14 Cost Estimates

14.1 Capital Cost Estimates

14.1.1 General

The capital cost estimates have been prepared for the Phase 1 development of the project.
These are based on the project descriptions and drawings given under the relevant sections of
the present report. The drawings were prepared after carrying out basic engineering of various
components of the project. The quantities have been calculated from the drawings for cost
estimation purpose. The basis of the costing is as follows:

- The cost estimates of civil works have been prepared on the basis of current rates for
various items of work prevailing in the region and also on the past costs for similar works
elsewhere.
- The costs of equipment and machinery are based on budgetary quotations and discussions
held with the manufacturers and also in-house data. The costs include all taxes and duties.
- The price level used for the estimates is as of the third quarter of 2004.
- All costs towards overheads, labour, tools, materials, insurance, financing costs, etc., are
covered in the rates for individual items.
- The costs towards plant and machinery include manufacture, supply, installation and
commissioning of the respective items.
- The exchange rate has been assumed as 1 US $ = Rs. 44.00/-, 1 Euro = Rs. 59.00/-
- Provision towards contingencies, engineering and establishment has been included
separately.

14.1.2 Capital Cost Estimates for Phase 1 Development

An abstract of the capital cost estimates for the Phase 1 development of the project is furnished
below in Table 14.1. The detailed capital cost estimates are presented in Table 14.2.

The estimates given here do not include the following items:

- Hinterland connections
- Road Bridge outside the port boundary
- Crude Oil Handling and associated facilities
- Financing Costs

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 Table 14.1 : Abstract of Capital Cost Estimates

S. No. Item Cost

(Rs. In Million) ($US In Million)
1. PROJECT PRELIMINARIES AND SITE DEVELOPMENT 850 19.3
2. DREDGING AND RECLAMATION 2,480 56.4
3. BREAKWATERS 1,927 43.8
4. BERTHS 1,804 41.0
5. BUILDINGS 180 4.1
6. STACKYARDS 203 4.6
7. ROADS AND RAILWAY 362 8.2
8. EQUIPMENTS 5,589 127.0
9. UTILITIES AND OTHERS 707 16.1
10. PORT CRAFTS AND AIDS TO NAVIGATION 945 21.5
Total 15,046 342.0
Contingencies @ 10% 1,505 34.2
Engineering and Project Management @ 5% 752 17.1
GRAND TOTAL 17,303 393.3

14.2 Operation and Maintenance Costs

14.2.1 General

Operation and maintenance costs have been calculated under various heads, as described in
the subsequent paras. These costs do not include the following items:

- Lease rent to the state government

- Maintenance of Infrastructure outside the port boundary

14.2.2 Repair and Maintenance Costs

The following norms have been used for estimating the annual maintenance and repair costs:

- 5% of Mechanical and Electrical Works

- 1% on Civil Works

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 For dredging, the actual cost based on the maintenance dredging volume estimated from model
studies is taken into account.

14.2.3 Manpower Costs

It is estimated that number of personnel required for the Phase 1 port operations and
maintenance shall as below:

Managerial - 50 Nos.
Supervisors/Labours - 350 Nos.

The average total cost per annum per person has been estimated as Rs. 5,00,000/- for the
managerial staff and Rs. 1,00,000/- for the supervisors/labours.

14.2.4 Operation Costs

The operation costs includes the fuel, water and power costs. These have been considered as
below:

Power - Rs. 4.50 per unit plus Rs. 200 per kVA of demand rate per month
Water Charges - Rs. 25 per kilolitre as indicated by GPL

The operation costs for the equipments run by electrical power have been calculated based on
the maximum throughput and utilisation of the equipment. Further the operation costs of the
following items have been estimated as a percentage of their capital cost, as given below:

Marine Crafts - 10% per annum

Diesel Driven Equipment - 5% per annum
Fire fighting and Pollution Control - 3% per annum

14.2.5 Annual Operation and Maintenance Costs

The summary of the annual operation and maintenance costs of the phase 1 facilities is
presented in Table 14.3 below:

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 Table 14.3: Annual Operation and Maintenance Costs

S. No. Ite m Quantity Rate Annual Costs

(Rs. In Million)
A. REPAIR AND M AINTENANCE COSTS
1. Civil Works Rs. 5,962 million @ 1 % per annum 59.62
2. Mechanical and Electrical Works Rs. 5997 million @ 5 % per annum 299.53
3. Maintenance Dredging 1.0 million @ Rs. 100/- 100.00
Total Repair and Mainte nance Costs 459.15

B. MANPOWER COSTS
1. Managerial 50 No. @ Rs. 500,000/- per annum 25.00
2. Supervisors/ Labours 350 No. @ Rs. 100,000/- per annum 35.00
Total M anpow e r Costs 60.00

C. OPERATION COSTS
1. Electricity
Electricity Consumption 41,000,000 units @ Rs 4.50 per unit 184.50
Fixed Charges on Demand Rate 30 MVA @ Rs. 200/- per kVA per month 72.00
2. Water Charges 375,000 kL per annum @ Rs. 25/- per kL 9.38
3. Marine Crafts Rs. 924 million @ 10 % per annum 92.40
4. Diesel Driven Equipments Rs. 803 million @ 5 % per annum 40.15
5. Firef ighting, Pollution Control & misc. w orks Rs. 237 million @ 3 % per annum 7.11
Total Operation Costs 405.54

D. SUB-TOTAL O&M COSTS 924.69

Administrative Expenses @ 15% 138.70
Contingencies, Engineering and Project Management @ 15% 138.70

E. TOTAL O&M COSTS 1202.10

14.3 Block Cost Estimates for Phased Master Plan Development

14.3.1 Phase wise Facilities Provided

Drawings 0903/DPR/315 to 0903/DPR/322 present the development of marine port facilities at

every five years intervals from the Phase 1 development until Master Plan Horizon. These
marine facilities would be required, based on the estimated traffic to be handled. The
corresponding matching onshore facilities will be provided as discussed in the previous sections.

14.3.2 Block Cost Estimates

Based on the estimated port facilities required over the time horizon of the master plan, the
Block Capital Cost Estimates as well as the O&M cost estimates have been worked out as
presented in Table 14.4 below:

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 Table 14.4: Block Cost Estimates Over Master Plan Horizon (Incremental)
Capital Cost
S. No. ITEM
(Rs. In Million)
2008 2013 2018 2023 2028 2033 2037

1. PROJECT PRELIMINARIES AND AREA DEVELOPMENT 850 0 0 0 0 0 0

2. DREDGING AND RECLAMATION 2,480 371 960 32 555 12 792

3. BREAKWATERS 1,927 0 0 0 5,200 0 1,300

4. BERTHS 1,804 1,130 870 260 870 260 610

5. BUILDINGS 180 49 64 42 57 42 85

6. STACKYARDS 203 0 51 35 40 8 48

7. ROADS AND RAILWAY 362 20 90 50 90 76 92

8. EQUIPMENTS 5,589 1,634 1,636 715 2,460 393 2,527

9. UTILITIES AND OTHERS 707 76 126 41 150 21 156

10. PORT CRAFTS AND AIDS TO NAVIGATION 945 5 0 774 20 0 0

Total Cost 15,046 3,284 3,797 1,948 9,442 811 5,610

Contingencies @ 10% 1,505 328 380 195 944 81 561

Engineering and Project Management @ 5% 752 164 190 97 472 41 280

GRAND TOTAL 17,303 3,777 4,366 2,240 10,858 933 6,451

Increm ental O&M Costs (Rs. In Million) 1,202 248 263 257 442 59 400

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