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FEASIBILITY REPORT FOR CONSTRUCTION OF CAPTIVE BARGE JETTY AT KANDLA AUGUST 2010 INDIAN FARMERS FERTILISER COOPERATIVE LIMITED KANDLA
FEASIBILITY
REPORT
FOR
CONSTRUCTION OF
CAPTIVE BARGE JETTY
AT
KANDLA
AUGUST 2010
INDIAN FARMERS FERTILISER COOPERATIVE LIMITED KANDLA
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CONTENTS
Chapter No.
Description Page Numbers
1. Project at a Glance 3
2. Executive Summary 5
3. About IFFCO 11
4. Kandla Port Infrastructure and Cargo Handling 22
5. Production at Plant and Imports by IFFCO 25
6. Project Scope 26
7. Project Site Infrastructure and Site Advantages 31
8. Environmental Concerns 39
9. Project Management 45
10. Organisation Hierarchy 48
11. Capital Cost Estimates 50
12. Financial Structure 51
13. Financial Analysis 52
14. Draft MOU with Kandla Port Trust 56
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CHAPTER - 1
PROJECT AT A GLANCE
Name of the Project Construction of Captive Barge Jetty of IFFCO at Kandla
Length of Barge Jetty 120 meters
Width of Barge Jetty 20 meters
Berthing Facility for Barges 02 barges at a time
Capacity per Barge 2,000 MT to 5,000 MT
Annual Capacity of Barge Jetty 2.0 Million MT
BARGE JETTY DETAILS
Expected Annual Handling of IFFCO cargo
1.5 Million MT
Expected Annual Handling of cargo for other parties
0.5 Million MT
Design Load for Barge Jetty 5 MT / sq. meter.
Available Draft for Barges 4.0 meters
PROJECT DETAILS
Capital Cost Rs. 2737.60 Lakhs
Source of Funds Debt : Equity in 3 : 1 ratio
Employment Nil, Existing manpower will be utilised.
Project Time Schedule 24 Months
Expected Commissioning date June, 2012
IRR, Pre Tax 18.63 %
IRR, Post Tax 15.68 %
Payback Period 7.5 years
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CHAPTER - 2
EXECUTIVE SUMMARY 2.1 Liquid cargo of IFFCO is handled at its Captive liquid cargo jetty. The solid fertiliser raw
materials and products like Muriate of Potash (MOP), Urea, Di Ammonium Phosphate (DAP), Mono Ammonium phosphate (MAP), etc., are unloaded at Kandla port’s berths and transported to the storage areas in the plant by trucks / dumpers.
2.2 The demand for fertilisers has grown and IFFCO also imports large quantity of fertiliser products at Kandla port, which is increasing.
2.3 Growing industrialisation in Kandla area has added to cargo traffic at Kandla port. Despite novel initiatives by Kandla Port Trust to manage the heavy port traffic, like priority berthing for higher discharge rate, etc., the port is becoming busy and therefore the pre-berthing detention time for cargo ships is likely to increase.
2.4 IFFCO has proposed to construct captive barge jetty at Kandla port for unloading its raw materials and imported finished products. The entire facility shall be built, operated and maintained by IFFCO.
2.5 The land allotted by Kandla Port Trust of 36,000 sq. meters shall be reclaimed and developed for construction of the barge jetty. Kandla Port Trust shall also provide necessary guidance, approvals and other assistance required by IFFCO for stable and smooth construction and operation of the barge jetty.
2.6 The captive barge jetty shall be located in the vacant space between IFFCO’s captive liquid cargo jetty (OJ-V) and IOC liquid cargo jetty (OJ-VI), adjacent to the existing IFFCO factory boundary.
2.7 The barge jetty shall be used to unload cargo received in large vessels anchored at mid sea, using barges. The barges shall then be berthed and unloaded at the proposed barge jetty.
2.8 The captive barge jetty shall have grab cranes / excavators for unloading cargo from the barges. This material shall be transported by trucks to storage areas in the plant through a short distance. Imported fertilisers shall be unloaded and transported to storage godowns by trucks where facility for weighing and bagging shall be provided. Bagged product shall be directly loaded into railway wagons. Storage godowns, as per requirement will be constructed along side the existing railway line within IFFCO premises.
2.9 At present transportation of IFFCO’s cargo from Kandla port cargo berths to storage area in the plant, a distance of about 12 kms, generates traffic of thousands of trucks which ply to and fro during unloading, causing vehicular congestion at Kandla port area.
2.10 Imported fertiliser raw material and products are in the form of fine crystalline solid or granules. During transportation by trucks this material gets spilled along the road side causing environmental difficulties and material losses.
2.11 Construction of captive barge jetty will drastically reduce the distance for transporting the solid cargo in trucks to plant storage area.
2.12 Limitations of Existing System: The various limitations and drawbacks in the present system is listed below, which shall get
eliminated after the proposed captive barge jetty is put into operation :
1. At present, Panamax vessels with full cargo load cannot berth at Kandla port cargo jetties due to draft limitations. In the current scenario of international trade, availability and freight cost of large carriers give significant economic benefit. This results in lower landed cost of raw materials and fertiliser products.
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2. Although the average pre berthing detention time at Kandla port is low, during peak period due to very heavy traffic of imports and exports at Kandla, vessels are required to wait for berth ranging from 3 to 10 days which severely hampers plant operations.
3. Due to delay in berthing of vessels carrying imported raw materials for IFFCO, at times the plant has to be kept under shutdown until receipts of raw material from the shipment has commenced. With anticipated increase in cargo traffic at Kandla port, the occasions of enforced plant shutdowns are likely to increase affecting the production and availability of indigenous fertilisers to the farmers of our Country.
4. The cost of raw material increases due to additional expenditure on secondary transportation from port premises to the plant. Material losses occur due to spillage during transportation of material in trucks / dumpers, which further increases the unit cost of raw material.
5. The spillage and wind losses during transportation and storage at port premises cause environment pollution, which can be eliminated by barge operations adjacent to the existing factory premises.
2.13 Advantages of Barge Jetty to IFFCO and other users : 1. The entire solid cargo handling of IFFCO will be diverted from the solid cargo area to the
liquid cargo handling area at Kandla port.
2. The construction of barge jetty shall enable IFFCO to arrange for cargo shipment in larger vessels without any draft limitation.
3. IFFCO will be able to carry out unloading of raw materials and imported fertiliser products directly without any time delay and with minimum losses. The timely receipt of raw materials shall enable IFFCO to maintain its production plans conveyed to the Government of India for meeting the fertiliser requirements of our Country.
4. Road movement for transportation of IFFCO cargo from Kandla port premises to the storage areas in the plant will be eliminated. This shall improve the local environment due to reduced traffic emissions and no material spillage. Internal transportation from barge jetty to storage area at IFFCO plant will comprise very shot distance within the factory premises where environmental pollution control systems are provided.
5. Space availability between the two existing jetties for construction of captive barge jetty of IFFCO is adequate and complies with the statutory requirement for non-hazardous and non explosive materials, which is most beneficial to IFFCO due to close proximity to existing factory premises.
6. The commissioning and operating experience of IFFCO’s captive liquid cargo jetty since April 1998 has improved operational flexibility to IFFCO, KPT and other users for receipt and unloading of liquid cargo. Similar benefits and streamlining of operations pertaining to solid cargo is anticipated after construction and commissioning of proposed barge jetty.
2.14 Advantages of Barge Jetty to Kandla Port Trust 1. Construction of the proposed barge jetty of IFFCO will enable Kandla port to accommodate
additional cargo of other agencies at its existing cargo jetties and will help in decongestion as well as increasing the capacity and productivity of Kandla port.
2. The number of days occupied by IFFCO vessels is around 120 days for cargo of 10.0 Lakh metric tonnes, which is significant and shall contribute towards proportional increase in the cargo handling capacity of Kandla port.
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3. The construction of barge jetty shall enable IFFCO to increase its imports of fertiliser raw materials and products to 1.5 million MT per annum. Besides additional 0.5 million MT of cargo of other agencies shall also be handled at the barge jetty. The cargo handling capacity of Kandla port will increase to this extent.
4. Construction of proposed barge jetty of IFFCO shall enable receipt and unloading of large size cargo vessels at Kandla, which will enable Kandla port to compete with nearby ports for receiving large size vessels without any draft limitations.
5. The present mode of dual port operations for lightening of large vessels due to draft restrictions at Kandla port will not be required. Large vessels can unload their entire cargo at Kandla port.
6. Area proposed for construction of barge jetty is presently unutilised and can be utilised to generate revenue for Kandla Port Trust.
7. Environmental performance of the Port will improve due to reduced road traffic emissions and material spillage in the port and neighbouring areas.
2.16 Exclusive Utility of Captive Barge Jetty to IFFCO : The location of the barge jetty is strategic to IFFCO for unloading its raw materials and
fertiliser product imports due to the following :
1. The available water front in the creek is adjacent to existing IFFCO plant and maximum benefits can be realised by IFFCO due to minimum distance for transporting materials and availability of railway siding at close distance for bagging and direct loading of imported fertiliser into railway wagons received and unloaded at the barge jetty.
2. The volume of solid materials imported by IFFCO is significant and maximum utilisation of the barge jetty will be possible by IFFCO, with maximum benefit by way of lower cost of raw materials and minimum material wastage.
3. For operation of barge jetty by any other party, the cargo will need to be unloaded at the barge jetty and then transported through a long distance along the periphery of IFFCO’s premises to reach the main highway or storage area. This distance shall be more or less similar, to the case where cargo is unloaded at the existing Kandla port cargo jetty and more inconvenient to other parties.
4. Other parties shall have to carry out dual operation of :
a) Unloading the cargo from barges to a suitable location by mechanical means.
b) Transport the cargo from intermediate storage area to their premises or storage area by trucks / dumpers.
