DPR Amp Final 1

Detailed Project Report Apparel Manufacturing Park at Bhadrak
Abbreviation Expansion
APES Apparel Parks for Exports Scheme
ATDC Apparel Training and Design Centres
BOQs Bill of Quantities
CAGR Compound Annual Growth Rate
CCEA Cabinet Committee on Economic Affairs
CCI Cotton Corporation of India Limited
DPR Detail Project Report
ELSR Elevated Level Service Reservoir
EPCs Export Promotion Councils
GDP Gross Domestic Product
GLSR Ground Level Service Reservoir
GoI Government of India
IDCO Industrial Infrastructure Development Corporation Limited
IIP Index of Industrial Production
IL&FS Infrastructure Leasing & Financial Services Limited
IR Interest Reimbursement
MFA Multi-Fibre Agreement
MMS Margin Money Subsidy
MoT Ministry of Textiles
MSME Micro, Small and Medium Enterprises
NCUTE National Centre for Up gradation of Textile Education
NER North East Region
NIFT National Institute of Fashion Technology
O&M Operation and Maintenance
PMC Project Management Consultant
PPP Public Private Partnership
PSC Power loom Service Centre
RR-TUFS Revised Restructured Technology Upgradation Fund Scheme
RTUFS Restructured Technology Upgradation Fund Scheme
SITP Scheme for Integrated Textile Park
SoR Schedule of Rates
SPV Special Purpose Vehicle
TCIDS Textile Centre Infrastructure Development Scheme
TMC Technology Mission on Cotton
TRA Trust & Retention Account
TUFS Technology Upgradation Fund Scheme
VFY Viscose Filament Yarn
VSF Viscose Staple Fibre
WTO World Trade Organization
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Table of Content
I. Project Profile ....................................................................................................................... 7
1.1 Project Objectives ....................................................................................................... 7
1.2 Project Background ..................................................................................................... 7
1.3 Project Rationale ......................................................................................................... 8
1.4 Proposed Project.......................................................................................................... 8
1.5 Project Location .......................................................................................................... 9
1.6 Project Domicile........................................................................................................ 11
1.7 Project Land .............................................................................................................. 11
1.8 Project Sponsors ........................................................................................................ 11
1.9 Board of Directors ..................................................................................................... 11
II. Proposed Business Profile of the Park................................................................................... 12
2.1 Project Component .................................................................................................... 12
2.2 Proposed Facility ....................................................................................................... 12
2.3 Equipment in a Typical Garmenting Unit ................................................................. 12
2.4 Typical Production Process ....................................................................................... 13
2.5 Sourcing of Raw Materials........................................................................................ 14
III. Market Study and Demand Assessment................................................................................. 15
3.1 The Textile and Apparel Industry – Global Perspective ........................................... 15
3.2 The Textile and Apparel Industry – Indian Perspective............................................ 18
3.3 Segment Analysis ...................................................................................................... 20
IV. Policy Support and Incentives .............................................................................................. 25
4.1 Government Initiative ............................................................................................... 25
4.2 National Textile Policy.............................................................................................. 26
4.3 Scheme for Integrated Textile Park (SITP) ............................................................... 28
4.4 State Initiative – Government of Odisha................................................................... 30
4.5 Technology Up-Gradation Fund Scheme (TUFS) .................................................... 33
4.6 Technology Mission on Cotton (TMC)..................................................................... 36
4.7 De-Reservation from SSI .......................................................................................... 37
4.8 Fiscal Policy Rationalization..................................................................................... 38
4.9 Support Services........................................................................................................ 38
4.10 Conclusion ............................................................................................................. 39
V. Land and Site Analysis ........................................................................................................ 40
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5.1 Site Location and Connectivity ................................................................................. 40

5.2 Land Ownership ........................................................................................................ 42
5.3 Climatic Meteorological Conditions ......................................................................... 42
5.4 Topography and Ground Profile ............................................................................... 42
5.5 Current Status of Available Infrastructure ................................................................ 42
5.6 Factor Condition in Odisha for development of Apparel Manufacturing Park ......... 43
VI. Proposed Master Plan for the Park ........................................................................................ 46
6.1 Planning Concept ...................................................................................................... 46
6.2 Master Plan................................................................................................................ 46
6.3 Land Use Plan ........................................................................................................... 47
6.4 Development Guidelines ........................................................................................... 47
VII. Proposed Common Infrastructure ......................................................................................... 50
7.1 Site Development and Road Network ....................................................................... 50
7.2 Storm Water Drainage............................................................................................... 55
7.3 Water Supply System ................................................................................................ 59
7.4 Sewerage Collection and Treatment System............................................................. 63
7.5 Power Transmission and Distribution ....................................................................... 67
7.6 Landscaping .............................................................................................................. 69
VIII.Proposed Amenities............................................................................................................. 70
8.1 Planning Concept ...................................................................................................... 70
8.2 Spatial Requirements and Areas ............................................................................... 70
8.3 Common Amenities................................................................................................... 71
8.4 Aggregate Cost of Infrastructure ............................................................................... 71
IX. Proposed Industrial Plot ....................................................................................................... 72
9.1 Key Feature of Plot and Layout ................................................................................ 72
9.2 Industrial Unit ........................................................................................................... 72
X. Project Cost and Means of Finance ....................................................................................... 73
10.1 Estimated Project Cost........................................................................................... 73
10.2 Proposed Means of Finance ................................................................................... 73
XI. Financial Appraisal of the Project ......................................................................................... 75
11.1 Appraisal Framework and Objective ..................................................................... 75
11.2 Key Operational and Financial Assessment of the SPV........................................ 75
11.3 Financial Projections ............................................................................................. 78
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XII. Project Implementation Schedule ......................................................................................... 82

12.1 Role of Promoter – IDCO ...................................................................................... 82
12.2 Role of Special Purpose Vehicle (SPV) ................................................................ 82
12.3 Role of Project Management Consultant ............................................................... 83
12.4 Proposed Implementation Schedule ...................................................................... 86
XIII.Risk Analysis and Mitigation Framework ............................................................................. 88
13.1 Project Development and Construction Risk......................................................... 88
13.2 Operation Phase Risk............................................................................................. 90
XIV. Economic Benefits of the Project .................................................................................. 93
14.1 Projected Social and Economic Impact of the Project........................................... 94
14.2 Benefits to the Industry.......................................................................................... 95
14.3 Creation of Direct and Indirect Jobs ...................................................................... 95
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List of Tables
Table 2- 1: Proposed List of Equipment ....................................................................................... 13

