Construction of Sardar Mandir at Surat. Urban development. Government of Gujarat

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1 Construction of Sardar Mandir at Surat Urban development Government of Gujarat

2 Contents Project Concept Market Potential Growth Drivers Gujarat Competitive Advantage Project Information - Location/ Size - Infrastructure Availability/ Connectivity - Key Considerations Project Financials Approvals & Incentives Key Department Contacts Page 2 10 October 2016

3 Project Concept Conceptualization of Sardar Mandir Sardar Mandir, a convention centre is second of its kind in Gujarat. The Mandir is being constructed on the lines of Mahatma Mandir, a world class convention and exhibition centre at Gandhinagar, Gujarat. It is expected that by 2021, Surat, the business capital will be a twin city Surat-Navsari with a population of 11.5 million. Therefore, at this time, the project is inevitable for the mega twin cities as well as for the South Gujarat region. The convention centre is expected to provide National & International meet facility, provide facility for traders of south Gujarat to organise trade fares in turn boosting the commerce industry, help build a new recreation centre, lead to development of tourism and hotel industries, and also create huge business opportunities. Global Business Travel Market Business Travel MICE In 2014, globally, business travel had a market share of US$1.18 billion MICE accounts for 54% market share of the global business travel MICE segment is majorly dominated by Conferences/Seminars/Meetings (41%), followed by Trade Fairs/ Exhibitions (29%) Business travel in India India's Travel and Tourism sector contribution to GDP stood at INR2,668.3 billion i.e. 2% of GDP in The contribution is expected to rise by 7.1% in 2016 GDP Contribution 2015 INR 2668b While the leisure tourism in India generates 83.2% of India s GDP, business tourism generates 16.8% In 2015 Business Travel contributed INR1,198.9 billion, expected to grow to INR1,302.9 billion at a rate of 8.7% With this lies a huge potential in the business travel market of India The GOI is looking at developing MICE tourism along with National MICE Promotion Bureau which will work in tandem with state governments and help in maximizing the MICE activity throughout. Source: HVS Trend Report 2015 Page 3 10 October 2016

4 Market Potential Gujarat stands at an excellent business opportunity for domestic and international tourists Domestic tourist arrival in Gujarat (in million) International tourist arrival in Gujarat (in million) FY11 FY12 FY13 FY14 FY15 FY16 FY11 FY12 FY13 FY14 FY15 FY16 Source: TFIS annual report FY16 Business Tourism Landscape Of the total business tourism to Gujarat, more than 50% of the business tourism is captured by cities like Ahmedabad, Surat, Vadodara and Rajkot The four business centers saw an increase in business tourism at the rate of 19.05% CAGR over the period FY13-FY15. Of these cities, Surat ranks second with a total tourist flow of 1.98 million of which business tourist accounted for approximately 89.74% flow million 2015 Business Tourist Market in Surat Surat, the second largest city of Gujarat, is also known as the business capital of Gujarat One of the top ten contributors towards GDP of India, the city is famous for its diamond and textile business and has also received multiple national and international recognitions. In 2014, Microsoft recognized Surat, as the first Smart IT city in India FY09 FY12 FY15 Source: TFIS Annual Report (numbers are in millions) In FY15, Gujarat saw more than 1.9 million tourists visiting Surat of which 89.74% visited the city for Business Purposes Over the period of six years, from FY09 number of approximately 0.6 million to an FY15 number of 1.8 million, Business tourism of Surat grew at a CAGR of 13% Page 4 10 October 2016

5 Market Growth Drivers 1 One window clearance Gujarat government has established indextb(industrial Extension Bureau), single window clearance nodal agency to simplify the administrative procedures and accelerate industrial development. The industry provides information to prospective investors on opportunities available in the State of Gujarat for industry, commerce and trade. 2 Government Initiatives Following initiatives taken by Government of India and Government of Gujarat will help MICE tourism grow- Marketing of India as a tourist destination under Incredible India Scheme Under Market Development Assistance (MDA) scheme, financial support will be extended to the active members of India Convention Promotion Bureau (ICPB), on winning the bid Gujarat government promotes development of MICE in urban centres State government will be actively promoted and followed under the PPP mode 3 4 Amendment in Surat-Navsari Twin sports promotion City under CSR Rules Surat is the fourth fastest developing cities of the world. Development of nearby areas like Navsari along with Surat will foster the economic development of Surat and bring more business to the city. 4 Home to textiles and diamond industry, Surat is also an 5 Hub for Chemicals emerging center for chemicals and petrochemicals industry. In order to facilitate the same, a large petrochemical complex is Talent and Pool Petrochemicals being promoted, which is expected to fasten the industrial and economic growth of the city. Page 5 10 October 2016