5. Availability of vacant land in the immediate neighbourhood for intermediate storage facility is poor. Hence other parties will not get significant benefits by construction of barge jetty at the proposed location.
6. IFFCO shall increase the utility of the captive barge jetty by creating fast and convenient transportation of cargo for other small to medium users.
2.17 Limitations and risk factors : 1. Cost of barge operations and competitiveness of bidders is uncertain.
2. Since, many of the Panamax vessels are gearless, readiness of stevedoring and handling agents to provide services for unloading infrastructure from gearless vessels at mid stream
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is uncertain. This will be an additional cost to be considered for economic feasibility of mid stream barge unloading operations.
3. The need to receive assurance for barge unloading at a rate of 10,000 MTPD of material at economical rates is uncertain.
4. Future plans of Kandla port to create infrastructure for direct berthing of Panamax vessels on cargo jetties shall affect the economics of the barge jetty operations.
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CHAPTER - 3
ABOUT IFFCO
3.1 Indian Farmers Fertiliser Cooperative Limited (IFFCO) was incorporated in 1967. It is registered as a Multi-state Cooperative Society having its Head Office in New Delhi, India. IFFCO was set up with an objective of manufacturing and selling chemical fertilizers to its member farmers through cooperative societies. Over time IFFCO has become the leading fertiliser producer in India. It has established ammonia-urea and DAP/NPK plants to satisfy the requirements of its member farmers that today number around 50 million, represented by about 40,000 cooperative societies and 158 Farmer Service Centres spread across the country, as on 31st March, 2010.
IFFCO obsessively nurtures its relations with farmers and undertakes a large number of agricultural extension activities for their benefit every year. IFFCO is currently the leading player in India's fertiliser industry and is making substantial contribution to the efforts of Indian Government to increase food grain production in our Country.
3.2 MISSION
IFFCO's mission is "to enable Indian farmers to prosper through timely supply of reliable, high quality agricultural inputs and services in an environmentally sustainable manner and to undertake other activities to improve their welfare."
3.3 COMMITMENT
IFFCO’s thirst for ever improving the services to farmers and member co-operatives is insatiable, commitment to quality is insurmountable and harnessing of mother earths' bounty to drive hunger away from India in an ecologically sustainable manner is its prime mission.
All that IFFCO cherishes in exchange is an everlasting smile on the face of Indian farmer who forms the moving spirit behind this mission.
3.4 MANUFACTURING UNITS & CAPACITY
IFFCO commissioned an ammonia - urea complex at Kalol and the NPK/DAP plant at Kandla both in the state of Gujarat in 1975. Another ammonia - urea complex was set up at Phulpur in the state of Uttar Pradesh in 1981. The ammonia - urea unit at Aonla was commissioned in 1988. In 1993, IFFCO had drawn up a major expansion programme of all the four plants under overall aegis of IFFCO VISION 2000 . The expansion projects at Aonla, Kalol, Phulpur and Kandla have been completed.
As part of the new vision, IFFCO has acquired fertiliser unit at Paradeep in Orissa in September 2005. As a result of these expansion projects and acquisition, IFFCO's installed annual capacity is 4.24 million tonnes of Urea and 4.34 million tones of NPK/DAP, amounting to a total installed annual capacity of 8.58 million tonnes of fertiliser products. This quantity in equivalent nutrient content is 2.63 million tonnes of Nitrogen and 1.71 million tonnes of P2O5 nutrients.
The annual production capacity of individual plants are as per table below :
IFFCO, Kalol 0.54 million tonne Urea
IFFCO, Kandla 2.42 million tonne bulk DAP/NPK equivalent to 0.91 million tonnes of P2O5 nutrient
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IFFCO, Phulpur 1.70 million tonne Urea
IFFCO, Aonla 2.00 million tonne Urea
IFFCO, Paradeep 1.92 million tonne bulk DAP/NPK equivalent to 0.80 million tonne P2O5,
3.5 JOINT VENTURES IN INDIA
3.5.1 INDIAN POTASH LIMITED
IFFCO has made strategic investments in several joint ventures in India like Indian Potash Ltd (IPL). IPL is the Indian canalising agency for domestic potash requirements. It is engaged in the business of imports and marketing of potash and other fertilisers in India. IFFCO holds 34% equity in IPL.
3.5.2 IFFCO TOKIO GENERAL INSURANCE CO. LTD.
With the opening up of the Insurance Sector for private investment, IFFCO decided to diversify into General Insurance Business. IFFCO-Tokio General Insurance Ltd (ITGI) is a foray into general insurance sector set up in collaboration with Tokio Marine & Fire Insurance Company Ltd, a Japanese insurance major. IFFCO and its associates hold 72.64% equity in the company.
3.5.3 RURAL INSURANCE SCHEMES OF ITGI
ITGI has been successful in penetrating the rural market, State Cooperative Banks, Cotton Cooperatives, Dairy Cooperatives and Sugar Cooperatives are selling ITGI products. Among many others ITGI has launched “Barish Bima Yojna,” “Mausam Bima Yojna,” for providing insurance facility to the farmers of the country who are dependant on the rains for raising crops and the “Mahila Suraksha Bima Yojna” caters to the insurance requirements of the farmers. “Kisan Suvidha” policy provides protection to the farmers’ household goods, farm stocks, personal accident and tractors. .
IFFCO has, through ITGI a unique insurance policy against accidents for farmers called “Sankat Haran Bima Yojna” linked with the purchase of fertiliser bag from IFFCO cooperative societies / Farmer Service Center and sponsored by IFFCO. The buyer is automatically covered against accident up to an amount of Rs. 4000/- for one year. Maximum liability is limited to Rs. 1 lakh irrespective of the number of bags purchased. IFFCO pays a premium of Re 1/- per bag to this end. Cash receipt from the purchase of fertiliser is evidence of insurance cover of the farmer.
3.5.4 NATIONAL COMMODITY & DERIVATIVE EXCHANGE
To take the benefit of emerging concepts like agricultural commodity trading, IFFCO has taken 12% equity in National Commodity and Derivative Exchange Limited (NCDEX). NCDEX is an on-line national level commodity exchange providing a platform for futures trading in commodities. It offers its participants to trade in a wide spectrum of commodity derivatives and is currently facilitates trading of 41 agricultural commodities, 2 bullion gold & silver, 6 metals 2 energy and 3 plastic commodities. NCDEX has accredited 660 warehouses for storage and delivery of commodities traded on its platform. By trading through NCDEX farmers can receive best quality fertiliser inputs at economical prices, realize higher prices for their produce by price risk hedging which heralds a new era in Indian agriculture.
3.5.5 NATIONAL COLLATERAL MANAGEMENT SERVICES LIMITED
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NCMSL was incorporated by IFFCO along with 7 other institutions to provide services in both the Agricultural sector and the Industrial sector. IFFCO holds 13.56% stake in the company and its other partners in this venture are various banks and federations. On the Agricultural side NCMSL provides Procurement, Storage and Preservation, Quality Testing and Certification, Collateral Management and Information Services. It accredits warehouses which meet the parameters for scientific storage. Farmers can deposit their produce and seeds in such warehouses and be assured of their safekeeping. Additionally farmers will be able to get higher credit from banks at a lower interest rate based on NCMSL’s certification regarding the quality of the product. In the Industrial segment NCMSL offers Risk Management Solutions, Field Warehousing Facility and Receivables Management Services.
3.5.6 IFFCO CHATTISGARH POWER LIMITED
IFFCO has diversified into power sector by incorporating a joint venture company with Chattisgarh State Electricity Board (CSEB) to form IFFCO Chhattisgarh Power Limited (ICPL). IFFCO will hold 74% equity while rest is subscribed by CSEB. ICPL will set up a pit head coal based Thermal Power Project of 1320 MW capacity in Surguja district of Chattisgarh. The power plant will have its captive coal mine at Tara block from where coal would be brought to the plant through a conveyor. The power plant would employ modern technology to ensure least water consumption and zero pollution. The project is scheduled for commissioning by 2009-2010 and will achieve full capacity by 2011-2012.
3.5.7 IFFCO KISAN SANCHAR LIMITED
IFFCO has launched IKSL in April, 2008 with the objective of using Information Communication Technology (ICT) to empower farmers in rural India and to strengthen the cooperative network in the Country. IKSL has identified the needs of telecom & communication products and services which would add value to the life of farmers and shall retail these through the cooperative societies. IKSL has entered into agreement with Airtel for distribution of mobile services in rural areas. IFFCO holds 72.99% stake in the company.
3.5.8 IFFCO KISAN SPECIAL ECONOMIC ZONE
IFFCO has embarked upon to set up a Multi product “IFFCO Kisan SEZ” at Nellore in Andhra Pradesh with primary focus on food processing and agri based industries. The SEZ has been approved by the Ministry of Commerce and Industry in Jan 2008. This venture will boost industrialisation in the area benefiting local population and help farmers in terms of business opportunities. Total project cost is estimated at Rs. 2400 crores.
3.6 JOINT VENTURES ABROAD
3.6.1 ICS SENEGAL
IFFCO has successfully set up joint venture fertiliser projects abroad. It holds around 18.54% equity in Industries Chemique du Senegal (ICS) that primarily manufactures phosphoric acid in Senegal. ICS has captive rock phosphate mines which are used for phosphoric acid production. Apart from providing equity support to ICS, IFFCO has committed to buy back all the phosphoric acid produced by ICS.
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3.6.2 OMIFCO
IFFCO along with KRIBHCO and Oman Oil Company has promoted Oman India Fertiliser Co. Ltd. (OMIFCO) for setting up and operating Urea-Ammonia fertiliser plant at Sur, Oman. Production at this facility has commenced since July, 2005. IFFCO’s share in the joint venture is 25% and has committed for long term off-take agreement for urea and surplus ammonia from OMIFCO.