Table 3- 1: World Cotton Supply (Million Metric Tons)................................................................ 16
Table 3- 2: World Cotton Imports (Million Metric Tons)............................................................... 16
Table 3- 3: World Cotton Exports (Million Metric Tons)............................................................... 17
Table 3- 4: Yarn Production in India ............................................................................................ 21
Table 3- 5: Fabric Production in India .......................................................................................... 22
Table 3- 6: Fabric Production by the Power Loom Sector .............................................................. 22
Table 4- 1: State Wise Number of SITP Approved Parks ............................................................... 29
Table 4- 2: State Wise Number of SITP Approved Parks ............................................................... 30
Table 6- 1: Proposed Infrastructure Components........................................................................... 47
Table 6- 2: Proposed Land Use Distribution ................................................................................. 47
Table 7- 1: Estimated Cost of Site Development ........................................................................... 50
Table 7- 2: Features of Internal Road ........................................................................................... 51
Table 7- 3: Thickness of Pavement Layers ................................................................................... 51
Table 7- 4: Cost Estimate for Road Network................................................................................. 55
Table 7- 5: Cost of Storm Drainage Works ................................................................................... 59
Table 7-6: Summary of Water Supply System......................................................................................61
Table 7-7: Estimated Cost of Water Supply......................................................................................... 63
Table 7- 6: Details of Inspection Chambers / Manholes ................................................................. 64
Table 7- 7: Estimated Cost of Water Supply ................................................................................. 63
Table 7-8: Details of Inspection Chamber / Manhole ..................................................................... 64
Table 7- 9: Estimated Cost of Sewerage Collection System ........................................................... 66
Table 7-10: Estimated Cost of Water Supply
Network........................................................................Error! Bookmark not defined.
Table 8- 1: Estimated Cost of Common Amenties ......................................................................... 70
Table 8-2: Block Cost Estimate for Infrastructure ......................................................................... 70
Table 9-1: Built- Up Area for Industrial Unit ................................................................................ 71
Table 10-1: Total Project Cost ..................................................................................................... 88
Table 10- 2: Means of Financing ................................................................................................. 73
Table 11-1: Charges- Common Facilities..............................................................................................75
Table 11-2: Utility Charges............................................................................................... ....................75
Table 11-3: Employee Cost...................................................................................................................76
Table 11-4: Depreciation ............................................................................................................. .........76
Table 11-5: Profitability Statement........................................................................................................78
Table 11-6: Cash Flow Statement....................................................................................................... .. 79
Table 11-7: Balance Sheet.....................................................................................................................80
Table 11-8: Key Financial Indicator................................................................................................... ...81
Table 13-1: Project Development and Construction Risk & Management Framework........................87
Table 13-2: Operation Phase Risk and Mitigation Framework.............................................................91
Table 14-1: Employment Generation.....................................................................................................96
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List of Figures
Figure 1- 1: Location of the Proposed Park................................................................................... 10
Figure 2- 1: Proposed Departments in the Park ............................................................................. 12
Figure 2- 2: Proposed Production Process..................................................................................... 14
Figure 2- 3: Sourcing of Raw Materials ........................................................................................ 14
Figure 3- 1: Global Textile & Apparel Trade (USD Billion) .......................................................... 15
Figure 3- 2: Ratio of Global Textile Production ............................................................................ 16
Figure 3- 3: Current Size of Indian Textile and Apparel Market ..................................................... 18
Figure 3- 4: Indian Textile & Apparel Market............................................................................... 19
Figure 3- 5: Value Addition Across Textile Value Chain ............................................................... 20
Figure 3- 6: Textile Sector – High Level Value Chain ................................................................... 20
Figure 5- 1: Proposed Site ........................................................................................................... 41
Figure 5- 2: Sea Port Connectivity ............................................................................................... 42
Figure 5- 3: Site Image................................................................................................................ 42
Figure 5- 4: Comparative Statistics for Wage Rate per Day ........................................................... 43
Figure 5- 5: Power Scenario in Odisha ...........................................................................................45
Figure 5- 6: Comparative Statistics for Power Cost..............................................................................45
Figure 6-1: Master Plan (Lay out) of the Park.......................................................................................50
Figure 7-1: Lay out Plan- Roads...........................................................................................................53
Figure 7-2: Road Cross Section Model..................................................................................................54
Figure 7-3: Lay-out Plan- Storm Water Drains.....................................................................................57
Figure 7-4: SWD- Section Model..........................................................................................................58
Figure 7-5: Water Distribution Network................................................................................................62
Figure 7-6: Effluent Plots to ETP Model ..............................................................................................65
Figure 7-7: Treated Water Model..........................................................................................................66
Figure 7-8: Electrical Distribution Network..........................................................................................68
Figure 12- 1: Proposed Organisation Structure of the SPV............................................................. 82

Figure 12- 2: Proposed Implementation Schedule ......................................................................... 86
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I. P ROJECT P ROFILE
1.1 PROJECT OBJECTIVES

(1) The objective of the Project is to promote the growth of garment, hosiery and
apparel industry in the state. For this, Odisha Industrial Infrastructural
Development Corporation (IDCO) intends to set up an Apparel Manufacturing
Park in Bhadrak district, Odisha, under the “Scheme for Integrated Textile
Park” (SITP) of Ministry of Textiles (MoT), Government of India (GoI)
(2) The Project envisages for development and establishment of composite facility
for garment / apparel manufacturing units catering to both domestic and export
markets
1.2 PROJECT BACKGROUND

(1) Indian textile industry is one of the leading textile industries in the world and
has overwhelming presence in the economic life of the country. It plays
significant role in the economic growth of the country through its contribution
to industrial production, employment generatio n and foreign exchange
earnings
(2) The sector contributes about 12% to industrial production, 4% to the gross
domestic product (GDP), and 10.5% to the country’s export earnings. Being
the second largest employer after agriculture, provides employment to more
than 35 million people of the country. In addition, the industry generates
significant employment through forward and backward linkages, both in
traditional (production of cotton and other natural fibres) and modern activities
(textile design, etc.)
(3) India has the potential to increase its textile and apparel share in the world
trade from the current level of 4.2% in 2012-13 to 8% and reach US$ 80
billion by 2020
(4) The greatest value addition in the textile chain is generated in the apparel
segment which is a final stage of the textile value chain. A well-defined
strategy will enable India’s textile industry to shift focus to value added
products. It is a low investment and high labor intensive industry. Hence, one
of the key determining factors for ensuring the competitiveness of the industry
is the availability of skilled manpower at reasonable wages
(5) In India the apparel industry is concentrated primarily in eight clusters based
on the availability of raw materials: Tirupur, Ludhiana, Bengaluru, Delhi/
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Noida/ Gurgaon, Mumbai, Kolkata, Jaipur and Indore. While Tirupur,

Ludhiana and Kolkata are major centres known for knitwear; Bengaluru,
Delhi/ Noida/ Gurgaon, Mumbai, Jaipur and Indore are major hubs for woven
garments
(6) Bhadrak district is at a distance of 125 kms from the state capital
Bhubaneswar. The district has an area of 2505 square km with a population of
15.06 lakh. It has a rich endowment of cultural heritage of historical
importance. There are many historical places and monuments for the tourist to
visit in the district. It is a home of FACOR, which is one of the largest
manufacturers of quality ferro chrome in the country. Dhamara is evolving as a
port based industrial region in the district and is being connected by railway
line with all important cities particularly Bhadrak town. Due to its proximity to
the Project site, it may serve as an important transit port for an upcoming Park
1.3 PROJECT RATIONALE
(1) The textile sector offers good prospects for the economy and being a labour
intensive industry, it provides huge employment opportunity to the people.
The same is expected with the development of the proposed Park in Bhadrak.
It is believed that the project of this magnitude would have huge impact on
state economy as far as employment generation is concerned
(2) It is encouraging facts for the state that the significant portion of the workforce
engaged in Textile and Apparel industry in India, originates from Odisha.
However, these valuable work forces are not being fully utilized in the
absence textile industry in the state. As a result, the workers including
skilled/semi-skilled and unskilled have been migrating to other state in search
of employment. As per Census 2011, around 6,62,800 people were estimated
as a migrants to other cities
(3) There are around 200 training institute in Odisha and on an average one lakh
people are getting trained every year in Apparel sector. However, they have to
migrate to other state in search of work. The training and placement statistics
indicates that around 134000 skilled workers have been migrated to other state
for employment in the last five years
(4) Based on the above facts, there is a need to promote investment in sectors like
textile which have a huge potential for employment. This will cater
particularly to those who are getting trained under skills enhancement
program. The development of Apparel Park would be in the same line making
sustainable employment along with regional development of Odisha. By this
the government should be in position to check migration and further link the
institutions running skill enhancement program with the industry for
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placement of jobs. In these efforts, it is also possible for the government to

