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D a d r i N o i d a G h a z i a b a d I n v e s t m e n t R e g I o n

Techno-Economic Feasibility Study

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DELHI-MUMBAI INDUSTRIAL CORRIDOR DEVELOPMENT CORPORATION

LIMITED In association with

Integrated Multi Modal Logistic Hub at Greater Noida near Dadri

1 PROJECT BACKGROUND

1.1 The Government of India is developing the Delhi-Mumbai Industrial Corridor (DMIC) as a global manufacturing and investment corridor along the planned Dedicated Freight Corridor (DFC). For this purpose, a Special Purpose Vehicle (SPV) named the Delhi-Mumbai Industrial Corridor Development Corporation (DMICDC) has been incorporated for the development of various programme components of the DMIC project.

1.2 The development of the Delhi Mumbai Industrial Corridor (DMIC) is strongly linked to the Dedicated Freight Corridor (DFC) that has been conceived as a high capacity, high speed, freight only rail line by the Ministry of Railways under the Eleventh Five Year Plan of India (2007–2012). The DFC corridor covers about 2762 route km along two routes - the Eastern Dedicated Freight Corridor (EDFC) from Ludhiana to Dankuni and the Western Dedicated Freight Corridor (WDFC) from Jawaharlal Nehru Port, in Navi Mumbai to Dadri in the State of Uttar Pradesh ( Figure 1:Dedicated Freight Corridor Alignment Figure 1). This proposed DFC alignment is envisaged to be supplemented by significant infrastructure facilities proposed as part of DMIC which together will enhance the economic environment of the DMIC region and will support DFC in achieving its targeted potential of enhancing the rail based freight transport in the country.

Figure 1: Dedicated Freight Corridor Alignment



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1.3 Within the DMIC corridor seven investment regions (nodes) have been identified in the state of Uttar Pradesh, Haryana, Madhya Pradesh, Rajasthan, Gujarat and Maharashtra along the Dedicated Freight Corridor (DFC) (Figure 2). The investment regions (IRs) under DMIC are proposed to be self-sustained industrial townships with world-class infrastructure, road and rail connectivity for freight movement to and from ports and logistics hubs, served by domestic/ international air connectivity, reliable power and other quality social infrastructure, and provide a globally competitive environment conducive for setting up businesses.

Figure 2: DMICDC Investment Region Nodes

1.4 Of the various Investment Regions (IRs) identified under DMIC project one of the key investment regions is that of the Dadri-Noida-Ghaziabad Investment Region (DNGIR) in Uttar Pradesh (UP) sub-region of DMIC owing to its proximity to the National Capital of Delhi. This investment region has been conceived as a model industrial corridor of international standards, with emphasis on expanding the manufacturing and services base and of developing as a ‘Global Manufacturing and Trading Hub’. The region is expected to provide a globally competitive environment conducive for setting up businesses with as self-sustaining industrial townships and world-class infrastructure, connected by road and rail to ports and logistics hubs, equipped with reliable power supply and social infrastructure.



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1.5 A Multimodal Logistics Hub (MMLH) has been proposed at Dadri within the DNGIR in congruence with DMIC’s objective of creating strong economic base with a globally competitive environment and state-of-the-art infrastructure facilities. This MMLH has been selected as one of the Early Bird Project (EBP) in the preparation of Development Plan for Dadri-Noida- Ghaziabad Investment Region (DNGIR). A Techno - Economic Feasibility for the project has been undertaken.

1.6 The proposed MMLH site is located in is located in the Dadri block of Gautambuddh Nagar district of Uttar Pradesh. This site is strategically located between NH-91 and the Delhi-Howrah line in close proximity to the point of congruence of the Western and Eastern DFC and also the proposed freight corridor of Eastern Peripheral Expressway (EPE) (). EPE is a proposed expressway which will bypass the national capital; Delhi on the eastern side and would provide signal-free connectivity between Ghaziabad and Faridabad, and Gautam Budh Nagar (Greater Noida) and Palwal

1.7 The MMLH facility will support DFC towards achieving its targeted potential by providing an integrated logistic facility for efficient storage/transitioning of goods to/from the UP sub-region of NCR. It also targets to Improve efficiency of operations of existing industries in the region and the attractiveness of the region as an investment destination for various categories of industries and also warehousing and logistics operators.