3.6.3 JORDAN INDIA FERTILISER COMPANY
IFFCO and Jordan Phosphates Mines Company Ltd. (JPMC), Jordan have formed a joint venture company namely Jordan India Fertiliser Company (JIFCO), for setting up a setting up a Phosphoric acid plant of 1500 MT per day P2O5 capacity at Eshidiya in Jordan. IFFCO will hold 52% equity while 48% equity is held by Jordan Phosphate Mines Company Ltd.
3.6.4 KISAN INTERNATIONAL TRADING
IFFCO has set up a wholly owned subsidiary “Kisan International Trading FZE” in Dubai, for handling shipping, logistics including import of IFFCO’s fertiliser raw materials, intermediates and fertiliser products. KIT caters to the requirements of imported urea for consumption in India through state trading enterprises like MMTC and IPL. IFFCO’S investment in the company is Rs. 11.0 crores.
3.6.5 LEGEND INTERNATIONAL HOLDING, AUSTRALIA
IFFCO has entered into collaboration with Legend Holding Australia for mining of rock phosphate consumed at its Paradeep plant. IFFCO holds around 11% equity in this project.
3.7 MARKETING OF FERTILISERS 3.7.1 The distribution of IFFCO's fertiliser indigenous production and imports are undertaken
through its entire network of cooperative societies and farmer service centers in 29 states / UT’s in the Country and through the State Federations. The entire activities of Distribution, Sales and Promotion are coordinated by Marketing Central Office (MKCO) at New Delhi assisted by the Marketing offices in the field. Around 62% of sales are made directly to the societies, as a matter of policy IFFCO channels its entire sales through cooperative network. In addition essential agro-inputs for crop production are also made available through the Farmers Service Centres (FSC) spread over 10 states.
IFFCO is a unique experiment in production and marketing of fertilisers. Consumers of fertilisers have come together to set up this cooperative society to manufacture fertilisers for their own captive consumption. IFFCO has despatched 85.96 lakh tonnes of fertiliser material from the plants and ports during the year 2007-08.
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3.8 ALL INDIA SHARE OF PRODUCTION
(Production figures in ‘000 MT)
Nitrogen
Fertilisers
(N)
2008-09 2007-08 2006-07
All India Production 10894 10902 11525
Cap. Util. 91% 91% 96%
IFFCO Production 2329 2236 2217
Cap. Util. 98% 94% 93%
IFFCO’s Share 21.4% 20.5% 19.2%
Phosphate
Fertilisers
(P2O5)
All India Production 3397 3709 4440
Cap. Util. 64% 70% 80%
IFFCO Production 918 994 1129
Cap. Util. 54% 58% 66%
IFFCO’s Share 27.0% 26.8% 25.4%
Total
Fertilisers
All India Production 14291 14611 15965
Cap. Util. 82% 84% 89%
IFFCO Production 3247 3230 3346
Cap. Util. 81% 81% 83%
IFFCO’s Share 22.7% 22.1% 21.0%
3.9 FINANCIALS 3.9.1 The financial highlights of IFFCO as on 31st March, 2009 and for the previous year are
indicated in the table below:
as on 31st March, 2009 as on 31st March, 2008
Rs. in Crores Rs. in Crores
Equity Share Capital 426.28 423.93
Reserves and Surplus 3532.59 3264.73
Net Worth 3958.87 3688.66
Turnover (incl. subsidy) 32933.30 12162.82
Profit (PBT) 441.95 380.52
Profit After Tax (PAT) 360.01 257.59
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3.9.2 Key Financial Indicators
as on 31st March, 2009
as on 31st March, 2008
Operating Profit to Sale 6.50% 7.80%
Return on Capital Employed 3.12% 3.50%
Profit before Tax to Net Worth 11.16% 10.31%
Fixed Assets Turnover 6.32 times 2.38 times
Inventory of Finished Goods (Months Sales)
0.12 0.76
Inventory of Raw Material and Packing (Months Consumption)
0.74 1.25
Current Ratio 2.41: 1 4.21: 1
Debt Equity Ratio 3.23 : 1 1.84 : 1
Sales per Employee (Rs. in Crore)
4.87 1.80
3.10 CORPORATE SOCIAL RESPONSIBILITY (CSR) CSR is seen in IFFCO’s concern for preservation of the environment and social structure
by contributing to the sustainable economic development involving employees and their families, the local community and the society at large, to improve the quality of life in ways that are also good for IFFCO. In its endeavor to discharge its responsibility, IFFCO undertakes activities covering areas of Community Development, Environment Protection & Horticulture, Health Care / Medical Facilities and Literacy Enhancement / Empowerment Programmes. Various Social Development activities undertaken are:
3.10.1 Village Adoption Programme was initiated by IFFCO with the objective of bringing about overall socio economic development in rural areas with emphasis on agriculture with correct use of fertilisers, quality seeds and better farm management.
3.10.2 Promotional Programmes and Farmers Extension Activities are organized with focus on improving soil health, improving the N:P:K consumption ratio, educating farmers in the latest available techniques to enhance crop productivity, water conservation and promoting sustainable agriculture. These activities provide for opportunity for interaction between IFFCO, cooperatives and farmers.
3.10.3 Special Projects to help the farmers at disadvantaged locations are undertaken by IFFCO. These programmes help the locals improve their livelihood and set an example for other Govt. agencies to improve the village communities. These projects focus on watershed management, agricultural development and micro enterprises, assisting self help groups in earning their livelihood.
3.10.4 Kiosks, IFFCO’s Cyber Dhabas (Farmer Information Kiosks) are being provided with a desktop computer along with internet connectivity to gain access to useful information and avail of other services. 108 such kiosks have been installed in various states with information developed in 10 Indian languages.
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3.10.5 Environment Management is undertaken at all IFFCO units and townships. IFFCO is committed to continuously improving the Safety, Health and Environment in and around its manufacturing units in line with international norms.
3.10.6 Storage cum Community Centers are being operated, that are used for storage of fertiliser and other agricultural inputs, apart from providing venues for organizing agricultural extension activities and social functions for villagers.
3.10.7 IFFCO Kisan Sewa Trust is a charitable trust to provide relief and rehabilitation to the victims in the event of natural calamities like floods, earthquakes, droughts, landslides, etc. and to undertake programmes for the welfare and critical medical attention of needy farmers. The trust organizes eye camps, health camps, cancer detection camps, arranging blood, arranging medical assistance and providing medical equipment to hospitals.
3.10.8 Indian Farm Forestry Development Cooperative Limited (IFFDC) has been promoted by IFFCO as a separate multi state cooperative society with the objective of developing wastelands for tree plantation to enhance the socio economic status of rural poor through sustainable natural resource management. Afforestation and rural development programmes have been initiated in the states of Uttar Pradesh, Madhya Pradesh and Rajasthan where 26190 hectares wasteland has been converted to forests. These operations are being extended to other states in the Country.
3.10.9 Cooperative Rural Development Trust (CORDET) promoted by IFFCO provides practical training to farmers to improve their skills in crop and animal husbandry, horticulture, farm mechanization and various vocational crafts and skills. The trust has establishments at Phulpur (U. P), Kalol & Kandla (Gujarat). During the last year 229 training programmes benefiting 22, 221 farmers including women from various states have been arranged.
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CHAPTER - 4
KANDLA PORT INFRASTRUCTURE AND CARGO HANDLING
4.1 Following are the existing infrastructure available at Kandla port and port operating data, as per information provided on Kandla port’s website:
4.2 Terminals: Kandla port has 10 berths, 6 oil jetties, 1 maintenance jetty, 1 dry dock and small jetties for small vessels, which can accommodate from large to small vessels. Near all these terminals and jetties there are facilities for storage of cargo covering cargo received in containers to petroleum products.
4.3 Wharf Cranes:
Sixteen Wharf cranes are available that include: • 4 wharf cranes of 3/6 tons capacity • 4 heavy duty, modern, state of the art, having lifting capacity of 12/16 tons.
4.4 Weighbridges: Nine weighbridges inside the port, which include: • Four Weighbridge of 40 MT capacity • One Weighbridge of 50 MT capacity • One Weighbridge of 60 MT capacity • One Weighbridge of 80 MT capacity • Two Private Weighbridge of 40 MT & 20 MT capacities respectively.
4.5 Other Support Equipment:
• Easy availability of loading equipment such as Forklifts, Tractor, Trailers, Pay loaders of various capacities.
• Private handling equipment like Mobile cranes, Top lifters, Pay loaders, Forklifts, Heavy duty Trailers, etc. available on hire at competitive rates.
4.6 Various Facilities:
• Total custom bonded port area of 185 hectares. An additional 76.5 hectares is being developed.
• Eleven dry cargo berths in straight quay line in sheltered creek with a total length of 1987 meters.
• Six oil / liquid cargo jetties. • One deep draft mooring and four cargo moorings in the inner harbour area for stream
handling. • Loading/Unloading facilities for barges available for stream handling. • Seventy licensed private barges available at competitive rates. • Adequate storage capacity in both dry and liquid areas. • 66 KV power supply at the port. • Standby power to the extent of 2000 kV available for emergency operations. • Well developed road network directly connecting the national highway. Railway network
connecting the broad gauge main line which is being upgraded.
4.7 Berth occupancy chart: Berth occupancy chart for cargo jetties at Kandla port indicate high occupancy as per figures mentioned in the table below:
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Year Berth occupancy in percentage
2001-02 89%
2002-03 94%
2003-04 90%
2004-05 89%
2005-06 80%
2006-07 91%
2007-08 89%
4.8 Traffic handled (Imports & Exports):
Year Traffic handled, imports and exports (Lakh metric tonnes)
2002-03 406.11
2003-04 413.88
2004-05 409.32
2005-06 449.56
2006-07 517.18
2007-08 631.95
4.9 Vessel Traffic – Category wise:
Year 2007-08 (No. of vessels) 2006-07 (No. of vessels)
Dry bulk 598 461
Liquid bulk 1208 906
Break bulk 557 505
Containers 235 252
Others 0 0
Total 2598 2124
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4.10 Average pre-berthing time:
Year Time (in Days)
2002-03 0.70
2003-04 0.46
2004-05 0.69
2005-06 0.82
2006-07 1.47
2007-08 1.36
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CHAPTER - 5
PRODUCTION AT PLANT AND
IMPORTS BY IFFCO 5.1 Details of Production and Receipts of imported raw materials at IFFCO plant for the
previous five years is indicated in the table below.
