Global Investors Meet

Global Investors Meet - 2012 Karnataka: Transportation and Logistics February 2012 Page 1

Karnataka: Demonstrating immense potential in India s transport sector While India s transport sector caters to the need of 1.1-billion people, country s economic growth over the last 2 decades has increased demand for all transport services India has the world's second largest road network, aggregating over 3.34 million km and carry about 65 per cent of freight and 80 per cent of passenger traffic Indian railways system has the largest rail network in Asia and is the world's second largest, working under a single management. The Indian coastline comprises of 12 major ports, 187 minor ports and ranks 16th among the maritime countries and has one of the Karwar largest merchant shipping fleet India has the 3rd largest market, after US and China aviation Tadadi Haldipur The transport sector is also the second largest consumer of energy, next only to industrial & commercial energy consumption Karnataka: State spends10% of expenditure (US $ 645 million) on Transport sector First airport in the country to initiate Public Private Partnership model: Bengaluru International Airport Third city to have metrorail: Phase I is operation and 42.3 km long; Proposed 134 km of metro lengthby 2017 Budget Allocation: Budgetary Allocations for Infrastructure Sector, especially for improving Air, Rail and Port connectivity has increased at 63% from US $ 88.5 million in 2009-10 to US $ 143 million in 2010-11 New Mangalore Port International Airport National Highway Domestic Airport State Highway Railways Major ports Upcoming ports 9th major port in India: New Mangalore Port has the deepest inner harbor on the west coast Page 2

Airports: increasing state s dominance in Indian aerospace infrastructure Expansion of Bangalore International Airport Terminal I with investment of US$ 312-million: Capacity for 17.2-million passengers, although will be able to handle 11.4- million passengers by Phase I completion in December 2012 Terminal II: in planning stage with capacity for 55-million passengers 2 nd Runway in planning stage Four major private airports- in major metro cities of the country- have added a capacity of around 140 mn passengers per annum with a total investment of US$ 5,498 million. Network of regional airports, airstrips and helipads fuel industrial growth, connectivity amongst tourist areas, and provide backup for emergency services Investment Potential in Karnataka: Development of low-cost regional airports and airstrips with investments of US$ 542- million in public-private-partnership mode Regional airports: 8 airports in key industrial areas with total investments of US$ 167-million (Expansion of Hubli and Belgaum being prime focus). Low-cost airstrips: In areas where airports cannot be supported, development of 4 airstrips (Raichur, Gadag, Chickmangalur, and Chitradurga airstrips are available under PPP) requiring 80-90 acres each, and total investments of US$ 25.7- million, proposed for supporting industrial growth International and Domestic Airports Domestic Airports Proposed PPP-based Greenfield Airports Proposed Airstrips Belgaum Shimoga Gadag Dharwad Bijapur Gulbarga Raichur Bellary Aviation needs 2021 (P) 2031 (P) Chitradurga Number of additional airports 13 25 Population (100,000s) 709 823 Population per airport (100,000s) Karnataka 70.91 32.90 India 28.1 29.6 Mangalore Chickmagaluru Hassan Mysore Bengaluru(dev eloped on PPP model) Increased industrial activity driving the need for additional freight and cargo movement; ongoing projects include Airports Authority of India expanding airports in Hubli and Belgaum with investments of US$ 31-million, each Shimoga (674-acres) and Gulbarga (670-acres) airports will be operational on PPP basis by December 2012 Status Airport Acres International Bangalore 4,000 International Mangalore 397 Domestic Mysore 425 Page 3