win back those talents to the state who have migrated. The state has around 26
million people in the age group of 15 to 60 from among which many can be
profitably engaged in the sector
(5) This proposal shall also complement the state initiative where the Government
of Odisha is trying to attract large investment in the non- mineral based sector
and trying to give special focus on segments like agro-processing, automobile,
auto-components, textile, apparel and ancillary and downstream industries
1.4 PROPOSED PROJECT
(1) The Project is conceived and proposed to be developed by IDCO. For this,
Special Purpose Vehicle (SPV), with the participation of local industry will be
created and registered as Private Limited Company under Indian Companies
Act 1956
(2) IDCO specializes in developing industrial infrastructure for various sectors as

garmenting activity is a key activity within the textile value chain. IDCO
proposes to set up this facility for garment manufacturing units to meet the
international environmental and social standards
1.5 PROJECT LOCATION

(1) The location of the proposed Park is Dhamnagar in Bhadrak district in the state
of Odisha. The Project would be located on a 100 acres of land falling under
the village limit of Helapur, Panimahura and Majurigria inBhandaripokhari
block of Bhadrak district
(2) The entire area is almost a flat ground but undulating only near NH-5, which is
abutting to the south of the site. The location of the Park is presented in Figure
1-1. The site has many advantages including good connectivity and proximity
to highways and rail sidings. The details of the proposed site together with the
location advantage are presented in Chapter 5
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Figure 1- 1: Location of the Proposed Park
Proposed Project
Site
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1.6 PROJECT DOMICILE
(1) The proposed Textile Park is being promoted by Odisha Industrial

Infrastructure Development Corporation (IDCO) with allocation of land of 100
acres for the project. The implementation and manageme nt activities for the
proposed Park would be undertaken in the responsibility sphere of IDCO only
(2) IDCO shall consider equity participation from the individual manufacturing
units, who intend to set up their units in the said Park
1.7 PROJECT LAND
The Project site is located on the land falling under the village limit of Helap ur,
Panimahura and Majurigria of Bhandaripokhari block. Presently, the land is owned by
IDCO and shall be allotted to the SPV
1.8 PROJECT SPONSORS

IDCO shall be the sponsors of the project initially for developing the garment park.
Thereafter other members from the garmenting industries will be invited in the Park
for taking up an equity position as well as setting up respective industrial unit in the
park. The responsibility of the establishment of the Textile Park is entrusted with
IDCO which is a specialized State Government Corporation
1.9 BOARD OF DIRECTORS

The SPV shall have the Board of Directors as per the company law. To begin with
IDCO shall nominate two directors from Government of Odisha. Thereafter the
industry participant shall be coopted to the Board of Directors. The Board of Directors
shall also include two other directors from IDCO
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II. P ROPOSED B USINESS P ROFILE OF THE P ARK
2.1PROJECT COMPONENT
The units proposed to be located in the Park would have all the important facilities
and infrastructure required to manufacture a garment. The process would broadly
include design, cutting, stitching, ironing, labeling, packaging and dispatch. There
may be a certain value added activities like embroideries, and screen printing for
increasing the price yield from garment
2.2PROPOSED FACILITY
(1) The proposed park will house apparel manufacturing units that will be engaged
in manufacturing of apparel from stitching to packing
(2) A typical apparel manufacturing unit will have the following facilities:
(a) Fabric Storage

(b) Cutting Section
(c) Stitching Section / Embroidery Section
(d) Printing Section
(e) Sewing Section
(f) Washing Section
(g) Finishing & Packing Section
(h) Sampling Section
(i) Testing Lab
Figure 2- 1: Typical Section in Apparel Unit
2.3 EQUIPMENT IN A TYPICAL GARMENTING UNIT
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The details of the key equipments which are likely to be installed based on the
requirement of the entrepreneurs participating in the Park are as follows:
Table 2- 1 : Likely Equi pment
S No. Machine ry Type

Stitching Machines, Lock Machines, Over Lock
1 Machines, Flat Lock Machines and Chain Stitch
Machines
2 Iron Boxes with table
3 Thread Sucking & Needle Detector Machines
4 Cutting Machines with table
5 Pattern Sewing & Collar turning machines
6 Button Holing Machines
7 Button Stitching Machines
8 Bartack& snap attach Machines
9 Smocking & Shirring Machines
10 Strapping & Stain removing Machines
2.4 TYPICAL PRODUCTION PROCESS

The proposed production process is elaborated below:
(1) Pre-Production Process
Different patterns for small, medium, larger and extra larger size of garment
are planned at first. The patterns are then marked on a sheet of paper by the
marker. The fabric is then taken from the store and spread on the cutting table
in lay form. By using the marked patterns, marking is done on the fabric. The
fabric is thus cut as per the marked pattern. The cut pieces are converted into
bundle and ticketing is done for further identification. Embroidery or printing
is required to be done; it will be done at this stage
(2) Production Process
The production process in sewing entails stitching of different parts of the

garment to make it the final product, as per design
(3) Post Production Process
The stitched garments undergo washing and drying, if required, as per the
buyer’s specification. Any left out or loose sewing threads are trimmed. The
product would thereafter pass through quality control and hand tagged. The
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garments are then pressed and are ready for folding and packing. The packed
garments will be shipped thereafter
Figure 2- 2: Proposed Production Process
2.5 SOURCING OF RAW MATERIALS
The major raw material to be used is knitted fabrics, which would mainly be sourced
from Karnataka, Gujarat, Andhra Pradesh and Tamil Nadu
Figure 2- 3: Sourcing of Raw Materials
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III. MAR KET S TUDY AND D EMAND A SSESSMENT
3.1THE TEXTILE AND APPAREL INDUSTRY – GLOBAL PERSPECTIVE