5.2 Entire quantity of liquid cargo has been handled at Kandla port.
5.3 Imports of solid Raw Materials (RM) and fertiliser products have been handled at Kandla and Mundra ports.
Units 2004-05 2005-06 2006-07 2007-08 2008-09
Production at plant MT 24,40,100 26,86,500 24,75,550 20,18,000 17,93,650
Liquid Raw Material Imports
Phosphoric Acid, in bulk*
MT 12,91,329 13,27,623 10,34,818 8,74,970 6,51,117
Ammonia MT 4,09,515 4,28,219 3,76,975 2,87,644 2,29,367
Furnace oil MT
Total 17,00,844 17,55,842 14,11,793 11,62,614 8,80,484
Solid Cargo Raw Material Imports
Fertiliser product Imports
MT 25,400 3,91,355 4,36,027 6,81,208 4,19,605
RM cargo - Potash MT 3,99,148 6,43,277 5,08,450 5,56,274 6,17,430
RM cargo - MAP MT - 35,717 2,40,045 62,216 1,54,540
RM cargo - Urea MT 73556 41,544 17,822 41,796 15,526
Total MT 4,98,104 11,11,893 12,02,344 13,41,494 12,07,101
G. Total MT 21,98,948 28,67,735 26,14,137 25,04,108 20,87,585
* Phosphoric acid in terms of P2O5 has been converted into bulk by multiplying factor of 1.38.
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CHAPTER - 6
PROJECT SCOPE
6.1 The existing liquid cargo jetty of IFFCO and oil jetties located adjacent to the plant are designed for handling liquid cargo through pipelines. The berthing structure as well as its approach is not designed for withstanding the load of heavy duty material handling equipment required for unloading cargo from barges.
6.2 The proposed barge jetty shall be used for handling various type of non hazardous and non explosive dry cargo.
6.3 Facility for unloading by barges at the proposed barge jetty will encourage other large cargo vessels to call at Kandla port. Importers can avail of lower freight rates on account of larger vessel size for maximum use of barge jetty.
6.4 Location of the barge jetty is indicated in drawing No. KPG-659, enclosed herewith.
6.5 SCOPE OF THE PROJECT FOR CONSTRUCTION AND OPERATION OF CAPTIVE
BARGE JETTY 1. IFFCO shall provide all weather suitable barge jetty with berthing facilities for handling
barges (draft of 4.00 m) carrying cargo of 2000 - 5000 MT off Kandla creek between OJ-V and OJ-VI. The entire facility shall be built, operated and maintained by IFFCO.
2. The anticipated dimensions of the barge jetty shall be 120 m long and 20 m wide. There will be no approach bridge for the barge jetty. The entire area comprising 36,000 sq. meters shall be reclaimed and developed for receiving and unloading cargo from barges. IFFCO’s solid raw materials shall be transported by trucks to the storage areas in the plant. Imported fertiliser shall be unloaded and transported by trucks to the storage godowns where weighing and bagging facility shall be provided. Bagged product shall be directly loaded into railway wagons. Required covered storage godowns shall be constructed along side the existing railway line within IFFCO factory premises.
3. IFFCO shall provide suitable access point from barge jetty to existing factory boundary to transport raw materials by truck movement.
4. All the materials to be handled shall be solid and non-hazardous and non-flammable. These include Muriate of Potash (MOP), Di-Ammonium Phosphate (DAP), Mono-Ammonium Phosphate (MAP) and Urea. In future any other solid material as raw material for fertiliser plant or finished fertiliser product can be handled at the jetty. Safety and Environmental requirements shall be fulfilled.
5. The minimum design load of barge jetty shall be considered at 5 MT/ sq. Mtr. The barge jetty and approach shall be designed for the proposal of material handling with adequate safety factor and as per standard design codes and practices.
6. KPT shall provide right to use to IFFCO for using the barge jetty and allied facilities to berth barges bringing cargo from mid stream unloading of large shipments.
7. IFFCO shall have first right for berthing their barges on this jetty. Kandla Port Trust shall provide ousting priority berthing at the barge jetty for barges carrying cargo belonging to IFFCO.
8. IFFCO shall provide Minimum Guaranteed Throughput of handling 1 MMTPA of cargo consisting of Potash, Urea, DAP or MAP etc., after commissioning of the barge jetty. One year period shall mean twelve months from date of commissioning. Commissioning shall mean successful unloading of first shipment cargo at barge jetty free from any hindrances.
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9. If the total material handling per annum is less than 1 MMTPA of cargo including other users at, IFFCO shall be responsible for Minimum Guaranteed throughput of handling 1 MMTPA less the cargo of other users in the particular year. Suitable modalities for compensation shall be worked out in case of shortfall in the minimum throughput per annum.
10. Other users may utilise the barge jetty when not in use by IFFCO, on mutually agreeable charges. The prior consent of IFFCO shall be needed in each case separately for unloading the material.
11. The quantity received as per survey shall be final for calculating the throughput for the year.
12. Kandla Port Trust land of 36,000 sq. meters area will be utilized for the construction of the barge jetty adjacent to the existing factory boundary.
13. Kandla Port Trust shall facilitate the construction of the jetty by IFFCO who shall obtain all sanctions / approvals for barge jetty and allied facilities from relevant statutory authorities. Required assistance for obtaining statutory approvals and approval of drawings, etc. for construction of barge jetty shall be provided by Kandla Port Trust
14. Kandla Port Trust shall at all times render full assistance by way of providing easy entry and free access to the site to IFFCO personnel/ persons authorized by IFFCO who shall be free to carry and bring equipment/ materials as shall be required for constructing the jetty and its maintenance.
6.6 DETAILS OF CONSTRUCTION JOBS: IFFCO engaged M/s IIT Madras as Civil Consultant for the conceptual design and tender
documents required for construction jobs of barge jetty with the following details:
1. Reclamation and development of 36,000 sq. meters of land at the proposed location for construction of barge jetty.
2. Construction of barge jetty having anticipated dimensions of 120 meters length and 20 meters width.
3. Construction of pile foundation for barge jetty. Adequate number of approximately 1000 mm diameter cast in-situ piles shall be provided.
4. Superstructure shall be constructed having pre-cast / cast in-situ slab :
Construction details of the Superstructure are as follows:
Pre cast members comprising of :
Main beams Secondary beams Pile cap Slab
Cast in-situ slab
Wearing cost
Reinforcement
Steel ladders with inserts & hand rails.
5. Construction of cylindrical hollow rubber fender having about 300 mm diameter, complete with chains, inserts, hooks, RCC grouting, etc., shall be made at the barge jetty.
6. Construction of storage godowns for imported raw materials and fertilisers shall be done along side existing railway line within IFFCO factory premises..
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7. Providing cranes, excavators for unloading materials from barges.
8. Providing of bollard arrangement having approximately 30 ton capacity.
9. Existing fire fighting arrangement available on IFFCO’s captive liquid cargo jetty shall be extended to provide protection to the barge jetty.
10. Electrification jobs for lighting and power supply for belt conveyor motors.
11. Providing environmental facilities as per requirement.
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CHAPTER - 7
PROJECT SITE INFRASTRUCTURE
AND SITE ADVANTAGES
7.1 LOCATION OF SITE The geographical location and coordinates for the proposed plant shall be:
Latitude 23o 00’ 00” N Longitude 70o 13’ 26’’ E 7.2 METEOROGICAL DATA
Air temperature Maximum Minimum
43.4o C 7.7o C
Rainfall Average per annum Maximum recorded in an year Heaviest rainfall
48.1 cm 86.2 cm 25.6 cm in 24 Hours.
Barometric Pressure Maximum Minimum
760 mmHg 755 mmHg
Wind Velocity Average Maximum Maximum 3 second gust
30 kmph 100 kmph 160 kmph
Relative Humidity Maximum Minimum
99% 14%
7.3 INFRASTRUCTURE FACILITIES 7.3.1 Ports : Kandla port is an excellent, natural, all weather, well protected port and serves as
the sea gate to North – West India. IFFCO has its captive jetty for unloading its phosphoric acid and ammonia shipments, which is directly pumped to the storage tanks through unloading pipelines.
7.3.2 Rail / Road: Kandla is well connected to the hinterland by railway lines and by all weather roads including a National highway No. 8A. The despatches of fertilisers are made by both modes rail and road depending on the destination where the fertiliser is required.
7.4 With the responsible role played by IFFCO in the fertiliser sector, it is essential to strengthen the organisation’s infrastructure to handle the bulk solid materials either as raw material or as imported fertiliser products. One such proposal is to have a dedicated captive barge jetty at Kandla adjacent to the existing oil jetty of IFFCO (OJ-V).
7.5 Adequate space is available between OJ-V and IOC jetty (OJ-VI) to maintain the distance of about 200 m from the edge of IOC jetty and 182 m from the edge of IFFCO jetty.
7.6 Since the material being handled shall be solids of non-explosive nature, these distance are adequate to meet the requirement of department of explosives.
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7.7 SITE ADVANTAGES 7.7.1 Present Status and Limitations of Existing System:
The following are the major limitations faced in handling imported cargo unloaded at Kandla port solid cargo jetties and transported to the factory by road, are listed below:
1. Panamax vessels with full capacity cargo cannot be directly received at Kandla port, due to draft limitations of the port. Due to cost economy and also likely increase in fleet of Panamax and post Panamax vessels, direct use of existing port facilities for berthing large ships is not feasible.