6 Gujarat Competitive Advantage Surat ranks fourth in a global study of fastest-developing cities in the world in terms of economic prosperity. Smart City Mission Young demographic dividend Surat has the potential to become a smart metro city. Upcoming mega infrastructure projects like Bullet Train, Mumbai- Ahmedabad expressway, dedicated freight corridor will boost the trade and economy of the region. More than 70% of Surat s population is under 35 years of age. This indicates availability of potentially large working population. The young population naturally tends to have an inclination towards sports. Effective Governance system Advanced systems and capabilities The city has an efficient and effective governance system with most of the civic services being available online and citizens can do most of the transactions online on Surat Municipal Corporation (SMC) s website and Mobile application. Advance systems like CCTV surveillance, Mobile APP, Tertiary Treatment Plan for recycling waste Water, Underground Cabling, Energy from Renewable sources, Wi-Fi hotspots etc. are already present in Surat. This makes it an ideal investment destination High GDP growth rate High Quality Infrastructure Surat has registered high GDP growth rate of 12 to 13% from It contributes to 42% of world s total rough diamond cutting and polishing; accounting for US$10 billion, which forms approximately 65% of the total diamond exports from India. Surat has adequate water supply network covering 95 % of the city with some parts having 24*7 water supply. 95% of the city is covered by underground sewerage system. Surat has waste to energy plants installed for converting sewage waste to energy. Page 6 10 October 2016

7 Project Information Background Surat Municipal Corporation (SMC) is wanting to develop a Convention and Exhibition center, Sardar Mandir for national and international conventions, exhibitions, trade fairs, seminars, conferences etc. The project is expected to create huge business opportunities, especially for South Gujarat traders, leading to a boost in the commerce industry SMC has identified four adjoining plots in the South West zone of Surat City, with a total land area of square meter in Magdalla, Surat Town Planning Scheme No Vesu Magdalla TPS No Vesu Magdalla TPS No Vesu TPS No Vesu Magdalla TPS No Area (in sq. meter.) As per the mandatory requirements of Ministry of Tourism, a convention center should have at least one convention hall, two mini convention halls, one exhibition hall, one restaurant and parking facilities. Besides, in order to further facilitate the customers, the convention center is likely to have infrastructural facilities like VIP lounge, travel desk, bank and money changing facilities, locker facilities and also, a handicraft shop to enhance the value of the center. In order to develop this project, SMC is willing to use its own fund and has estimated the cost to be INR850 million Although, the project is being entirely funded by SMC, it can also receive funding assistance from smart city mission as Surat has been declared as one of the Smart Cities. Page 7 10 October 2016 Man power requirement S No. Position Requirement 1 Supervisor 04 2 Technicians 12 3 Lift in charge 02 4 Electricians 05 5 Security System 08 6 Housekeeping 20 Total 51 Note: The man power requirement has been calculated with reference to the same required at Mahatma Mandir, Gandhinagar

8 Project Information Infrastructure availability/ connectivity Rail Surat is connected with other districts of the state such as Rajkot, Vadodara and Ahmedabad by rail. The proposed site in South West Zone of Surat is ~15 kms away from the Surat railway station. Proposed The Mumbai-Ahmedabad bullet train project will have Surat as one of the stations. In 2016, the Gujarat government assigned Delhi Metro Rail Corporation as a consultant for the proposed metro connectivity in Surat. Road The city is connected to Delhi Mumbai Industrial Corridor (DMIC) which links Ahmedabad, Vadodara and Surat. Proximity to NH-8 and NH-6 further enhances connectivity in the city. Surat also has very good connectivity with other cities of the state such as Vadodara (154 km) and Ahmedabad (265 km). Proposed Proposed four-lane highways which are expected to improve connectivity in Surat include Dakor-Savli, Vadodara-Dabhoi & Surat-Olpad-Bardoli. Air Port Surat domestic airport is well connected to various parts of the country. The city is located ~275 kms from the international airport at Ahmedabad. Proposed In January 2015, Airports Authority of India gave an in-principle approval for cargo terminal at Surat airport worth INR70 million. The terminal is expected to be operational in In February 2016, Surat Airport Action Committee filed an online petition for an international airport at Surat. Utilities Water The nearest port is Hazira which is 25 km from Surat. Additionally, Hazira port is well connected to Mundra port and Jawaharlal Nehru Port Trust (JNPT) India s largest container port Thus, it provides a convenient textiles-related trade gateway to International (Europe, Africa, America and the Middle East) and domestic markets. Power Water for industrial purposes can be obtained from four sources viz. Gujarat Water Supply and Sewerage Board (GWSSB), an irrigation canal, dams, and surface reservoirs. The main source for the power supply is Torrent Power Limited in Surat Page 8 10 October 2016