(1) The global textile and garment industry encompassing textile, clothing,
footwear and luxury fashion is currently worth nearly US$ 3000trillion. The
global fashion apparel industry has surpassed the market size of US $ 1 trillion
since 2013, now it represent nearly 2% of world GDP, and almost 75% of
world fashion market is concentrated in Europe, USA, China and Japan
(2) The apparel, luxury goods and accessories portion of the market, which
accounts for over 55% of the overall market, is expected to generate US $
3,180 billion in 2015, with yearly growth rate in excess of 4%
(3) The world trade in the textile and clothing sector is currently estimated at US$
706 billion in 2011-12 and is expected to grow to US$ 950 billion by 2013-14.
The bulk of the increase is expected to be in clothing, which is projected to
grow from US$ 412.5 billion to about US$ 600 billion, where as textile trade
is projected to grow from US$ 293.6 billion to about US$ 350 billion
Figure 3- 1: Gl obal Textile & Apparel Trade (USD Billion)
Source: WTO, UN Comtrade
(4) The manufacture of textile can be divided into three segments: Apparel, Home
textile and Industrial/ Technical Textile. The ratio of Global textile production
of these segments has been shown in the following chart:
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Figure 3- 2: Ratio of Gl obal Textile Producti on
Table 3- 1 : Worl d Cotton Suppl y (Million Metric Tons)
2015-16 2015-16
Country / Year 2011-12 2012-13 2013-14 2014-15
(June ) (July)
China 7.4 7.6 7.1 6.5 5.9 5.9
India 6.3 6.2 6.7 6.4 6.4 6.4
United States 3.4 3.8 2.8 3.6 3.2 3.2
Pakistan 2.3 2.0 2.1 2.3 2.2 2.2
Brazil 1.9 1.3 1.7 1.5 1.5 1.5
Uzbekistan 0.9 1.0 0.9 0.8 0.8 0.8
Australia 1.2 1.0 0.9 0.5 0.4 0.4
Others 4.5 4.8 4.7 4.9 4.5 4.5
World 27.8 26.9 26.2 25.9 24.2 24.3
Source: USDA
Table 3- 2 : Worl d Cotton Imports (Million Metric Tons)
2015-16 2015-16
Country / Year 2011-12 2012-13 2013-14 2014-15
(June ) (July)
China 5.3 4.4 3.1 1.8 1.3 1.3
Vietnam 0.4 0.5 0.7 1.0 0.9 1.1
Bangladesh 0.7 0.8 0.9 0.9 1.0 1.0
Turkey 0.5 0.8 0.9 0.8 0.8 0.8
Indonesia 0.5 0.7 0.7 0.7 0.8 0.8
Thailand 0.3 0.3 0.3 0.3 0.3 0.3
Pakistan 0.2 0.4 0.3 0.2 0.4 0.3
Others 2.1 2.4 2.1 2.2 2.1 2.1
World 9.9 10.1 8.7 7.5 7.4 7.4
Source: USDA
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Table 3- 3 : Worl d Cotton Exports (Million Metric Tons)
2015-16 2015-16
Country / Year 2011-12 2012-13 2013-14 2014-15
(June ) (July)
United States 2.6 2.8 2.3 2.4 2.3 2.4
India 2.4 1.7 2.0 0.9 1.1 1.0
Brazil 1.0 0.9 0.5 0.8 0.8 0.8
Uzbekistan 0.5 0.7 0.6 0.5 0.5 0.5
Australia 1.0 1.3 1.1 0.6 0.4 0.4
Burkina 0.1 0.3 0.3 0.3 0.3 0.3
Greece 0.2 0.2 0.3 0.3 0.2 0.2
Others 3.0 3.2 2.7 3.0 2.9 3.0
World 10.0 10.1 8.7 7.5 7.4 7.4
Source: USDA
(5) With the World Trade Organization (WTO) rep lacing the Multi-Fibre
Agreement (MFA), the global textile industry is slated to undergo major
structural changes. The globalization of the textile trade will increase sourcing
from developing countries owing to low labour costs and local availability of
raw material. Countries like China and India are likely to emerge as the largest
beneficiaries in the post quota regime
(6) Under the MFA regime, the world trade in textiles was restricted and the
developing countries were allowed to protect their domestic industry against
the competitive imports. With the removal of quotas, cost competitiveness and
quality are expected to be only two factors determining the success of a
country’s textile sector in the global market. While the new regime opens up
the market to fierce competition, it also provides opportunities to countries like
India, which have a natural competitive edge on account of availability of raw
material, cost-effective labour and healthy domestic market
(7) India’s position in the global market is characte rized by the following
attributes (As per CITI, 2012-13):
(a) Largest producer of jute

(b) 2nd largest producer of silk
(c) 2nd largest producer of cotton
(d) 2nd largest producer of cellulosic fiber / yarn
(e) 2ndlargest producer of synthetic fibers / yarn
(8) Interest in India has intensified after the removal of MFA quota constraints.
Large global retailers, such as Wal-Mart, J.C Penney, Gap, Ikea (Sweden),
Cades (France), OTTO (Germany), and branded marketers, such as Calvin
Klein, Lacoste and Sara Lee, are attracted to India because of its potential to
provide one-stop shopping
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3.2 THE TEXTILE AND APPAREL INDUSTRY – INDIAN PERSPECTIVE
(1) The Indian textile and apparel industry is one of the oldest and most significant
industries in the country and one of the largest in the world. Apart from China,
no other country can match the size, spread, depth, and competitiveness of the
Indian textile and apparel industry. Moreover, the global elimination of quotas
at the end of 2004 has greatly enhanced the opportunities for India to showcase
its inherent strength and become a top sourcing and investment destination
(2) Today the industry contributes around 12% to industrial production in the
country, 4% to the GDP, is estimated to directly employ over 35 Million
people apart from the indirect employment to 45 Million in allied sectors, thus
making it the second largest employer after agriculture. It accounts for about
10.5% to the country’s exports, and is, in sum, an important economic engine
for the nation
(3) As per CITI report 2012-13, the size of Indian textile and apparel market is
US$ 85 billion of which US$ 34 Billion is exports while the rest US$ 51
Billion is the domestic market. According to the CITI, Indian Textile and
Apparel Industry is estimated to reach US $ 120 billion Mark by 2015 and US
$ 200 billion by 2020
(4) According to the latest statistics by AEPC, India’s textile exports have reached
US$ 20 billion and US$ 14 billion of Garment exports in 2012-2013. With the
revival of demand in western markets, India’s textile exports may grow up to
US$ 24 billion in 2015-16 with the support of the government
(5) A number of factors are expected to fuel the growth of the domestic market in
spite of the many challenges faced by this industry. Growth drivers include
increased incomes, high growth of GDP leading to rapid urbanization, growth
of organized retail with the entry of a large number of domestic and
international players, and a growing awareness of global trends along with the
need to look fashionable
Figure 3- 3: Current Size of Indian Textile and Apparel Market
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(6) The Indian domestic textiles and apparel market is one of the fastest growing
market in the world. It is expected to become one of the major consumption
bases in near future. Out of the total market size of US$ 51 Billion, clothing
contributes US$ 19 Billion, while the remaining US$ 32 Billion is contributed
by textiles (home textiles, technical textiles and other textiles end-uses)
Figure 3- 4: Indian Textile & Apparel Market
(7) With exports accounting for 40% of the total market size, the Indian Textile
and Apparel market has significance dependence on export market
(8) The domestic market has shown a significant growth in past few years
registering a CAGR of ~12%. Though men’s wear is the largest category with
a value of US$ 10.3 Billion, kid’s wear and women’s wear are the fastest
growing categories
(9) The textile industry plays a significant role in getting the foreign exchange
reserves into the country as it contributes to approximately 15% of the total
exports from the country. Exports in textiles and apparel have registered a
strong growth in last few years – 9.9% CAGR from 2005-06 to 2011-12
(10) As per the studies and estimates, the current domestic consumption is expected
to grow to ~US$ 200 Billion over the next 25 years (growing at 7% per
annum). India’s exports are expected to grow ~US$ 125 Billion from the
current level of US$ 22 Billion by 2035
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Figure 3- 5: Value Additi on Acr oss Textile Value Chain
3.3 SEGMENT ANALYSIS
India’s textile industry comprises mostly small-scale, non-integrated spinning,

weaving, finishing, and apparel- making enterprises. The figure below depicts the
overall value chain and the number and type of units within the industry
Figure 3- 6: Textile Sector – High Level Value Chain
Source – CITI, 2012-13
(1) Spinning Mills – Yarn Production
20
(a) With an installed capacity of 48 million spindles, India accounts for

about 22 per cent of the world’s spindle capacity. India’s spinning
sector consists of about 1,385 small-scale independent firms and 1,951
larger scale independent units. Independent spinning mills account for
about 75 per cent of capacity and 92 per cent of production
(b) The spinning industry is the most modern and internationally

competitive segment of India’s textile industry, producing yarn as
coarse as 6s to as superfine as 160s, both in singles and multiples
(c) Yarn production grew at from 3,460 million kgs in 2005-06 to 4,850
million kgs in 2012-13. In line with the trends in domestic demand, the
most rapid growth has been in the production of blended and 100%
manmade yarns
Table 3- 4 : Yarn Production in Indi a
Year Cotton Blended 100% man-made Total