2. Even with proposed new cargo berth Nos. 12 & 13 having draft of 13 to 14 meters, there shall be limitation to receive these large vessels.
3. With new berthing facilities created by Kandla port, the distance for truck / dumper movement is increasing.
4. Currently Panamax vessels are received at Mundra port and after suitable lightening, they arrive at Kandla port. Dual port operations increase cost of handling and result in higher loss of cargo.
5. Due to increased traffic at port, the vessels have to wait for period of 3 to 10 days depending upon the congestion at port and priority berthing of vessels.
6. With expected increase in traffic as anticipated by port authorities, there is likelihood of incurring demurrage on vessels due to longer waiting time.
7. Shutdown of plant on account of raw material limitation due to delay in berthing and unloading of raw material shipments is likely to increase.
8. The north gate of port has been closed to truck / dumper operations due to safety and security reasons and only west gate is available which increases the road movement by about 16 km for the to and fro travel from port premises to raw material storage areas at IFFCO plant. This increases the cost of operation.
9. The trucks / dumpers have to cross the national highway 8A to reach the factory premises. Traffic on the national highway is heavy due to import and export activities at Kandla, delaying receipt of cargo at the plant.
10. Heavy road traffic particularly on the national highway, which shows increasing trend, delays the receipt of trucks / dumpers at the plant and result in bunching of trucks / dumpers which overloads and upsets unloading operations at the plant.
11. The material loss also increases due to longer distance travelled by trucks / dumpers from the port to the plant.
12. The fertiliser material is hygroscopic in nature and spillage on road during transportation occurs despite preventive measures.
13. The material spilled on roads make the road slippery and unsafe. Public is affected due to such conditions. Also when humidity is high, such material cannot be recovered by road sweeping / cleaning operations.
14. The spillage and windage loss leads to environment pollution.
7.7.2 Advantages of barge jetty to IFFCO, KPT and other users: The proposed barge jetty shall be beneficial to IFFCO, KPT and other port users. It shall
also be helpful to the neighbouring small and medium business organisations, residents and public.
Construction of the barge jetty shall be useful for reducing traffic congestion and pollution. It shall be an initiative for environment protection.
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7.7.3 Following are the list of advantages for construction & operation of captive barge jetty by IFFCO:
1. IFFCO shall be able to handle all its solid raw materials and fertiliser product without any time delay.
2. It shall be convenient to bring Panamax vessel directly to Kandla port and receive the material through barges from mid stream of outer tuna buoy.
3. Receiving Panamax vessel shall bring cost advantage in terms of lower cargo freight per metric tonne of material imported by IFFCO.
4. Timely receipt of material would facilitate uninterrupted production. Plant operations can be streamlined for achieving higher raw material consumption efficiencies and optimum plant operating efficiency.
5. Handling of imported fertiliser directly from barge jetty will ensure timely production and despatch of fertiliser from plant and availability of fertiliser to the farmer when the same is required.
6. Road handling of solid cargo from Kandla port to IFFCO plant premises shall be eliminated. This will result in saving of transportation cost, environment protection and safety of roads will get enhanced.
7. IFFCO shall be able to receive larger quantities of imported material. This would be economical as well as operational convenience of handling and bagging of fertiliser in the existing plant facilities shall become advantageous.
8. Material handling losses shall reduce due to shorter transportation distance.
7.7.4 The following shall be the advantage to M/s Kandla Port Trust : 1. Construction of the barge jetty will reduce the traffic congestion at Kandla port. Higher
quantity of cargo can be handled at existing cargo jetties at Kandla port increasing the cargo handling capacity, productivity and efficiency of Kandla port.
2. The number of days occupied by IFFCO vessels is about 120 days for cargo of 10.0 lakh metric tonnes. This is significant and handling of additional tonnage of imports / exports at existing cargo jetty will increase the cargo handling capacity at Kandla port.
3. The other users shall be able to get their cargo discharged faster and there would be direct time saving and reduced demurrage payments which will result in business advantage to other port users leading to increased cargo handling at Kandla port.
4. The port area and national highway traffic will reduce; this will facilitate faster vehicular traffic for transportation of other cargo.
5. The overall prospects after construction and operation of barge jetty are favourable to Kandla Port Trust and IFFCO. This shall be a direct saving to our Nation in terms of fuel for transportation, material losses and environment protection.
6. IFFCO will be able to provide efficient service to the farmers of our Country.
7.7.5 Advantages to public and environment: 1. Reduction in congestion of road traffic is a direct advantage to public. A number of tankers
carrying oil product and chemicals are plying on the route. Salt production and processing
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business is the maximum in the Kandla area. Reduction of traffic shall facilitate rapid and easy movement of material for these business entities.
2. The spillage of material and its escape in environment during transportation by trucks / dumpers will be avoided. This shall contribute to environment protection, which is the responsibility of every organisation.
3. Fertiliser material is usually hygroscopic in nature. This makes the road slippery, especially during periods of high humidity and rainfall. This is hindrance to road safety. With material handling at being carried out at the barge jetty by mechanical means, this aspect shall be eliminated and roads shall be clean and safe.
4. Another factor is loss of material during periods of high humidity, due to which the material cannot be swept and collected.
7.8 Experience of IFFCO during operations of captive liquid cargo jetty: IFFCO commissioned its captive liquid cargo jetty in April 1998. With its consistently smooth operation of more than 10 years, it has proven to be beneficial to IFFCO, Kandla Port Trust and other users importing chemicals.
IFFCO has saved a substantial amount due to nil demurrage payments. Timely receipt of raw materials has helped in uninterrupted plant operations. Kandla port has utilised IFFCO jetty for other users and this has increased the cargo handled at Kandla port and has provided additional infrastructure facility to other port users.
On similar lines, it is anticipated that construction and operation of captive barge jetty shall be useful for IFFCO, Kandla Port Trust and other port users for increasing the effectiveness of their business operations.
7.9 Reasons for exclusive interest of IFFCO for construction of barge jetty: 1. The available water front in the creek is adjacent to IFFCO plant and direct maximum
benefits shall be realised by IFFCO for unloading of solid cargo and transportation to storage areas in the plant premises.
2. The total quantity of fertiliser products and raw materials imported by IFFCO shall significantly increase turnover and utilisation of barge jetty.
3. The location of barge jetty shall result in saving of transportation expenditure by IFFCO.
4. Other third party shall need to circumvent the IFFCO periphery for unloading and transporting cargo from the barge jetty to their works. The road distance across which material unloaded from barges is to be transported by any other party will be similar to that from the existing Kandla port jetties. Hence maximum benefits of construction and operation of barge jetty shall not accrue to any other party apart from IFFCO.
5. Required operations for unloading material from barges by any other party shall include :
a) Operation for unloading cargo to a suitable intermediate storage location.
b) Shifting of cargo from intermediate storage point to the party’s works by road.
6. With land availability in the vicinity being scarce, barge jetty operation by any other party would be very inconvenient.
7. Hence, it is unlikely that any other party will be interested in setting up barge jetty at the location proposed by IFFCO. However, IFFCO shall set up provision for use of this barge jetty by other small to medium port users.
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7.10 Limitations and risk factors for construction of barge jetty: The international economic scenario for fertilisers is challenging and tough. Having a strong infra-structure to meet the fertiliser demand in the country is of prime national importance.
IFFCO is moving a step forward in this direction for constructing of captive barge jetty at Kandla.
However, the limitations and risk factors associated with the project are detailed below:
1. Availability of barges at Kandla with the stevedoring & handling agents is limited.
2. Cost of barge operation and competitiveness of bidders is uncertain.
3. Since, many of the Panamax vessels are gearless, readiness of stevedoring and handling agent to provide the unloading infrastructure from gearless vessels in mid stream is uncertain. This will add to cost and will need evaluation of cost parameters critically for economical option of barge operation.
4. The need to assure handling of 10,000 MTPD of cargo through barges at economical rates is uncertain.
5. The volatile international economic scenario with respect to availability of raw material for fertiliser and finished fertiliser products shall affect the bulk solid handling capacity at the barge jetty.
6. The creation of additional infrastructure by Kandla port or any other agency in the vicinity that would enable direct berthing of Panamax vessels shall affect the economy of barge operations.
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CHAPTER - 8
ENVIRONMENTAL CONCERNS
8.1 IFFCO is committed to continuously improve the environment in and around its manufacturing units in line with international norms. IFFCO Kandla unit has designed and adopted Environment Management System (EMS) according to International guidelines which have received the International Standards Organization Certification ISO 14001: 2004, valid up to 23rd November 2012 for the Operational Scope "Manufacture of DAP and NPK Fertilisers ". A copy of the Certificate is attached below.
The Policy adopted at IFFCO Kandla plant as part of its Environment Management System states commitment to carry out business in an environmentally responsible manner. For achieving the same, objectives are set, evaluated, monitored and results communicated and documented for assessing the environmental performance of the plant. The following guiding principles have been set:
1. To implement appropriate Environment Management System.
2. To comply with all applicable environmental and other legislation and endeavor to improve upon them in a prudent manner with good business sense.
3. To promote sustainable development through better operating practices that would reduce pollution, minimize waste and optimize utilization of resources.
4. To increase Environmental Management System awareness among all employees and contractors to achieve the set environmental objectives and targets.
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8.2 ENVIRONMENTAL SYSTEMS FOR BARGE JETTY 8.2.1 Major environmental benefits from this proposal shall be reduction in the number of trucks /
dumpers plying for transportation of material from port premises to storage areas in the plant, which shall help in significantly reducing the vehicular emissions and improve the local environment.
8.2.2 Transportation of raw material and fertiliser products by trucks / dumpers would result in spillage along the road. Despite the cleaning operations carried out, a lot of material would get carried away due to wind causing environmental disturbance, which shall be eliminated.
8.2.3 Due care shall be taken to avoid loss of material while transferring from barges to storage areas at IFFCO plant by internal truck movement.