9 Project Financials Surat Municipal Corporation, the intended developer of the facility has estimated the cost of project to be around INR850 million. Project components & specifications Marketing & Brokerage Operating Expenses for Convention Centre Operating and Maintenance Cost of the total revenue 20% of the revenue from Convention Centre Operating Expenses for Hotel 40% of the revenue from Hotel Components & Specifications Project Development Cost Debt Syndication Equity Syndication Launch marketing Other pre-operational expenses Insurance during Construction Interest during construction Consultancy Pre Operating Costs of Construction of of of Construction of Construction of the landed cost for each of the Construction of per of the Landed Cost Cost of building a convention center Project components & specifications Cost (INR per sq. ft.) Site Development 200 Civil Work (Convention Centre and Hotel) 1,200 Civil Work (Basement Parking) 900 Cost of Furnishing (Convention Centre) 1,800 Cost of Furnishing (Hotel) 2,000 Cost of Machinery and Equipment INR10 million Note: The numbers have been taken in reference to a Convention Centre, Karnataka Page 9 10 October 2016

10 Project Information Key Considerations Policy support The Gujarat government is keen on developing Surat into a business tourism city. Also, the industry status given to tourism sector will help industry get benefits such as loan interest subsidies, concession in taxes, as well as in electricity duty. Good Governance Surat being part of Gujarat, enjoys the status of one of the least corrupt region of India. This fastens up the clearance of projects which ultimately benefits the industry. Railway Facelift Railway ministry along with Gujarat government is looking at redeveloping the Surat Railway Station. This will not only give a facelift to the existing station but also improve the connectivity making it viable for business opportunities. Improving Air travel With the increasing number of air travel to Surat, especially for the business purpose, has prompted the Ministry of Civil Aviation to improve air connectivity to Surat. Moreover, looking at the air travel demand for Surat, Air India has decided to run daily services to the city Surat Diamond Bourse Surat, the diamond city of India, processes almost 95% of the world s diamonds. Totaling to a size of INR0.9 million and employing over 2 million people, it serves as the hub of Indian diamond manufacturing. In order make Surat a world class diamond market, a diamond bourse is being set up in the city. This will not only provide trading facility but also bring all the people concerned with the business under one roof Page October 2016

11 Approvals & Incentives Approvals Required Government Approval The Gujarat Town Planning and Urban Development Act, 1979 The Gujarat Municipalities Act Gujarat Provincial Municipal Corporation Act, 1949 Environment clearance No Objection Certificate from the Gujarat Pollution Control Board Environmental Clearance (EC) from Ministry of Environment and Forest (MOEF) Arrangement of power Captive power - Gujarat Energy Transmission Corporation Limited (GETCO) Key financial incentives Interest subsidy to the eligible tourism units Government of the loan amount with maximum amount of INR2.5 million per annum for a period of five years in Municipal Corporation areas for eligible tourism of the loan amount with maximum amount of INR3.0 million per annum for a period of five years in the areas other than mentioned above. Page October 2016

12 Surat Municipal Corporation SE TransStadia Pvt. Ltd Industries and Mines Department, Gujarat indextb - Industrial Extension Bureau This project profile is based on preliminary study to facilitate prospective entrepreneurs to assess a prima facie scope. It is, however, advisable to get a detailed feasibility study prepared before taking a final investment decision. Block No.6, 5th Floor, Udhyog Bhavan, Sector No. - 11, Gandhinagar CIN : U75140GJ1999SGC Telefax : / 128, / 66 Fax Exten. : contact@gudcltd.com