2005-06 2,520 590 350 3,460
2006-07 2,824 635 355 3,813
2007-08 2,948 677 378 4,003
2008-09 2,898 655 359 3912
2009-10 3,079 707 407 4,193
2010-11 3,490 797 426 4,713
2011-12 3,126 789 457 4,372
2012-13 3,560 830 460 4,850
CAGR 4.4% 4.3% 3.4% 4.3%
Source: Textile Commissioner Office, Textile Committee
(2) Weaving / Knitting Units
(a) India’s weaving and knitting sector is highly fragmented, small-scale,

and labour- intensive. The woven fabric production industry can be
divided into three sectors: power loom, handloom and mill sector.
There are about 2.4 million handlooms, 2.3 million power looms, and
0.1 million looms in the organized sector. The decentralized power
loom sector accounts for 95 per cent of the total cloth production. The
knitted fabric forms 18 per cent of the total fabric production
(b) The weaving sector has witnessed a steady growth. The growth in
fabric output has been strong, with production increasing from 48,808
million square meters in 2005-06 to 60,700 million square meters in
2012-13 (a CAGR of 3.16%). The growth in blended and man- made
fabric production has been lower at 1.09% as compared to 5.09% for
cotton fabrics. Thus, the overall share of blended & man-made fabrics
21
in total fabric production decreased from 51% to 49%, as shown

below:
Table 3- 5 : Fabric Production in Indi a (in mn s q mt)
Year Cotton Blended & 100% man-made Total

2005-06 23,873 24,935 48,808
2006-07 26,225 26,464 52,689
2007-08 27,205 28,071 55,276
2008-09 26,898 28,068 54,966
2009-10 28,914 31,419 60,333
2010-11 31,718 30,043 61,761
2012-13 33,800 26,900 60,700
CAGR 5.09% 1.09% 3.16%
Source: Textile Commissioner
(c) In contrast to the spinning sector, the weaving industry remains highly
fragmented and small scale and characterized by the use of technology
ranging from handlooms, power looms, to state of the art looms. The
sector is dominated by the decentralized power loom sector that
accounts for 23 lakh power looms in the country (as on March 31,
2013), spread over 4.69 lakh units. The decentralized power loom
sector accounted for 61% of the total fabric production in the country
in 2008-09. The production of fabric by the decentralized power loom
sector in the last 6 years is given below:
Table 3- 6 : Fabric Production by the Power Loom Sector
Year Cotton Blended & 100% man-made Total

2005-06 8,821 21,805 30,626
2006-07 9,634 23,270 32,904
2007-08 9,923 24,802 34,725
2008-09 9,621 24,027 33,648
2009-10 10,200 26,400 36,600
2012-13 10,100 26,600 36,700
CAGR 2.23% 3.37% 3.06%
Source: Textile Commissioner
(d) The decentralized power loom sector provides employment to an

estimated 49.75 lakh people. It is estimated that more than 60% of the
cloth meant for export comes from the power loom sector. It, therefore,
requires special attention for encouraging the sector to adopt modern
technologies. It suffers from lack of awareness of programs, lack of
confidence in approaching lending agencies, unfamiliarity with
procedures, working capital constraints and obsolete technologies. The
22
modern shuttle less looms account for less than 2% of the total power
loom capacity in the country
(e) While India remains internationally competitive in the production and

export of low and medium quality “gray” (or unfinished) fabrics in
relatively small production runs, the current small-scale, non-
integrated, low-technology structure is ill-equipped to compete in high-
quality markets or to meet the needs of large buyers
(f) In recent years, progressive power loom operators have upgraded their
operations through investment in modern shuttle-less looms. The
shuttle less looms, 70% of which are imported into India as second-
hand equipment from the United States, Italy, and Japan, produce
superior-quality fabric and reduce labor costs by 75%, compared with
traditional shuttle looms. However, the power loom sector currently
has only about 35,000 shuttleless looms and 45,000 automatic looms
(g) The other segments constituting the weaving sector are the large mills,
handlooms and decentralized hosiery sector. The mill sector produced
about 2,800 million square meters of fabric in 2012-13 (4.61% of total
production), while handloom sector and decentralized hosiery sector
produced 6,900 million square meters (11.37%) and 14,300 million
square meters (23.56%) respectively
(3) Processing Units
(a) The processing industry is largely decentralized and marked by hand

processing units and independent processing units. Composite mill
sectors are very few falling into the organized category. Overall, about
5000 processors are operating in India
(b) Processing is the weakest link in India’s entire textile chain. Processing
can be carried out at any intermediate stage of manufacture namely,
after yarn formation, fabric formation or garment manufacture. As in
the weaving sector, small-scale, non- integrated firms in the
unorganized sector using outmoded technology carry out most of the
processing. While the current structure allows India to be competitive
in the production and export of “gray” fabrics and relatively small lots
of medium-quality finished textiles, the country has not been able to
capitalize on strong international demand for high-quality products as
well as in meeting the needs of large international buyers
(c) Tough environmental standards, in addition to the tax and power cost
benefits that small-scale finishers receive, have affected modernization
in the processing sector. Fabric finishing involves use of dyes and
23
chemicals that are hazardous pollutants unless properly treated. In

some areas, like Tamil Nadu, regulations that include zero or very low
emission tolerances discourage the entry of modern, large-scale firms
and boost incentives for finishers to remain in the unorganized sector
and consequently outside the regulatory net
(d) The processing industry is faced with many impediments mainly

emanating from poor financial health due to smaller size of the
processors. Other problems include difficulty in capital formation for
modernization of processes, non-availability of quality raw materials,
poor power supply and shortage of adequate water
(e) Several initiatives have already been taken by the government to

overcome some of these concerns through Technology Up-Gradation
through schemes like (TUFS), creation of common infrastructure like
effluent treatment plants, infrastructure up-gradation etc through
Scheme for Integrated Textile Park (SITP)
(4) Garment Manufacturing Units
(a) Small-scale fabricators dominate garment manufacturing. Most

garment manufacturing units fare reasonably well on the technology
count. The bulk of apparel is produced by about 100,000 small-scale
units classified as domestic manufacturers, manufacturer exporters,
and fabricators (subcontractors). The fragmented structure of the
industry provides the advantage of a large pool of skilled workers in
different areas of textile manufacturing, and also gives scope for entry
of organized integrated textile manufacturers. Small scale units in
different sectors can also be leveraged as a supply base for sourcing
materials at low cost
(b) Apart from these advantages, the industry has also been experiencing
consistent growth across different sectors, making it one of the key
potential sectors in India
24
IV. P OLICY S UPPORT AND INCENTIVES
4.1 GOVERNMENT INITIATIVE