8.2.4 Latest technology shall be adopted for minimising environmental pollution during construction and operation of the captive barge jetty.
8.3 AMBIENT AIR QUALITY 8.3.1 Five Nos. of ambient air monitoring stations have been provided in all directions at the
factory boundary for monitoring the quality of ambient air in the surroundings of the factory. Analysis reports of IFFCO as well as samples collected by Environmental Auditor / State Pollution Control Board indicate that all parameters are within the stipulated limits.
8.3.2 The barge unloading operations and material transportation operations are likely to result in small quantities of the material getting carried away by wind. Adequate protection for avoiding windage losses shall be provided.
8.3.3 Reports on analysis of ambient air quality are regularly sent to Gujarat Pollution Control Board and half yearly reports are submitted to the Regional Office of the Ministry of Environment and Forests.
Details of ambient air analysis reports of last five years are presented in the table below:
24 Hourly Values
GLC for Pollutants in Ambient Air in micro gms/M3
SPM SOx NOx Ammonia RSPM
Permissible Value
500 120 120 400 150
2003-04 142 6 9 - -
2004-05 144 7 12 - -
2005-06 169 7 13 251 -
2006-07 281 12 17 322 105
2008-09 299 12 17 305 107
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8.4 GREEN BELT DEVELOPMENT The company has endeavored in maintaining eco-balance by way of tree plantation within
the plant premises and development of green belt all around the plant. Extensive plantation is carried out every year. The survival rate of plants is very low due to saline soil and adverse weather conditions. On going efforts are taken to increase the area under plantation. Additionally, green belt development is undertaken at IFFCO Township, Gandhidham town and surrounding villages.
The existing area covered under green belt and number of trees grown works out to 46% of the total plant area, which is more than the stipulated 33% plant area, laid down by Central Pollution Control Board directives.
Total area covered under Green Belt is as follows:
Plant = 15 acres, Trees = 3000 Nos. Township = 60 acres, Trees = 26000 Nos. Gandhidham Town = 5 acres, Trees = 5000 Nos.
Total Area covered is 80 acres, which works out to 46% of the total plant area of 174 acres. IFFCO has also carried out Green Belt Development in Panthia village of Kutch district as follows:
Panthia = 80 acres, Trees = 26,000 Nos.
8.5 ENVIRONMENTAL AUDIT Third Party Environment Audit is carried out once every year by Schedule–1 environmental
auditor recognized by Gujarat Pollution Control Board (GPCB) as per the directives of the Hon. Gujarat High Court & GPCB.
8.6 EFFORTS FOR WATER CONSERVATION The Kutch district where Kandla plant is located suffers from perennial water shortage.
Hence IFFCO takes all measures to reduce the consumption of water. In order to reduce the water consumption and yet to maintain the greenery at the plant site and township, reuse of treated domestic sewage water at plant and township was undertaken and implemented successfully.
Rain water recharging well has been constructed at the township with a storage pond of 20,000 cubic meters capacity for conserving rain water which is effective in reducing the salinity in the underground water table.
A number of check dams have been built in various villages to prevent rain water runoff into the sea. The check dams collect rain water which helps to reduce the salinity of the ground water, improve the ground water table, and make water available to the villagers even after the monsoon season.
Providing / maintenance of drinking and irrigation water lines at villages adopted by IFFCO under the village adoption programs is done, so that this scarce resource may be better utilized and wastage of water is minimized.
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8.7 FLORA & FAUNA 8.7.1 Flora Kutch district falls in the arid / semi-arid zone. Kutch district gets a very scanty
rainfall, the soil structure is Desert Soil, which is silty and saline in nature. Most of the area is barren or with growth of wild tropical thorny, bushy shrubs. The normal vegetation consists of thin kandi & babool trees & leafless wild caper or kerad bushes which are common everywhere as well as coarse grass in areas that are subjected to frequent inundation by sea water.
Most of the surrounding area is barren or grow with desert shrubs. Greenery has been developed inside the plant after quite an amount of hard work. Coconut trees, Badam, Neem & other plantation (Horticulture & Decorative plants near Administrative Building) give a green look inside the premises. The green belt around the factory serves as an indicator for pollution from existing plant. The plants are green and healthy and are not affected by emissions from the existing plant.
IFFCO Township is the model example of green patch in the desert area of Kutch. It is green everywhere with nurseries, gardens (roses, fruits etc), greenery in each individual house, trees on the both side of all the roads giving an enchanting view. The township has coconut farm, neem trees, Ashoka trees, Amaltoash, Gulmohar, Mango, Chichoo, Seesam trees etc.
8.7.2 Fauna The famous Siberian cranes & flamingos fly in during winter seasons for breeding.
A lot many of them can be seen on the land beside Kandla creek in winter. The fauna of Kutch is similar to the fauna of any dry area with the peculiarity that the area is a transition zone for a number of sub-species of birds.
8.8 STATUTORY APPROVALS Requisite prior environmental clearance from Ministry of Environment and Forests shall be
obtained. Statutory license and approval from Chief Controller of Explosives shall be obtained. All required legal requirements with respect to construction and operation of captive barge jetty shall be complied.
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CHAPTER - 9
PROJECT MANAGEMENT
9.1 PROJECT IMPLEMENTATION
The following services shall be carried out by specialists in the field of construction of barge jetties like basic engineering jobs, detailed engineering design, foundation design for jetty, etc. Experienced civil contractors shall be appointed for carrying out specialized jobs like construction of foundation for jetty, erection of unloading equipment, etc.
The various consultancy services and contract works shall be assigned to the parties by going through IFFCO’s standard procedure. Bids shall be invited from suitable vendors / parties. Technical evaluation of the bids shall be carried out and the technically qualified parties / vendors will be asked to submit their price bids. Thus competitive bidding route shall be followed for placing orders for various jobs and supplies for the project.
9.2 ENVIRONMENTAL CLEARANCE
Environment Clearance from the Ministry of Environment & Forests (MoEF) has to be obtained for all projects relating to infrastructure as per the guidelines of the EIA Notification dated 14th September 2006, shall be obtained. M/s WAPCOS, Gurgaon is engaged for the required EIA studies. The complete environmental clearance process is expected to take around four to six months time.
9.3 ZERO DATE The zero date for the project shall be declared after Environmental Clearance for the project is received.
9.4 PROJECT SCHEDULE AND MILESTONES The project shall be commissioned in 24 months from the zero date. Anticipated completion schedule for major project activities are as under:
(I) The civil construction of barge jetty including foundation shall be completed in 18 months.
(II) Other facilities required at barge jetty shall be provided simultaneously, however such jobs shall be completed within 6 months time after completion of civil construction work.
9.5 PROJECT MONITORING AND SCHEDULING Project monitoring shall be done on basis of a PERT chart. The critical path as per chart shall be monitored to ensure timely execution of the project.
The progress of various activities of the project shall be monitored on basis of S-curve.
Review meetings shall be held at the project site with various project groups, consultants and contractors for review of actual progress, to gear up the activities, if necessary, for additional resource mobilization and co-ordination in order to achieve targets as per schedule.
Sectional meetings of engineering groups shall be done at regular intervals for review and analysis of activities and develop action plan to overcome imitations, if any.
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The following shall be the project scheduling and monitoring reports giving the status and progress of the project:
1. Monthly progress report :
This report shall include the major project activities completed during the month. The activities shall be classified into basic & detailed engineering, procurement, construction, erection and commissioning. The quantitative progress of the project shall be given for each of these activities with overall progress based on weightage assigned to each activity. This shall be compared against the target progress. Cumulative progress till the month shall also be reported and compared. The project shall give highlights of financial commitments and expenditure as per approved project budget heads. The status and progress of procurement activities and work orders at different stages shall be included in the report. Major activities planned for the next month shall be highlighted in the report. The progress of each activity and overall progress shall be monitored on S-curve for actual progress against the scheduled progress.
2. Quarterly Report :
The report shall summarise the major project progress on quarterly basis and summary presentation shall be made for progress of major activities, commitments & expenditure, critical areas of concern and the major steps taken to achieve the targeted progress.
3. Construction report :
A weekly construction report shall be made. Every construction activity shall be quantified and progress of each activity shall be monitored on weekly basis and cumulative till the week.
4. Flash reports :
These reports shall be generated to highlight the overall progress and progress of critical activities. Action taken report shall be prepared in case flash report highlights delay of any milestone activity.
The reports to ministry and other statutory agencies shall be submitted as per directives from ministry concerned and statutory authorities.
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CHAPTER - 10 ORGANISATION HEIRARCHY
10.1 The organization structure at IFFCO Kandla plant is defined in the chart below. Existing staff are to be redeployed and no additional employment for this project is proposed to be made.
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10.2 The Organization Structure of the offsite section that handles port operations and which shall handle barge jetty operations is defined in the chart below.
10.3 Existing manpower for port handling operations is adequate and shall be handling barge jetty operations. No additional manpower is required during construction and operation of proposed barge jetty..
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CHAPTER - 11
CAPITAL COST ESTIMATES
11.1 Break up of capital cost of the Project is provided in the table below:
SL. NO. DESCRIPTION AMOUNT
(Rs. IN LAKHS)
1.
Construction of 120 x 20 meters barge jetty,
back up area and dredging
1100.00
2.
Construction of 25,000 sq. meters of covered
godowns
1250.00
3. Dredging of barge jetty 150.00
4. Taxes and Duties 100.00
5. Consultancy services 11.03
6. Interest During Construction 126.49
Total 2737.60
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CHAPTER - 12 FINANCIAL STRUCTURE
12.1 The project cost excluding interest during construction is Rs. 2611.03 Lakhs which is
proposed to be financed through a combination of Long Term Debt and Equity Share Capital in 3: 1 Ratio. Long Term Debt would amount to Rs. 1958.27 Lakhs and Equity Share Capital shall be Rs. 652.76 Lakhs.
