Kerala - Kochi   

BOT model for cruise terminal

KOCHI: The feasibility report and business plan for the proposed international cruise terminal and public plaza on Willingdon Island has suggested setting up the world-class facilities on the tested Public-Private Partnership (PPP) model under the Build, Operate and Transfer (BOT) structure.

The study, submitted to Cochin Port Trust a fortnight ago, has set a debt-equity ratio of 68:32 for the project, establishing which will cost an estimated Rs. 375 crore.

The report has been prepared by Mir Projects and Consultants Pvt. Ltd, Kochi and TranSystems, Virginia of the USA.

The cruise terminal project is one with a long gestation period, the study said, as it suggested the PPP-BOT route for implementing it.

“Cruise Terminal is a project with a long gestation period and revenue from Terminal Operation, when compared to the investment, may not be attractive. Considering this fact, we propose a mix of commercial activities together with the main business.” The study said that the PPP structure can have a definite end period and the Port Trust could fix the lease period for the land which will be the operating period developer.

Inviting a developer through global tender and setting acceptable standards will be the Port Trust’s job. Once a developer is selected and an agreement signed, a Special Purpose Vehicle can be formed for implementing the project.

The report recommended a joint venture company, with a total of 26 per cent or more stake for the Cochin Port Trust.

The project comprises building a world-class cruise terminal, a ‘Kerala Village’ as a major tourist attraction, a 238-room hotel complex, shopping mall and office complex as well as a parking garage.

Cochin Port Trust has earmarked 6.71 hectares (16.59 acres) for the project of which 4.24 will bring in lease income while the rest of the area will be developed through a Special Purpose Vehicle.

The total construction cost will add up to more than Rs. 285 crore. The study has put the cost of building the cruise berth at Rs. 61.22 crore, cruise terminal building at Rs.40.94 crore, Kerala Village at Rs. 6 crore, shopping mall and office tower at Rs. 79.57 crore and the hotel complex at Rs. 83.53 crore. Walkways, a park and bus circuit will be additional facilities.

Though Cochin Port Trust has set an aggressive deadline — November 2010 — for completion of the project, the implementation is expected to take approximately 30 months between late 2009 and July 2011.

The project will have significant economic impact on Kochi and the cruise terminal projects will generate direct employment to 1,500 people.

Besides, the study has projected Rs. 23 crore in annual crew and passenger spending by 2015.

This can go up to Rs. 58 crore annually by 2025. Bunker purchases and ship services will be major activities that will come along with the implementation of the project. The report also projects that more than 50 per cent of the revenue will accrue from the hotel complex.

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