The Government of India’s role in the textile industry has become more reformists in
nature. Initially, policies were drawn to provide employment with a clear focus on
promoting the small-scale industry. The scenario changed after 1995, with policies
being designed to encourage investments in installing modern weaving machinery as
well as gradually eliminating the pro-decentralized sector policy focus. The removal
of the SSI reservation for woven apparel in 2000 and knitted apparel in 2005 were
significant decisions in promoting setting up of large-scale firms
(1) Considering the immense contribution of the textile industry to Indian

economy and the potential it holds for expansion of employment opportunities
and export earnings, Government of India has been attaching highest
importance to the overall development of the sector
(2) Recognizing the state’s unique and exquisite creations of handicraft and textile
in all over the world Government of Odisha has accorded Textile as a priority
sector. The State wishes to develop a unique and international brand appeal for
the handicrafts and textile of Odisha
(3) Keeping the above point in view, the Odisha government is contemplating
formulation of an exclusive textile policy to encourage textile manufacturing
and exports, which have tremendous scope for growth and employment in the
current global scenario, in the state
(4) The Indian Government has come up with a number of export promotion
policies for textile sector. It has also allowed 100 per cent FDI in the textile
sector under the automatic route
(5) Some of initiatives taken by the government to further promote the industry
area as under:
(a) Duty free entitlement to garment exporters for import of trimmings,

embellishments and other specified items increased from 3 per cent to 5
per cent. This initiative is expected to generate an additional RMG
exports estimated at Rs 10,000 crore (US$ 1.61 billion)
(b) The government has also proposed to extend 24/7 customs clearance
facility at 13 airports and 14 sea ports resulting in faster clearance of
import and export cargo
25
(c) The proposal for imposing duty on branded items was dropped
providing relief to the entire value chain
(d) The Ministry of Textiles has approved a 'Scheme for promoting usage
of geotechnical textiles in North East Region (NER)' in order to
capitalise on the benefits of geotechnical textiles. The scheme has been
approved with a financial outlay of Rs 427 crore (US$ 69.12 million)
for five years from 2014-15
(e) The Ministry of Textiles, Government of India plans to enter into an

agreement with Flipkart to provide an online platform to handloom
weavers to sell their products
(f) The foundation stone of the Trade Facilitation Centre and Craft
Museum was laid by Prime Minister of India at Varanasi
(g) Detailed arrangement for purchase of cotton from the farmers by the
Cotton Corporation of India Limited (CCI) under the Minimum
Support Price Operation was monitored. 343 purchase centers were
finalized in consultation with the State Governments after meetings
with officers of CCI and the cotton producing states, resulting in
streamlining of operations
(6) The existing National Textile Policy 2000 was framed about 13 years ago and
since then the industry has undergone various changes on the domestic and
international fronts. The domestic textile industry has seen large scale
modernization and technological up-gradation in the last decade and faces new
challenges. In the international trade scenario, while the export quota regime
has been removed in 2004, recent trends in the global textile industry offer an
enormous opportunity to Indian Industry to enhance its share in world trade
with a supportive policy framework. Keeping this in view, the Government has
constituted an Expert Committee to review the National Textile Policy 2000
and formulate the National Textile Policy 2013
4.2 NATIONAL TEXTILE POLICY

(1) The new National Textile Policy 2013 seeks to introduce flexible labour laws,
create integrated textile parks, attract higher investments and generate more
jobs. The Expert Committee has set up a target of trebling the share of India in
world export of textiles & clothing
(2) Textile exports contribute more than 13 per cent to the country’s export. The
textile sector exported goods worth $ 41.57 billion in 2013-14. The target of
trebling the share of India in world exports of textiles & clothing would
26
require our export to grow at a Compound Annual Growth Rate (CAGR) of

15.1% over the ten years period
(3) The Indian textile industry, currently estimated at around US $ 108 billion, is
expected to reach US $ 141 billion by 2021. The industry is the second largest
employer after agriculture, providing direct employment to over 45 million
and 60 million people indirectly. The Indian Textile Industry contributes
approximately 5 per cent to GDP and 14 per cent to overall Index of Industrial
Production (IIP). The Government is also set to unveil a National Textile
Policy that aims to raise export to $ 300 billion by 2024-25 and create around
35 million jobs
(4) While apparel and garment industries are to be set up in Uttar Pradesh, Bihar
and the North-Eastern States, millions of jobs are expected to be created within
the States. The Government has also simplified guidelines for setting up textile
parks
(5) Hence, the Government aims to formulate a new improved Textile Policy to
address concerns of adequate skilled workforce, labour reforms, attracting
investment in the Textile-Sectors, as well as providing a future roadmap for
the textile and clothing industry. The objectives of the new Textile Policy as
stated below:
(a) To develop a vision statement of the textile sector for the next decade
to treble Indian market share from the current 4 per cent in the next
decade;
(b) To formulate a stable and fibre neutral raw material policy to benefit
the entire value chain;
(c) To address modernization and mechanization needs of the textile

industry;
(d) To formulate recommendation for development of a skilled work force;
(e) To formulate recommendation for creating world class infrastructure

for Textile Parks and conducive investment environment;
(f) To formulate recommendations for developing and modernizing the

powerloom and handloom sector;
(g) To address the proliferation of environmental concerns;
(h) To address inter-segmental inconsistencies in policy in respect of fiscal

arrangements and formulate recommendations for balanced growth of
the sector;
27
(i) To suggest measures to enable the Textile Ind ustry to attain and sustain
a pre-eminent global standing in the manufacture and export of textile
products;
(j) To formulate recommendations to address credit requirements of the

textile sector;
(k) To formulate recommendations for addressing issues relating to

marketing strategies
4.3 SCHEME FOR INTEGRATED TEXTILE PARK (SITP)

(1) In order to assist the Indian Textile industry to take advantage of post quota
global trade regime, Government of India has introduced a new scheme
namely Scheme for Integrated Textile Parks (SITP) by merging the Apparel
Parks for Exports Scheme (APES) and the Textile Centre Infrastructure
Development Scheme (TCIDS). The objective of the scheme is to provide
world-class infrastructure facilities to the industry in order to support
production of textiles on modern machinery
(2) The salient features of SITP are given below:
(a) The Ministry of Textiles (MOT) would implement the Scheme through
Special Purpose Vehicles (SPVs), promoted by the user industry
groups (the entrepreneurs need to have majority stake in the SPV)
(b) The Government of India (GOI) would provide grant to the tune of
40% of project cost, subject to a ceiling of Rs. 40.00 crores for
provision of common infrastructure & factory buildings if owned by
the SPV. However, GOI support will be provided to the tune of 90% of
the project cost subject to ceiling of Rs 40.00 crores for first two
projects in the States of Arunachal Pradesh, Assam, Manipur,
Meghalaya, Mizoram, Nagaland, Tripura, Sikkim and Jammu &
Kashmir. The remaining 60% of the project cost would have to be
mobilized by the SPV through debt or equity
(c) An ITP will have the following components:
(i) Group A – Land
(ii) Group B – Common Infrastructure like compound wall, roads,

drainage, water supply, electricity supply including captive
power plant, effluent treatment, tele-communication lines etc
28
(iii) Group C – Building for common facilities like testing

laboratory (including equipments), design centre (including
equipments), training center (including equipments), trade
center / display center, warehousing facility / raw material
depot, one packaging unit, crèche, canteen, worker’s hostel,
offices of service providers, labour rest and recreation facilities,
marketing support system (backward / forward linkages) etc
(iv) Group D – Factory buildings for production purposes
(v) Group E – Plant & Machinery
(d) The services of a professional agency are to be used by the