12.2 It is proposed that the debt portion shall be raised by way of long term loan from Banks / Financial institutions at an interest rate of 9.75% per annum including upfront and arranging costs.
Loan repayment period of 5 years has been considered.
Moratorium period is One year. In 1st year, no instalment towards principal amount will be paid. It is assumed that interest for 1st year shall be paid in the later period. Interest payments are assumed to be made along with instalment at the end of the quarter.
12.3 If the draw down of Debt and Equity is proportionate as mentioned above, the financial structure of the project inclusive of Interest During Construction (IDC) would be as indicated in the table below:
Total Project Cost Rs. 2737.60 Lakhs
Debt : Equity ratio 3 : 1
Equity Rs. 652.76 Lakhs
Base Debt Rs. 1958.27 Lakhs
Interest During Construction Rs. 126.49 Lakhs
Total Debt including IDC Rs. 2737.60 Lakhs
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CHAPTER - 13 FINANCIAL ANALYSIS
13.1 In order to determine the economic viability of the project, financial analysis has been done
based on current prices for operating period of 20 years.
13.2 The barge jetty shall be designed for handling 2.0 million metric tonnes of cargo per annum. However cargo guaranteed by IFFCO is 1.0 MMTPA. IFFCO proposes to handle cargo of 1.50 MMTPA including fertiliser raw material and products, which has been considered for working out the financial viability of the project.
13.3 EXPENDITURE PHASING The project construction would take place over a period of two years. It is assumed that about 30% of the total expenditure would be incurred in the first year and the balance 70% of expenditure will be incurred in the second year of construction. Details of phasing of expenditure are given in the table below:
Phasing of Expenditure
1st Year 2nd Year Total (Rs. in Lakhs)
Phasing of Expenditure 30% 70% 100%
Expenditure 783.31 1827.72 2611.03
Equity 195.83 456.93 652.76
Loans 587.48 1370.79 1958.27
Interest During Construction 47.73 78.76 126.49
Total Project Cost
Including Interest
831.04 1906.48 2737.60
13.4 PROJECT FIXED COST
The annual fixed costs for operation of the barge jetty work out as follows:
Item Rate in % Total Annual Expenditure
(Rs. in Lakhs)
Repair and Maintenance 2% of capital investment on equipment
11.00
Salaries & Wages Existing manpower shall be utilised 0.00
Insurance 0.03% of capital investment 0.80
Depreciation 5.28% as per Income Tax Rules 144.60
Interest on loans 9.75% p. a 110.00
266.40
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13.5 REVENUE TO KANDLA PORT TRUST The revenue realization from the barge jetty shall accrue to Kandla Port trust by way of
higher cargo handling at existing cargo jetties and from vessel related charges collected by Kandla port. The Port shall also receive revenue by way of berth hire charges from other private parties as utilising the barge jetty for cargo handling operations.
13.6 TAXES Income Tax rate has been taken at the prevailing rate of 33 % & 3% education cess. Including 3% of the taxable amount as secondary education cess, the total tax rate works out to 33.99%.
13.7 TOTAL COST OF OPERATIONS PER MT The total annual cost per MT for operation of the barge jetty, based on 1.50 MMTPA of cargo handling works out as follows.
Description Cost of Operations
(Rupees per MT)
Variable Cost 235.16
Fixed Costs 17.76
Total cost 252.92
13.8 INTERNAL RATE OF RETURN Based on the above mentioned base conditions, the projected financial statements indicate an Internal Rate of Return (IRR) as under:
IRR Pre Tax 18.63 %
IRR Post Tax 15.68 %
IRR of the project is higher than the cost of borrowing which indicates that the project is profitable.
13.9 PAYBACK PERIOD Based on the above IRR values, payback period works out to 7.50 years, which is
attractive for investment in infrastructure projects.
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13.10 SENSITIVITY ANALYSIS
The operating cost of the barge jetty shall get compensated by the freight advantage obtained from shipment of cargo in large carriers. This freight advantage margin will proportionally impact the profitability of the barge jetty operations. Sensitivity Analysis of IRR worked out considering (i) variable revenue earnings at base operating cost (ii) variable cargo handling capacity at base freight margin. The results are indicated in the tables below.
Revenue Earnings Margin variation
Annual Revenue from Third party operations,
Rs. in Crores
6.0 6.5 7.0 7.5 8.0
Average Profit after Interest & Tax, Rs. in Lakhs
301 334 367 400 433
IRR % 12.7% 14.2% 15.7% 17.1% 18.5%
Payback Period, Years 9.1 8.2 7.5 6.9 6.3
Cargo handling capacity variation
Annual cargo handling, MMTPA
1.0 1.25 1.5 1.75 2.0
Average Profit after Interest & Tax,
Rs. in Lakhs
345 356 367 379 390
IRR, Post Tax in % 14.7% 15.2% 15.7% 16.1% 16.6%
Payback Period, Years 8.0 7.7 7.5 7.3 7.1
13.11 COSTING WORKSHEETS: Detailed worksheets are enclosed.
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CHAPTER - 14
DRAFT MOU WITH KANDLA PORT TRUST
MEMORANDUM OF UNDERSTANDING
(Preliminary Draft MOU to be finalized after final discussions by KPT and IFFCO) This memorandum of Understanding (hereinafter referred to as ‘MOU’) is made at Gandhidham (Kutch) on this the day of the month of ___ Two Thousand and Nine by and between Board of Trustees for the Port of Kandla a body corporate constituted under the provisions of the Major Ports Trusts Act, 1963 and having its Administrative Office at Gandhidham (Kutch) 370 201 (hereinafter referred to as “Kandla Port Trust”, which expression shall, unless repugnant to the context or meaning thereof, include its successors and permitted assigns) on the one part ;
AND
Executive Director, IFFCO Kandla, representing Indian Farmers Fertiliser Cooperative Limited (IFFCO), registered as a Multi State Cooperative Society functioning under the provisions of the Multi State Cooperative Societies Act, 2002 and having its Registered office at C-1, District Centre, Saket, New Delhi-110017 (hereinafter referred to as IFFCO which expression shall, unless repugnant to the context or meaning thereof, include its successors and permitted assigns) on the other part. KPT and IFFCO are hereinafter referred to as ‘Parties’ and individually as ‘Party’. WHEREAS IFFCO, is desirous of implementing a project envisaging development of a barge jetty and allied facilities off Kandla creek between Oil jetties, OJ-V and OJ-VI having infrastructure like land reclamation and development, berthing facility for barge and fire fighting facilities at the barge jetty as per OISD rules. Storage godowns shall be constructed along side the existing railway line within IFFCO premises. WHEREAS IFFCO’s Kandla Plant presently imports its complete requirement of solid raw materials and receiving and handling of imported fertilisers at existing Kandla port cargo jetties. In order to overcome the uncertainties of berthing schedules of its solid cargo shipments due to congestion at port and to increase the reliability of raw materials availability for its production facilities by expediting the unloading operations of the shipments immediately on arrival, a long term strategy of utilising facility of barge jetty close to its plant located between OJ-V and OJ-VI as envisaged by IFFCO is the most convenient and feasible modus operandi. WHEREAS IFFCO has its factory located adjacent to the proposed barge jetty. The entire area shall be reclaimed and developed. Cargo received in barges shall be unloaded by grab cranes or excavators and dumped into trucks for transportation to storage areas in the plant. Alternatively, the cargo can be unloaded into dumpers and transported to the storage godowns having weighing and bagging facility. Bagged fertiliser product material shall be directly loaded into railway wagons. WHEREAS In order that the best interest of both parties are served, this MOU is being agreed upon under the mentioned Terms & Conditions, which have been arrived at after discussions and deliberations. NOW, THIS MOU WITNESSETH AS FOLLOWS:
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PROJECT FACILITIES OF SETTING UP BARGE JETTY 1. IFFCO shall provide all weather suitable barge jetty with berthing facilities for barges (draft
of 4.00 m) carrying cargo of 2000 to 5000 MT off Kandla creek between OJ-V and OJ-VI. The entire facility shall be built, operated and maintained by IFFCO. Kandla Port Trust shall allocate required land; provide necessary guidance, requisite approvals and other services required by IFFCO for stable and smooth construction and operation of the barge jetty.
2. IFFCO, in addition, shall provide suitable entry point at the barge jetty for its raw materials and fertiliser product handling.
3. All the materials to be handled are solid and non-hazardous and non-flammable. These include Muriate of Potash (MOP), Di Ammonium Phosphate (DAP), Mono Ammonium Phosphate (MAP) and Urea. In future any other solid material as raw material for fertilizer plant or finished fertilizer product shall be handled at the jetty in compliance with CRZ notification 1991.
4. The minimum design load of barge jetty shall be considered at 5 MT/ Sq. Mtr. The barge jetty and approach shall be designed with adequate safety factor and as per standard design codes and practices.
5. Kandla Port Trust shall provide IFFCO rights to use the barge jetty and allied facilities for barges bringing cargo for IFFCO.
6. IFFCO shall have first right for berthing their barges on this jetty. Kandla Port Trust shall provide ousting priority berthing in the above facilities for the barges carrying cargo belonging to IFFCO.
7. IFFCO shall provide Minimum Guaranteed Throughput of handling 1 MMTPA of cargo consisting of Potash, Urea, DAP or MAP etc. after commissioning of the barge jetty. One year period shall mean twelve months from date of commissioning. Commissioning shall mean successful unloading of first shipment cargo at barge jetty free from any hindrance.
8. If the total material handling per annum is less than 1 MMTPA of cargo including other users at, IFFCO shall be responsible for Minimum Guaranteed throughput of handling 1 MMTPA less the cargo of other users in the particular year. Suitable modalities for compensation shall be worked out in case of shortfall in the minimum throughput per annum.
9. Cargo of other agencies can be handled at the barge jetty when not in use by IFFCO, on mutually agreeable charges. The prior consent of IFFCO shall be needed in each case separately for unloading the material.