Ports: seizing opportunities along state s extensive coastline Investment Potential: Expansion of major ports and construction of new ports Expansion of Karwar port to add capacity of 30-million MT Green field, multi-purpose all weather ports at Tadadi and Haldipur with a total capacity of 53 million MT. Manki declared as minor port (captive port) All the ports in Karnataka handled a total cargo of about cargo of 44.91-million MT in 2007-08 New Mangalore Port: 9 th major port in India, with the deepest inner harbor on the west coast Handled traffic of 36.69 MTA and the most LPG (1.91-million MT) of all major ports in India in 2010-11. Port New Mangalore Karwar Minor Ports (including Fishing) 2010-11 Revenue US$ 75.6-million US$ 2.01-million US$ 7.43-million Tadadi Port: Development of a port with capacity of 34-million MT with gross investments of US$ 614- million on BOOT basis Location: Latitude 14 0 13.5 N Longitude 74 0 21.5 E Water front: Significant waterfront area in the estuary of Aghanashini river Hinterland connectivity: Konkan-Railway Line(Hubli-Ankola Railway Line), National Highways 17 and 63, and Honnavar Tumkur National Highway 206 Vast stacking area and scope to develop with modern infrastrural facilities Konkan Railway line,n.h.17 passing very close and linkage of Ankola Hubli Railway line is under progress. Vast water front facilities Existing Facilities: Light House structure, R.C.C. jetty, transit shed Haldipur: Development of port with capacity of 19- million MT using Swiss Challenge Route with investments of US$ 395-million Location :Latitude 14 0 16.3 N Longitude 74 0 27.1 E Water front: located on the right bank of the Sharavathi river Hinterland Connectivity: Konkan Railway line and N.H.17 passing very close to the port. Environmental position is quite good Sourrended by hills, forests and Sharavathi river Emphasis on coastal shipping (conceptualisation for the same is under process). Existing facilities:first stage Lighterage wharf of 400 long with a stacking area of69,000 sq.ft., Second stage lighterage wharf 564 long with about 3,00,000 Sq.ft of stacking area, Transit shedfacility. Page 4

Ports: seizing opportunities along state s extensive coastline Major and minor ports in Karnataka Minor Port Major Port Iron ore Exporting Region Port Type Activity Belekeri Minor Ports Cargo Tadri Minor Ports Cargo Honnavar Minor Ports Cargo Bhatkal Minor Ports Fishing Kundapur Minor Ports Cargo Hangarkatta Minor Ports Fishing Port Type Activity Malpe Minor Ports Fishing Padubidri Minor Ports Cargo Old Mangalore Minor Ports Cargo New Mangalore Port Major port Cargo Karwar (Proposed for expansion) Major port Cargo Page 5

Roads: enabling state s connectivity with the rest of India Target density Investment Opportunity by 2020 Capacity addition Investment opportunity 1.5 km per 1000 square km 100,000 km US$ 26,041-million Karnataka is well connected with all the six neighboring states and other parts of India through 14 NHs, accounting for 6% NH network of India Karnataka State Highways Improvement Project (KSHIP) has developed 2394 Km of road with an expenditure of US $ 474 million Karnataka Road Development Corporation Ltd. has undertaken construction of 853 bridges, of which 613 bridges have been completed Road development implemented through PPP models such as Build-Operate- Transfer (Tumkur-Nelmangala, Elevated Expressway to E-City) and annuity projects (Bengaluru-Maddur) Government of India has provided US$ 34.4- million ( 165-crore) in Viability Gap Funding grant and Government of Karnataka US$ 19.2- million ( 92-crore) for PPP-based projects on development of roads National Highwayconnectivity: US$39.6- million ( 190-crore) for 83-km road from NH-63 near Ginigere Gangavathi to Sindhanoor Inter-state connectivity: US$ 57.5-million ( 276-crore) for 102-km road (SH-20) from AP Border near Devsugur Chikkasugur Raichur to Lingsugur Kalmala US$ 35.8-million ( 172-crore) for 77-km road(sh-25) from Shimoga Honnalli to Harihara Type of Road Major District road 50,436 State Highway 20,528 Municipal Road 8,366 National highway 4,490 Length in Km Other Roads 147,212 All Roads 231032 Source: Economic Surveyof Karnataka 2010-11 Road length in Karnataka increased by 43% in the last 10 years Ongoing Projects NHAI connecting 3 NHs (NH 17, NH 48, NH 13) with New Mangalore port Up gradation of National Highway 63 between Gooty (in Andra Pradesh)and Ankola (Karnataka) In Km 2,50,000 2,00,000 1,50,000 1,00,000 50,000 1,09,551 1,30,924 1,54,204 2,19,935 0 1980-81 1990-91 2000-01 2009-10 Source: Economic Surveyof Karnataka 2010-11 Page 6