Government as Project Management Consultant (PMC), in
implementing the scheme
(e) Forty (40) Textile Park projects have been sanctioned in 10th and 11th
Five Year Plan. The estimated project cost (for common infrastructure
and common facilities) of the 40 sanctioned project is Rs. 4121.23
Crore, of which Government of India assistance under the scheme
would be Rs. 1427.65 Crore, out of which Rs. 1058.60 Crore has been
released under SITP. Eleven projects have been completed and
production has been started in 25 out of 40 sanctioned projects
(f) The break-up of projects sanctioned in various states of the country is

given in the Table below:
Table 4- 1 : State Wise Number of SITP Approved Parks
Number of Parks
S No. State
Approved
1 Andhra Pradesh 5
2 Gujarat 7
3 Karnataka 1
4 Maharashtra 9
5 Madhya Pradesh 1
6 Rajasthan 6
7 Tamil Nadu 7
8 West Bengal 1
9 Punjab 3
Total 40
(g) Twenty-One (21) new parks were sanctioned in October 2011 with
project cost of Rs. 2329 Crore (including land cost) and Government of
29
India contribution is estimated around of Rs. 819 Crore, out of which

Rs. 33.57 Crore have been released in the year 2012-13
The break-up of projects sanctioned in various states of the country is

given in the Table below:
Table 4- 2 : State Wise Number of SITP Approved Parks
Number of Parks
S No. State
approved
1 Andhra Pradesh 2
2 Gujarat 1
3 Himachal Pradesh 1
4 Jammu & Kashmir 1
5 Karnataka 1
6 Maharashtra 6
7 Rajasthan 4
8 Tamil Nadu 2
9 Tripura 1
10 Uttar Pradesh 1
11 West Bengal 1
Total 21
(h) Implementation of this scheme would result into creation of exclusive

state of the art textile parks owned and managed by the user industry
that would not only address the infrastructure needs but also enable the
user enterprises in meeting the trade and regulatory related compliances
more effectively
(3) SITP has been well received by the textile industry and 61 textile parks have
been approved for Grant funding
(4) Cabinet Committee on Economic Affairs (CCEA) has approved (i) to begin
implementation and issue financial sanction to the 21 Parks sanctioned in the
11th Plan and to carry over the committed liability beyond Rs. 200 crores
amounting to Rs. 819 Crore into the 12th Plan and amendment the Guidelines
of the Scheme to improve implementation
4.4 STATE INITIATIVE – GOVERNMENT OF ODISHA
(1) The Government of Odisha had introduced policy for industrial development
of the state through Industrial Policy Resolution (IPR) in 2001which was
further amended and modified in 2007. It was formulated to set up a business
climate conducive to accelerate investment in industry and infrastructure
30
projects, raise income, employment and economic growth in the state. The
government also tried to reduce regional disparities in economic development
within the state and attract domestic as well as foreign investors
(2) To reinforce and further expand the above process, Odisha Government has
come out with new industrial policy through Industrial Policy Resolution
(IPR) 2015. The policy has been conceptualized with the aim of making
Odisha a destination of choice for the investor worldwide
(3) Focus Sector of Intervention for next five years under the Policy:
(a) Handicrafts and Textile

(b) Auto and Auto-components
(c) Downstream and Ancillary Industries
(d) Agro and Food Processing
(e) IT and ESDM
(f) Tourism
(g) Civil Aviation and Manufacturing in Aviation
(h) Pharma
(i) Petroleum and Petro-Chemicals
(4) Further, the Government has taken following initiative for development of
industrial infrastructure under its Infrastructure Development Plan through
sector wise:
(a) Creation of Land Bank by IDCO for Industrial Development such

Industrial Estate/Area/Parks and there shall be suitable fina ncial and
management model for such establishment
(b) Establishment of Special Economic Zones (SEZs) with special focus

on IT&ITES, bio-technology, engineering, food processing, textile &
apparel industries. There shall be a separate policy for SEZs providing
fiscal and non-fiscal incentives
(c) National Investment & Manufacturing Zone (NIMZ) shall be

developed as a Greenfield / brownfield industrial cluster having state-
of –the –art infrastructure with business- friendly policies. Under this
kalinga Nagar, Dhamra and Gopalpur are identified as the proposed
location
(d) Launching of mega integrated Petroleum, Chemicals and

Petrochemicals Investment Region (PCPIR) on 284 sq. km. with 15
31
MMTA grass root refinery-cum-petrochemical complex at

Jagatsinghpur and Kendrapara districts
(e) Developing Dhamra, Gopalpur and Kirtania ports on PPP mode and
considering more ports to be developed in the same mode in future and
in due course of time special package with a separate port policy shall
be created
(f) Special thrust shall be laid on Social Urban Infrastructure and private
investment in infrastructure development on public private partnership
(PPP) mode
(5) Incentives for Investors (for Priority Sector)
(a) Government land earmarked for industry under the “Land Bank”
scheme of IDCO and shall be allotted to the investors on lease hold
basis with various incentives and exemption
(b) Non MSME Priority sector shall be entitled to interest subsidy for
timely payment @ 5% per annum on term loan for a period of five
years from the date of commencement of production subject to a total
maximum limit of INR 1 Crore
(c) No stamp duty will be required to be paid in respect of land allotted by

the Government to IDCO or Government/IDCO to Private Industrial
Estate Developers
(d) New industrial units shall be exempted from payment of electricity

duty up to a contract demand of 5 MVA for a period of 5 years from
the date of availing power supply for production
(e) New industrial units shall be eligible for reimbursement of 100% of

VAT paid for a period of seven (7) years from the date of
commencement of production
(f) New industrial units shall be eligible for 100% reimbursement of Entry
Tax on acquisition of plant & machinery for setting up of industrial
units till the date of commencement of production
(g) New industrial units shall be eligible for 100% reimbursement of Entry
Tax on purchase of raw materials for a period of five years from the
date of commencement of production
32
4.5 TECHNOLOGY UP-GRADATION FUND SCHEME (TUFS)
(1) In order to address the need of technology up gradation in the textile sector,
Government of India launched TUFS on April 01, 1999. Initially launched for
a period of five years for textile and jute industries, from April 1, 1999 to
March 31, 2004, the Scheme was extended till the end of the 10th Five Year
Plan, i.e., March 31, 2007 with modification and further restructured w.e.f
April 28, 2011 to March 31, 2012 which was then further extended / rolled
over up to March 31, 2013. Investments under TUFS had gained notable
momentum during its operational life span of over 14 years. However, the
gains made were varied across segments, the processing and power loom
sectors emerged as major areas of concern
(2) Accordingly, the Modified TUF scheme was discontinued and new sanctions
under the scheme were stopped and further Restructured TUF scheme
(RTUFS) was launched w.e.f April 28. 2011 to March 31, 2012 with the
expectation to leverage the investment in the above mentioned sector. RTUFS
was further extended for the first year of the 12th Plan i.e up to March 31,
2013 and the Government recognized this and resolved to further continue the
Technology Up- gradation Fund Scheme for the textile & jute industries in
Revised Restructured form w.e.f April 1, 2013 to March 31, 2017.
Accordingly, the scheme is known as Revised Restructured Technology
Upgradation Fund Scheme (RR-TUFS). The salient features of the RR-TUFS
are discussed below:
(a) The total subsidy outflow to stand alone spinning sector will be kept
26% of the plan allocation (i.e., Rs.11952.80 crore) including
committed liabilities of spinning sector of erstwhile/ modified TUFS,
RTUFS and fresh sanctions in the 12th Plan period
(b) A pilot project on technology up-gradation of power loom sector by

