20' Tall 8' and 9' Beams

Unarco T-Bolt 16' Tall 144" Beams

Unarco T-Bolt 21' tall 8' and 9' Beams

Amerack 72" Deep

Speedrack 22' Tall 92" Beams

Konstant 17' Tall 93" Beams

Sturdibilt 13' Tall 9' Beams

Paltier 16' Tall 8' Beams

Amerlock 12' Tall 9' Beams

Sammons 12' Tall 8' & 9'Beams

Speedrack 16' Tall and 15 Tall';100" Beams

Frontier 12 Tall 8' Beams

Sturdibilt in San Antonio 20' Tall 8' and 9' Beams

Teardrop Bulk Storage 24' Tall 8' Beams

Webb 12' Tall 8' Beams

Pennco 21' Tall 8' Beams

Unarco II 15' Tall 7' Beams

Amerack 16' and 18' Tall 5' Deep

Structural 22' Tall 9' and 10'6" beams

Unarco 2 19' 6"Tall 104" Long Beams

Republic 16' ' Tall 8' Beams

Rigurak 14' ' Tall 90" Beams

iv. FollowingtableshowstheRatesofgrowth(FY200304to200809)atfactorcostat 19992000prices(percent)forthedifferentsectorsoftheeconomy.

b) Auto&AutoAncillariesMarket Over34lakhvehiclesarecurrentlyregisteredinBangalore,ofwhichabout70%are2 wheelersand15%arecars.Thecityhasanannualvehiculargrowthrateofover10%, with1,000newvehiclesaddedtothecitysroadseveryday,onanaverage.Growthof Bangaloresvehiclepopulationisdepictedinthetablebelow:

Sr.no. Commodity 1. Auto&AutoAncillaryProducts

Quantity 27,261 56,986 245

Unit Tons Nos. Boxes

Sr.no. Commodity 1. Arekanut,Supari,CocoaandConfectionaries

Palm oil, Sun Flower oil, Coconut oil, Cashew nutoilandotheroil