Railways: expanding 3,250 kms of rail track with increasing investments Investment Opportunity by 2020 Target density 32 km per 1000 square km Capacity addition 2,890 km Projects entrusted with Karnataka Rail Infrastructure Development Corporation (K-RIDE) GoK will provide land free of cost GoK will share 50% of the project cost Investment opportunity Karnataka: Targeted to become amongst India s highest density states for rail connectivity after completion of ongoing and priority projects 40 35 30 25 20 15 10 5 0 22 Andhra Pradesh US$ 4,583-million Rail Density (length per 1,000 sq. km area) 28 16.9 32 37 Gujarat Karnataka Kerala Maharashtra Tamil Nadu Existing Projected Key investment opportunities: PPP-based projects for expansion of railway connectivity within state Improve rail connectivity with ports High speed train to Bangalore International Airport 134 kms in Mass Rapid Transit System with investment potential of US$ 5,625-million 20 34 Ongoing projects: As part of State s expansion of railway network by over 2,500 km, 394 km of new lines constructed in PPP mode with investments of US$ 843-million Source: Railway Infrastructure Plan, February 2011, IDD, Government of Karnataka Regional Rail connectivity between major industrial centers to ports, ICDs, etc. Extensive connectivity: Konkan Railway, National Highways 17 and 206 connecting Shimoga and Bangalore; with Hubli-Ankola railway, will be able to offer least-cost rail freight advantage to IMPEX trade from Bellary/Hospet region. Rail coach factory at Kolar Udupi-Mangalore Mass Rapid System Under Implementation Length (in km) Costs New Lines 2,051 US$ 3,486-million Gauge Conversions 90 US$ 75-million Doubling 652 US$ 679-million Electrification 140 US$ 30-million Total 2,933 US$ 4,639-million Page 7

Logistics: capitalizing on state s growing transport infrastructure Investment focus: Road and rail infrastructure, and growth in presence of third- and fourth-party logistics providers Logistics Park in Bangalore: Investment need of US$ 22.9-million Harihar 90 km from Shimoga / close to Davanagere maize, cotton growing belt, arecanut, coconut, etc. Belgaum sugar belt Koppal / Bagalkot maize, sugar, cotton Raichur rice and tur growing belt Kolar food park already exists Bidadi auto industry On NH 4 (near Chitradurga / Davanagere) Container terminals and coastal shipping Warehousing facilities and Free-trade warehousing zones New alignment for Hassan Mangalore Rail for evacuation of coal Truck terminals for bulk transportation in Koppal, Hassan, Tumkur Cold chain storage facilities Rail freight industry earned revenue of US$ 7.29-billion, growing annually at 10% Rail Freight (million tinnes) 680 660 640 620 600 580 560 540 520 500 557 CAGR 9.43% 602 667 2004 2005 2006 Nine transshipment centers Bangalore International Airport, Devanahalli Inland Container Depot Bangalore 2 Container Freight Stations, Bangalore New Mangalore Port, Mangalore Karwar Port Belekeri Port Container Freight Station, Mangalore Container Freight Station, Belgaum Roads carry approximately 70% of the freight in the state Ports can handle 62-million MT of cargo annually New Mangalore Port Trust: 38-million MT Karwar Port: 15-million MT Other ports: 9-million MT Green field multicommodity ports at Haldipur and Tadri will handle total capacity of 52-million MT Road freight industry in India is growing atannual rate of 6-8% per year Road Freight (US$ billion) 30 25 20 15 10 5 0 12.71 CAGR 55.8% 17.50 30.83 1995 2000 2005 Source: Infrastructure Development Department Page 8

Logistics: capitalizing on state s growing transport infrastructure Karnataka has nine transshipment centers catering to the imports and exports of the state. Four of these centers are located in Bangalore Development in Karnataka s logistic infrastructure targeted at paralleling growth of national logistic infrastructure and harness increasing opportunities in sector Imports / exports from Karnataka mainly take place through the four centers NMPT, Karwar, BIAL and the dry port at Bangalore (ICD). The CFS at Mangalore handles negligible cargo while the CFS at Belgaum is utilized to 80% of its capacity. The CFS at Bangalore is fully utilized. Another CFS is also operation at the old HAL airport of Bangalore by the Joint Working Group (JWG) and MSIL. Transshipment centers in Karnataka Page 9