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Figure 3: MMLH Site Location

1.8 The proposed site for the MMLH comprises of 438.9 Ha (1,084.5 acres). The land for this facility is in process of acquisition. The proposed MMLH facility is planned for the estimated traffic for next 30 years (till FY 2043). Out of the total area of 438.9 Ha the area required to handle the estimated traffic is calculated as 293.8 Ha (725.9 acres). An additional 17.2 Ha (39.8 acres) is required for the Railway Siding including a Rail over Bridge (ROB) and an area of 145.1 ha (358.56 acres) is earmarked for future expansion. The State has assured to provide land required for the project and have requested DMICDC to move ahead with the project. For the project, the concept master plan and the financial assessment is based on the proposed facility for 293.8 Ha.

1.9 The proposed site is not directly connected to the Western DFC line and hence a spur line will have to be planned that connects the site to the proposed Western DFC yard. The total length of the spur as taken from the DFC main line to the MMLH site is 4.306 km which comprises of a Rail-over-bridge going above the Delhi-Howrah line.



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2 PROJECT OBJECTIVES

2.1 The development of MMLH at Dadri has been planned to serve the freight movement to and from the industries in the UP sub-region of NCR alongside the industrial region in DNGIR. The objectives of developing this facility are:

i. To improve efficiency of operations of existing industries in the region as well as to improve the attractiveness of the region as an investment destination for various categories of industries and also warehousing and logistics operators;

ii. To tap the potential traffic along both the Western and the Eastern Dedicated Freight corridors that are bound to revolutionise rail-based freight movement with hi-end operational features of faster dedicated and high-capacity freight trains. The MMLH targets to serve as a world-class nodal facility that provides for efficient storage/transitioning of goods to/from DFC, thereby catering to the escalated freight traffic envisaged to be generated by DFC;

iii. To offer a one-stop destination to freight companies and customers. The facility will go beyond just standard container handling activities and will provide various value added services.

3 PROJECT COMPONENTS

3.1 The project encompasses development of an inland logistics facility that caters to the logistics streams to/from the Western DFC and the surrounding road network. The facility has potential to cater to Eastern DFC as well for container traffic. As the current forecasts for container traffic on the Eastern DFC are low it has not been considered in the analysis. The key components of the project include the following:

a) Trunk level infrastructure external to the site, which includes Railways siding that, shall connect the project site to the western DFC yard including a Rail over Bridge (ROB) on this external rail link, external connectivity roads, and a Power sub-station within the facility.

b) Railway tracks within the site to serve as the loading/unloading terminal stations;c) Container stacking area equipped with tractor trailers/gantries/forklifts etc;d) Container freight stations hosting stuffing/de-stuffing/packaging and inspection facilitiese) Container and Equipment maintenance areas;f) Bonded and General warehouses;g) Dedicated space for value added service provision that could encompass

packaging/labelling/assembling of semi-finished goods/products within the facility prior to transportation



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3.2 The MMLH will provide facilities for large, medium and small enterprises which will be benefitted from the proximity to the logistics hub. The hub would also house a truck terminal with support infrastructure for trucking industry like dedicated parking bays, lodging facilities, rest rooms, workshops etc. The site will have provision for commercial office/retail space to cater to businesses like those of freight forwarders, operators, third-party logistics (3PL) companies, fourth-party logistics (4PL) companies, etc. Other supplementary facilities at the site comprise of staff housing facilities, administration building, utility areas and greens.

3.3 For this project, the concept master plan is based on the proposed facility for 293.8 Ha. The master planning and for the remaining area will be done in future based on the envisaged requirement and the prevailing market dynamics. It is seen that in such strategic projects provision of land for future expansion is critical to render the facility expandable for future demand. Such practice has been observed in case of development of airports as well as railway stations.

3.4 The area and land use under various activities is summarised in Table 1 & Figure 4

Table 1: Land Use Summary for MMLH 1

Land use Area (Ha) Percentage ShareTransportation Roads 48.8 16.6

LogisticsEXIM Zone 33.0 11.2

24.8 8.4Domestic ZoneContainer Yard 114.0 38.8Industrial Facilities – Domestic zone 18.9 6.4Support Facilities – Domestic Zone 18.9 6.4Maintenance Facilities 11.9 4.0Utilities 7.1 2.4Greens 16.4 5.6Total 293.8 100.0Area reserved for Future Expansion 145.1 100.0

1 The table presents land use break up for the site of 293.8 Ha. In addition to 293.8 Ha additional land of 17.2Ha has been identified for the Railway Spur from Western DFC.



