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Its
application to the State forest department for its clearance
to the project had also been made. Essentially a dredging canal
project with its canal alignment in two legs running along the
Tuticorin Port (in Gulf of Mannar) and Point Calimere (in Bay
of Bengal) cutting through Adam's Bridge, the proposed Sethusamudram
project would have 56 km water length - 20-km at Adam's Bridge
area and 36-km in the Palk Bay leg - and the width of the water
way would be at 300 metre and its depth at 12 metre. The project
is estimated to cost Rs 2,000 crore. It is not clear whether
the project would be done through the private sector `built-own-operate-transfer'
(BOOT) route. In the coming days, this would become clear. L&T
Ramboll Consulting Engineers will prepare a detailed project
report (DPR) on the Sethusamudram Ship Canal project. The company
started its work in August and is expected to give the DPR by
November end. L&T-Ramboll is an independent engineering
consultancy firm, formed by Larsen & Toubro Ltd., Ramboll
(Denmark) and IFU (the Danish Industrialization Fund for Developing
Countries). Although a broad outlay of the ship canal project
was earlier done by NEERI (National Environmental Engineering
Research Institute), Nagpur, the DPR to be submitted by L&T
Ramboll would provide the exact details of various requirements,
including design and alignment of the canal, shore facilities
required and infrastructure. The cost for preparing the DPR
would be Rs 23 lakh. As part of the DPR, three additional surveys
would also be undertaken. (i) A hydrographic study by NIOT (National
Institute of Ocean Technology) would be done to understand the
sea characteristics and its depth. The study would also revalidate
NIOT's earlier study that was done up to 500 mtrs. The DPR consultant
wanted the new study to be done up to one km. (ii) A new study
would also be done to estimate the quantity of maintenance dredging
to be done in the canal. This is to revalidate the earlier study
done by NEERI, and would be done using radioactive isotopes
by Baba Atomic Research Centre. (iii) There will also be a new
study on ship maneuvering behaviour in the ship canal using
mathematical modeling. A limited tender would be called for
to do the study. The argument for repeating some of the studies
is that with such a huge ship canal project, we should not take
any chance. Hence, there is a need to revalidate the earlier
studies. The new studies would cost about Rs 70 lakh. This cost
of preparing a detailed project report is a meager amount as
against the estimate project
cost which is between Rs 1,600 crore and Rs 2,000 crore.
It
proposes to create a ship canal to suit different drafts through
dredging in Adam's Bridge and Palk Strait.
The proposed navigation route will originate from Tuticorin
in the Gulf of Mannar and pass through the canal created in
Adam's Bridge within the international boundary. This would
save time and distance for ships, which otherwise had to travel
around the peninsula. The special purpose vehicle (SPV) to implement
the Sethusamudram ship canal project will have an appraised
capital of Rs 1,000 crore. Profit-making port trusts on the
East Coast, including Chennai, Tuticorin, Paradip, Visakhapatnam,
and Ennore participate in the SPV through equity. The name of
SPV is "Sethusamudaram Ship Canal Project Corporation Ltd".
It is to be under the public sector and was to be registered
in September. The first meeting of this SPV was held two months
back (early September 2004) in Madurai. It will raise funds
for the project through loans from domestic and international
institutions. Estimated to cost Rs 2,000 crore, the equity component
of Rs 800 crore will be contributed by the promoters, namely
TPT, Chennai Port Trust, Ennore Port Ltd, Visakapatnam Port
Trust, Paradeep Port Trust, Shipping Corporation of India (SCI)
and the Dredging Corporation of India (DCI).
In
its first meeting, the SPV decided that TPT and SCI will be
contributing Rs 50 crore each and the rest will be contributing
Rs 30 crore each. Thus, a total of 250 crores would be initially
contributed by the five Port Trusts in SPV, Shipping Corporation
of India, and the Dredging Corporation of India. The public
sector will hold 51 per cent of the equity and the rest would
be from the private sector. The debt component will be Rs 1,200
crore. Grant from the union Government would also be obtained.
Thus, The Centre plays a role in the funding through mix of
equity and debt-guarantee. The formation of the SPV will be placed before the Cabinet for its approval. The
public investment board (PIB) will also be approached for its
permission. The information released to public knowledge is
that in the 152 km project, dredging will be done for 78 km
while the rest of the distance has necessary draught. Totally,
77 million cubic metre needs to be dredged. It was decided in
the first meeting
of SPV that the draught would be effected up to a depth of 10.7
metres, as going beyond that would entail environmental considerations.
Out of this, 10 million cubic metre of dredged soil will be
used to refurbish 750 hectares of land. This way, the lost land
in Danushkodi will also be rehabilitated. All formalities for
the inauguration of the project will be completed by the end
of this year. The Sethusamudram Ship Canal Project is likely
to be inaugurated by January 1, and the first ship would pass
through the new canal in about 18 months thereafter. It is expected
that once the project implementation was finalized, it should
take minimum three to four years for the entire project to get
completed. The project is expected to generate surplus from
the 19th year of operation. There will be a saving Rs 105 crore
annually.