10. The quantity received as per survey shall be final for calculating the throughput for the year.
11. Kandla Port Trust shall facilitate the construction of the jetty by IFFCO who shall obtain all sanctions/ approvals for barge jetty and allied facilities from competent statutory authorities including environmental clearance from Ministry of Environment & Forests, Chief Controller of Explosives, Nagpur, Gujarat Pollution Control Board and any other statutory authorities. Approval of construction drawings, etc shall be done by Kandla Port Trust before submitting the same to statutory bodies for clearances, etc.
12. Kandla Port Trust shall at all times render full assistance by way of providing easy entry and free access to the site to IFFCO personnel/ persons authorized by IFFCO who shall be free to carry and bring equipment/ materials as shall be required for constructing the jetty and its maintenance.
(II) PERIOD OF AGREEMENT
The Period of Agreement with Kandla Port Trust shall be for a period of 30 years from the date of signing of MOU. Provided on expiry of the Agreement, the Terms & Conditions of
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the Agreement shall be reviewed and a fresh Agreement may be entered into with the mutual consent of the Parties. However the limiting condition shall be as under:
“The tariff shall be as fixed by the tariff advisory committee in accordance with TAMP guidelines at that time”
For the purpose of this agreement, the expression "a year" means any period of twelve months, beginning from the date of commissioning of Jetty and allied facilities with uninterrupted operations.
(III) ALLOTMENT OF WATER FRONT TO IFFCO
For construction of IFFCO barge jetty and allied facility, Kandla Port Trust shall allow IFFCO to utilise water front under its direct control and ownership.
(IV) TARIFF: (a) IFFCO shall pay the wharfage charges to Kandla Port Trust as per scale of rates in vogue
and revised from time to time and which shall be applicable for recovery.
(b) IFFCO shall pay only 25% of berth hire charges as per Kandla Port Trust schedule of rates for barge unloading. In case 100% charges are paid by vessel owners to Kandla Port Trust, 75% will be reimbursed to IFFCO. For other users, 50% of berth hire charges will be retained by Kandla Port Trust and balance 50% berth hire charges will be paid to IFFCO.
(c) IFFCO shall ensure payment of vessel related charges such as port dues, pilotage fees, mooring charges, stream dues, anchorage fee etc. for their chartered vessels/ barges as prescribed by Kandla Port Trust in scale of rates from time to time and shall ensure payment of such charges to Kandla Port Trust without any disputes. In case of other users, Kandla Port Trust may direct and advise them to pay these charges directly to Kandla Port Trust.
(V) OTHER TERMS AND CONDITIONS: 1. IFFCO will bear the cost of providing infrastructure facilities, services, maintenance and
operations of the barge jetty and other facilities.
2. If IFFCO barge has to wait due to maintenance activities or breakdown of unloading system at the barge jetty when used by other users on instructions of Kandla Port Trust, all such demurrages shall be to the concerned users account and payable to ship owners by them.
3. IFFCO shall provide fire fighting facility for the barge jetty. Kandla Port Trust shall also extend the facilities for providing fire float in case of any emergency and hire charges thereof shall be borne by IFFCO in case IFFCO’s operations are in progress. In case of other users operating the barge jetty at the time of emergency, Kandla Port Trust shall direct and advise other users to reimburse the hire charges to Kandla Port Trust.
4. Kandla Port Trust shall provide as per requirement pilot, tugs, launches, fire fighting facility and other services related to berthing, mooring, unmooring, unberthing and other port/ harbour related activities
5. IFFCO shall be responsible for the insurance of the jetty and other facilities.
6. Kandla Port Trust shall direct and advise other users to ensure safety and security of their operations at IFFCO’s barge jetty. In case of any damage to jetty or its facilities, the
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concerned other user shall make full payment to IFFCO as per Estimates of IFFCO to make good the entire damage caused and its other consequences that arise or may arise due to the damage so caused.
7. Other users shall be responsible towards safe and proper operation of barge jetty and associated facilities during unloading of their cargo. In case of damage, repair and maintenance of the barge jetty or associated facilities shall be carried out by IFFCO and charges for the same are payable by the party that is unloading its cargo, which shall be advised accordingly by Kandla Port Trust before berthing of barges at the jetty carrying cargo belonging to other parties.
8. Kandla Port Trust shall direct and advise other users to indemnify IFFCO against any loss, which may occur during the use of the barge jetty.
9. Kandla Port Trust shall advise other users for proper and safe use of the barge jetty and other facilities provided by IFFCO, including good housekeeping in the entire area.
(VI) EVENTS OF DEFAULT
Events of Default means Kandla Port Trust’s Event of Default or IFFCO’s Event of Default or both as the context may admit or require.
Event of Default means any of the following events:
1. Kandla Port Trust’s failure to perform or discharge any of its obligations in accordance with the provisions of this Agreement.
2. IFFCO’s failure to perform or discharge any of its obligations in accordance with the provisions of this Agreement.
3. Other users failure to perform or discharge any of its obligations in accordance with the provisions of this Agreement and as per other mutual terms of agreement including case to case basis of agreement terms while using IFFCO’s barge jetty.
4. In the Event of Default, the party issue a Notice to the other party on whose Event of Default, in writing specifying in reasonable detail the underlying Event of Default(s) and proposing Consultation between the parties to consider possible measures and curing or otherwise dealing with the underlying Event of Default (Consultation Notice) and following the issue of Notice of Consultation by either party within a period of 90 days or such extended period as they may agree (Remedial period) endeavour to arrive at an agreement as to manner of rectifying or remedying the underlying Event of Default.
5. If during the Remedial Period, the underlying Event of Default is either cured or waived or the Parties have agreed upon any of the measures, the Consultation Notice shall be withdrawn by the party who has issued the same.
(VII) DISPUTE RESOLUTION: 1) Amicable Settlement:
If any dispute or difference or any claims of any kind arise between Kandla Port Trust and IFFCO in connection with application of any terms or conditions or any matter or in any way connected with or arising out of this Agreement, the parties shall meet together promptly, at the request of any party, in an effort to resolve such dispute, difference or claim by discussion between them.
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2) Arbitration a) Appointment of Arbitrator:
Failing amicable settlement, the disputes, differences or claims, as the case may be, shall be finally settled by appointing an Arbitrator under Arbitrator and Conciliation Act, 1996 and the award shall be final and binding upon the Parties.
b) Performance of obligations:
During Amicable Settlement or Arbitration, both the parties continue to perform their obligations not withstanding the disputes/proceedings unless both the parties specifically agree to desist from performing under this Agreement.
c) Place of Arbitration:
The venue of Arbitration shall be Gandhidham. The Proceedings of Arbitration shall be in English / Hindi and, if oral hearing takes places, English / Hindi shall be the language to be used in the hearings.
d) Fees & Expenses:
Fees and Expenses of Arbitration and all other expenses of the Arbitration shall be initially borne and paid by respective parties subject to determination by the Arbitrators. In case of sole arbitration, the fees and expenses will be shared equally.
(VIII) MISCELLANEOUS PROVISIONS: 1) Separability:
If for any reason whatsoever any provision or any part(s) of this Agreement is held or shall be declared to be void or illegal or invalid under present or future laws or regulations effective and applicable during the License Period, by any competent arbitral tribunal or court, such provisions shall be fully separable and this License shall be constructed as if such provision or such part(s) of this Agreement never comprised part of this Agreement and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by such void or illegal or invalid provision or by its severance from this Agreement.
2) Waiver: No waiver of any term or condition or of the breach thereof by any party shall be valid
unless expressed in writing and signed by such party and communicated by such party to the other party. A waiver by any party of any term or condition or breach thereof in a given case shall not be deemed or construed as a general waiver of such term or condition or the breach in the future or waiver of any other terms or conditions or breach of this Agreement.
3) Amendments, Modifications, etc.: No amendments, modifications or alterations of or any additions to the terms and conditions of this Agreement shall be valid unless the same is evidenced in writing and is duly signed by authorized representatives of both the parties.
4) Governing Law: This Agreement shall be governed by and construed in accordance with the laws of the Republic of India.
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5) Force Majeure: (a) The force majeure means and includes the natural calamities like floods, earthquakes,
storms, fire, war and act of God.
(b) Neither party to this agreement shall be liable for non performance of any of its obligations under this agreement in so far as such non performance is occasioned by factors governed under force majeure nor shall this agreement come to an end on account thereof.
(c) The notice of occurrence of any such factor shall be given by the affected party within a period of one week of the occurrence of such factors. The performance of respective obligations of the parties under this agreement shall be resumed as soon as such factors which have resulted in the non performance cease to occur. A week notice regarding the cessation of such factors may be given by either party before the performance is resumed/ is called upon to be resumed, if required.
6) Notices: Unless otherwise stated, notices to be given under this Agreement including but not limited
to a notice of waiver of any term or related or breach of any term of this Agreement shall be in writing and shall be given by hand delivery, recognized courier, mail telex or facsimile transmission and delivered or transmitted to the Parties at their respective present addresses as follows:
1(a) Indian Farmers Fertiliser Cooperative Ltd.
Kandla Unit,
Post Box No 12,
Kandla (Kutch) – 370210
(b) Indian Farmers Fertiliser Cooperative Ltd.
Head office
C-1, District Centre
Saket
New Delhi - 110017
2. KPT
Kandla Port Trust,
Administrative Office Building,
Gandhidham (Kutch) - 370201
Notices if delivered by hand shall be deemed to have been received on the date of delivery and if sent by registered post shall be deemed to have been received in due course of post.
In witness whereof this MOU the parties have set their hands and seals on the day and year first above written, Signed and Sealed by IFFCO in the presence of
Signed, Sealed and Delivered by KPT in the presence of:
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L. Murugappan Executive Director (Kandla) Chairman
Indian Farmers Fertiliser Coop Ltd. Kandla Port Trust
Witnesses: Witnesses:
1. 1.
2. 2.