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DELHI-MUMBAI INDUSTRIAL CORRIDOR DEVELOPMENT CORPORATION L IMITED

In association with

Figure 4: Concept Master Plan for MMLH



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4 TRAFFIC ESTIMATED TO BE HANDLED AT MMLH

4.1 The traffic demand estimates for the project are based on the commodities and freight charact -eristics of the industrial catchment immediately outside the facility. The demand has been estimated separately under four categories :

a) DFC Rail Based Container Traffic from Project Catchment (other than DNGIR);b) Additional Shift of Container traffic from Road to Rail due to DFC;c) Additional Road Based Demand due to Eastern Peripheral Expressway;d) Freight Traffic due to Industries in DNGIR.

4.2 Traffic likely to be generated in equivalent Twenty-foot equivalent units (TEUs) from the above potential streams is summarized in the Table 2. The proposed MMLH is expected to handle 0.32 million TEUs in 2016-17 which will be in the opening year of the facility and shall increase in subsequent years as per the details given below.

Table 2: Summary of Traffic Estimate for MMLH Dadri

S. No Traffic Streams Million TEUs per year2016-17 2021-22 2026-27 2031-32

1 DFC Rail Based Container Traffic from Project Catchment 0.14 0.23 0.44 0.47

2 Additional Shift of Container traffic due to DFC 0.01 0.02 0.04 0.05

3 Additional Demand due to EPE 0.03 0.04 0.05 0.064 Traffic due to DNGIR4a Rail based Traffic 0.097 0.160 0.233 0.3304b Road based Traffic 0.042 0.070 0.102 0.140 Sub-Total 0.14 0.23 0.34 0.47

Total 0.32 0.52 0.87 1.05

5 MAJOR COMMODITIES



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5.1 The facility has been developed to primarily cater to containerized traffic on the DFC that comprises of automotive, manufacturing, textiles, retail products, consumer goods, agricultural products and commodities. In addition to these the facility would cater to the road based traffic coming from the Eastern Peripheral Expressway comprising of commodities like heavy machinery / auto parts, industrial material, plastics and polymers, textile fabric, food grains / rice etc.

6 FACILITY PLANNING FOR MMLH

6.1 Area and Infrastructure assessment for the various facilities on the MMLH has been carried out considering a set of parameters. These were based upon real time scenarios by visiting various similar facilities, performing literature review and undertaking stakeholder consultations.

Table 3: Area and Infrastructure Assessment for MMLH at Dadri for Key facilities

Summary 2016-17 2021-22 2026-27 2031-32

Total Traffic ( TEUs/Day) 887 1415 2378 2877Total number of trains (single stack)2 5 8 13 16Total number of tracks 4 5 8 9Total Container Yard Area (Acres) 8.65 13.92 23.81 28.73Total Empty Yard Area (Acres) 2.75 4.42 7.56 9.12Total CFS Area (Acres) 9.11 14.59 24.72 29.87Total Warehouse Area (Acres) 11.76 18.87 32.13 38.79Total Truck Parking Area (Acres) 4.99 7.96 13.52 16.31Total AGS/Access Lanes 6 6 12 14Total No. of RTG's 4 6 8 8

2 Single stack train capacity is 90 TEUs against 180 TEUs for double stack. Depending on the DFC scheme if the facility receives double stack trains, the number of trains can reduce. Technically the facility has been designed for both types of trains.



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7 PROJECT COSTS

7.1 Overall cost for the project has been assessed to be around 3540.8 Crore INR, of which an estimated 783.5 Crore INR is to be borne by the JVC under the implementation structure described in the subsequent section. This cost would include land costs and other external infrastructures like railway line from DFC yard, ROB, power and road infrastructure. Remaining 2757.3 Crore INR will be funded by private sector.

Table 4: Project Costs

Particulars

2013-14 to 2016-17

2017-18 to 2019-20

2022-23 to 2024-25

2027-28 to 2029-30

TotalPhase 1 Phase 2 Phase 3 Phase 4Land costs 644.8 5.8 5.3 6.4 662.3Railway Infrastructure 187.5 42.4 113.0 64.7 407.7Water Supply 6.7 3.2 0.6 1.1 11.7Sewerage systems 3.8 2.7 0.6 1.8 8.9Power 41.1 5.5 2.8 2.9 52.3Roads and Parking 236.8 45.7 60.7 74.2 417.4Green belt 10.7 2.7 0.0 0.0 13.3Building costs 459.9 487.4 264.5 218.5 1,430.3Equipment Costs 146.3 131.8 134.1 124.7 536.9 1,737.5 727.3 581.7 494.4 3,540.9

8 PROJECT IMPLEMENTATION STRUCTURE

8.1 The project is proposed for execution in two stages:

i. Stage 1: The Government of Uttar Pradesh and the DMIC Trust will form a ‘Joint Venture Company’ (JVC formed as an SPV for the project), to provide land and the initial trunk infrastructure.

ii. Stage 2: Engagement of Private developers by the ‘JVC’ to execute the project on PPP basis



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Figure 5: Project Implementation structure



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8.2 Stage 1:

8.2.1 Government of Uttar Pradesh and DMIC Trust will form a ‘JVC’ (SPV formed for the project), to provide for land and the initial trunk infrastructure.