Policies: create enabling environment for facilitating investment opportunities Active Infrastructure policy 2007 Provides a framework for clearing projects up to US$ 10-million through State-level Single Window Agency and for projects above US$ 10-million through State High Level Committee Separate 'Infrastructure Development Fund'to meet the infrastructure needs of industry State Industrial Policy 2009-14 4 industrial zones in Suvarna Karnataka Development Corridor Land assistance: Acquisition of 3000 acres in each District Infrastructure development through investments in power, roads, water etc. Draft Karnataka Infrastructure Development and Regulation Bill Karnataka Infrastructure Authority with Chief Secretary as Chairperson to review and approve PPP-based projects Karnataka Viability Gap Fund to meet funding requirements of projects approved by Authority. Public Private Partnerships in 10 sectors and 34 subsectors Roads Public Private Partnerships for construction of roads Ports Improvement of Minor Ports Port expansion Construction of green field ports Airports Modernization and upgradation of airports Connectivity Enable rail and port connectivity Joint ventures (JVs) and strategic alliances for linking industrial centers/ areas/ parks to railheads and ports Page 10

Project propositions Proposition Investment Potential Line Department Airports/ Avaiation/ Aerospace 8 low-cost regional airports Shimoga 111.00 Gulbarga 111.00 Bijapur 565.80 Bellary 114.04 Hassan (Phase 1) 600.00 IDD Mysore 41.80 Hubli (Expansion) 150.00 Belgaum (Expansion) 150.00 4 airstrips in different parts of the state IDD Raichur 34.38 Chikmagalur 19.68 Gadag 36.63 IDD Bagalkot 45.01 Modernisation of Mangalore International Ariport Expansion capacity of BIAL (Terminal II and 2nd Runway) 1,479.00 Development of 300 acre land near BIAL under KIISDC (Aeropolis) Ports Expansion or development of Ports KSIIDC/BIAL Karwar 6,000.00 New Mangalore 15,000.00 IDD Greenfield Ports Tidadi with capacity of 114-million MT by 2027 (two phases) 3,800.00 Haldipur with capacity of 19-million MT by 2014 1,700.00 Upgradation of Minor Ports Minor ports along Arabian coast, including LNG Terminal 4,000.00 IDD Dredging Capital and Maintenance Dredging at all the existing and Proposed Ports Investment Potential in Rs. Cr 275.75 Page 11

Project propositions Proposition Investment Potential Line Department Logistics Park, Transport Nagars, etc Development of FTWZs 3,137.50 IDD Logistic parks in 6 locations Transport Nagar at major Industrial Centers 2,255.00 Transhipment Facilities NMPT Karwar Warehousing (for bulk, cold storage, etc) 4,287.50 Marine Food Logistics Parks Mangalore (3 acre) 82.70 Malpe (2.7 acre) 67.21 Gangolli (1.6 acre) 39.98 Honnavar(1.2 acre) 36.46 Bharkal (1.1 acre) 35.79 Intermodal Transit Hub Mysore Road 132.50 Yeshwanthpur 44.65 Peenya 136.98 Yelahanka 275.00 Vijayanagar Area Development Authority (VADA) Belgaum (Expansion) Hibli-Dharwad 445.00 Mysore Bangalore Water Transport Total Investment Envisaged for Transport Infrastructure 45,210.36 Investment Potential in Rs. Cr Page 12

Contacts Secretary to Government of Karnataka Infrastructure Development Department Room No. 28, Vikasa Soudha Bangalore-560001 Ph: 91-80-22282366, 080-22035085 Fax: 91-80-22280605 E-mail : prs-infra@karnataka.gov.in Visit us at: www.idd.kar.nic.in Director PPP Cell Infrastructure Development Department Room No. 8, Vikasa Soudha Bangalore-560 001 Ph: 91-80-2203 4080 Fax: 91-80-22281123 E-mail : director.idd@gmail.com Visit us at: www.idd.kar.nic.in Principal Secretary to Government of Karnataka Commerce & Industries Department # 106, 1st Floor, Vikasa Soudha Dr. Ambedkar Veedhi, Bangalore 560 001, India. Email : prs_ci@karnataka.gov.in Visit us at : www.karnatakaindustry.gov.in Commissioner for Industrial Development and Director of Industries & Commerce 2nd Floor, Khanija Bhavan No.49, Race Course Road, Bangalore 560 001 Email : commissioner@karnatakaindustry.gov.in Visit us at : www.karnatakaindustry.gov.in Managing Director, Karnataka Udyog Mitra 3rd Floor, Khanija Bhavan (South Wing), No.49, Race Course Road, Bangalore 560 001 Ph : 91-80-2228 2392, 2228 5659; 2238 1232 Fax : 91-80-2226 6063 Email : md@kumbangalore.com Visit us at : www.kumbangalore.com Page 13