8.2.2 It is envisaged that the shareholding of both the equity holders of the JVC would be 50% each. The JVC will set up initial trunk infrastructure on the site so as to make the site attractive for private player participation, as the private participant will then need to incur only the capital cost required for the proposed project facilities. This in-turn will improve the financial viability of the project for the private participant, and enhances the marketability of the project as government body is better suited to coordinate with other departments.

8.2.3 Key action task required at this stage is the setting up of trunk level infrastructure. It is proposed that the Trunk Level Infrastructure be executed as a ‘Design-Build’ (DB) contract.

8.2.4 The role of JVC is critical for the successful execution of the project as it helps to bring in co-ordination with various government agencies.

8.3 Stage 2:

8.3.1 The JVC will invite a master developer which may be a single entity or a consortium of companies on a PPP mode through a transparent bidding process. A Transaction Advisor shall be appointed by the JVC to execute this process. The PPP concessionaire/master developer will be responsible to build internal infrastructure, logistics facility, and commercial area.

8.3.2 The master developer will either execute the project itself, or will further invite multiple concessionaires to execute the project. In case the JVC is unable to find single developer due to prevailing market conditions, the JVC can invite multiple private concessionaires to execute the project components with relevant, complementary and comprehensive capabilities.

8.3.3 The stage is proposed to be executed as a ‘Design, Build, Finance, Operate, and Transfer (DBFOT)’ contract. The private concessionaires will be responsible for designing, building, and financing the project, operating the project for a specified duration, and transferring the project back to ‘JVC’ after the specified period of concession, i.e. 30 years in this case. The PPP concessionaires will develop the mandatory requirements of the project based on defined technical specifications.



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8.3.4 It is proposed that the PPP concessionaries be selected on a hybrid model, wherein the PPP Concessionaire has to bid for the percentage revenue share, and will have to pay a pre-ascertained guaranteed lease rental or revenue share, whichever is higher. In addition, the PPP Concessionaire shall give three times the minimum gauranteed annual rental as an upfront premium. The PPP Concessionaire who bids for the maximum revenue share will be selected. The method enhances the marketability of the project for private participation, and provide avenues to capture any unprecedented upside. However, reasonable checks will be implemented to ensure that there is no under reporting of revenues.

9 ECONOMIC BENEFITS

9.1 The project is likely to generate series of unquantified economic benefits as direct benefits and through a multiplier effect.

These benefits are summarized as under:a) Such a large scale worker-oriented facility will generate significant employment for various

operations. This in turn will have a multiplier effect on the economy, and will also generate significant cash flows for the government in terms of direct and indirect taxes.

b) The facility shall provide adequate facility for consolidation of goods, and end finishing of goods within the MMLH campus,small and medium enterprises, offices and staff housing, trucker amenities within the campus thereby reducing the road traffic through integration of services and hence contributing to the traffic and pollution reduction.

c) By supplementing the industries in the region through the provision of a logistics facility nearby, the facility will positively impact the growth of these industries that shall have a multiplier effect on the economy of the region. In addition, it will also have a positive impact on the industrial output.

d) By supplementing the DFC corridor with adequate nodal infrastructure, the MMLH shall contribute to one of DFC’s objective of acheiving a shift in some of the road based freight towards rail thereby improving the share of rail based freight and the overall logistics improvement targeted by the DFC.



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10 STATUS OF PROJECT

10.1 The Techno Economic Feasibility Study for the project has been carried out by M/s Halcrow Consortium (comprising of Halcrow Group Ltd., Halcrow Consulting India Pvt. Ltd., Synovate India Pvt. Ltd. and Knight Frank India Pvt. Ltd.).

10.2 The State has assured to provide land required for the project and have requested DMICDC to move ahead with the project.

10.3 The project and its components will need approvals from Dedicated Freight Corridor Corporation of India Ltd., Indian Railways, Environmental agencies and Greater Noida Industrial Development Authority.

10.4 The draft of the Shareholders Agreement (SHA) has been sent to State Government.

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