way of hire purchase scheme with an overall outlay of Rs. 300 crore
will be implemented
(c) 10% of the approved outlay for new sanctions will be earmarked for
Micro, Small and Medium Enterprises (MSME)
(d) In case of stand-alone spinning sector, a volume cap of Rs. 250 crore
shall apply on project cost for new sanctions for individual spinning
units
(e) The subsidy benefits under TUFS for 12th plan would be as follows:
33
(i) Stand alone spinning units – 2% Interest Reimbursement (IR)

for new stand alone / replacement / modernization of spinning
machinery
(ii) For units having spinning capacity with forward integration

having matching capacity in weaving / knitting / processing /
garmenting – 5% IR
(iii) Weaving - (i) 6% IR and 15% capital subsidy on brand new

shuttleless looms or 30% Margin Money Subsidy (MMS) on
brand new shuttleless looms for powerloom sector;
(aa) 2% IR or 8% MMS on second hand imported shuttleless

looms with 10 years vintage and with a residual life of
minimum 10 years;
(bb) For 30% MMS – capital ceiling caps of RS. 5 crore and
subsidy cap of Rs. 1.5 crore would be adhered to for
encouraging adequate investments by the MSME sector
(iv) Processing – 5% IR and 10% capital subsidy for specified

processing machinery. CETP/ETP will not be co nsidered for
support under TUFS
(v) Garmenting – 5% IR and 10% capital subsidy on specified

machinery for garmenting units
(vi) Technical Textiles (including non-wovens) – 5% IR and 10%

capital subsidy on specified machinery required in ma nufacture
on technical textiles
(vii) Handloom and silk sector – 5% IR or 30% capital subsidy on

benchmarked machinery
(viii) MSMEs including jute sector – 5% IR or 15% MMS– subsidy

ceiling to be Rs. 75 lakh
(ix) Other segments – i.e., i) cotton ginning and pressing; ii) wool
scouring; combing and carpet industry; iii) synthetic filament
yarn texturising, crimping and twisting; iv) viscose staple fibre
and viscose filament yarn; v) knitting and fabric embroidery; vi)
weaving preparatory machines; vii) made-up manufacturing;
viii) CAD, CAM and design studio and ix) jute industry – 5%IR
(x) Investments like factory buildings, pre-operative expenses and

margin money for working capital are eligible for benefit of
34
reimbursement under the scheme only for apparel and

handloom sector with 50% cap of total new eligible investment
under RR-TUFS. Land is altogether excluded from eligible
investments under TUFS. This benefit, however, shall not be
available for textile units under the Scheme for Integrated
Textile Park (SITP)
(xi) Period of interest reimbursement – Interest reimbursement will

be for a period of 7 years including 2 years of moratorium /
implementation
(xii) Eligibility of restructured / rescheduled cases – subsidy in

restructured cases will be restricted to the quantum approved of
subsidy as given in the initial loan repayment schedule
(f) The Scheme defines technology up gradation as state-of-the-art

technology. Accordingly, technology levels have been benchmarked in
terms of specified machinery for each sector of the textile industry for
availing the benefits under the scheme
(g) The eligible for assistance include spinning, cotton ginning & pressing,
silk reeling & twisting, wool scouring & combing, synthetic filament
yarn texturising, crimping and twisting, manufacturing of Viscose
Filament Yarn (VFY)/Viscose Staple Fibre (VSF), weaving/knitting
including non-woven, fabric embroidery and technical textiles,
garments, made- up manufacturing, processing of fibres, yarns, fabrics,
garments and made- ups and the jute sector
(h) Under the Scheme, an option is available to the Small Scale Textile
and Jute Industries to avail of 15% Margin Money Subsidy (MMS) in
lieu of 5% interest reimbursement, subject to a capital ceiling of Rs
500.00 Lakhs and ceiling on margin money subsidy of Rs 75.00 lakhs.
An option has been provided to the powerloom units to avail of 30%
MMS for brand new shuttleless looms in lieu of 6% interest
reimbursement and 15% capital subsidy / 15% MMS and 2% interest
reimbursement or 8% MMS on second hand imported shuttleless
looms, subject to a capital ceiling of Rs 500.00 lakhs and ceiling on
MMS of Rs 150.00 lakhs for brand new shuttleless
(i) Balancing equipments or equipments required for de-bottlenecking the

production process and waste reduction equipments or devices will be
eligible for funding under RR-TUFS
35
(j) Accessories / attachments / sample machines / spares received along

with the machinery up to value of 20% of the machinery cost e ligible
under RR-TUFS or actual whichever is lower will be eligible
(3) Unlike earlier guidelines, the Scheme would now provide subsidy on the basic
value of the machinery and exclude the tax component for the purpose of
valuation
(4) The Restructured TUFS and its continuation in the 12th Plan have attracted an
investment of Rs. 37,655 crores as per the details in UID application
(5) The scheme proved to very useful in providing the capital to the textile
industry at internationally competitive rate and thereby mobilizing the much
needed investments in to the sector
4.6 TECHNOLOGY MISSION ON COTTON (TMC)

(1) With the objective of improving the productivity and quality of cotton,
Government of India had set up the Technology Mission on Cotton (TMC) on
20th February 2000. The Mission, consisting of four Mini-Missions as follows,
was intended to run for a 5-year term, commencing from 1999-2000,
subsequently extended for some time:
(a) Mini Mission I – Cotton research & Technology Generation
(b) Mini Mission II – Transfer of Technology & Development
(c) Mini Mission III – Development of Market Infrastructure
(d) Mini Mission IV – Modernization / Up gradation of Ginning &

Pressing Factories
(2) Whereas the Mission I & II above is being implemented through the Ministry
of Agriculture, the Mission III & IV are being implemented by Ministry of
Textiles
(3) Under the Mini Mission III, as of February 2009, 251 market yards have been
sanctioned, of which 158 market yard projects have been completed with a
total estimates cost of Rs. 494.25 crores, out of which share of government of
India would be Rs. 255.48 crores
(4) Under the Mini Mission – IV, In Eleventh Plan 860 ginning and pressing
factories have been modernized besides some more factories were modernized
/ upgraded under the scheme of NABARD as also under TUFS. In addition,
some other factories have also been modernized / upgraded by the ginners on
36
their own. Thus, at present total number of modernized G & P factories in the
country are around 1700
(5) With the modernization of ginning and pressing factories, trash contents in the
pressed cotton have reduced significantly. It has come down to 1.5% as against
3% to 4.8% prior to modernization. As a result of the same the domestic
spinning industry has been able to get better processed and contamination free
cotton. Further, the Indian cotton has been accepted world over at par with the
cotton of other exporting countries
(6) A unit proposing modernization the factory should possess all essential
machines and essential infrastructure and also satisfy essential conditio ns. A
unit proposing modernization with TMC assistance should be willing to
maintain all records and furnish all returns to the concerned authorities. It is
also necessary that the unit does not avail of assistance under TUF scheme or
any other subsidy scheme of the Government of India
(7) Continuation of MM (Mini-Mission)- I, II & IV:
(a) With a view to maintaining consistency in research & developmental

efforts through ICAR and State Agricultural Universities, the MM-I of
TMC may be continued during Twelfth Plan for development of high
yielding pest resistant seeds/hybrids to increase yield per hectare and
bring down the cost of cultivation
(b) Technology under MM-II of TMC may be continued in Twelfth Plan

to percolate the benefit of latest technology in cotton prod uction to
small and marginal farmers. The fund outlay proposed for MM – I & II
of TMC is Rs. 250 crore during Twelfth Plan
(c) Based on the estimated cotton production of 438 lakh bales by the end
of the terminal year of Twelfth Five Year Plan, it is recommended that
the efforts of modernization of G & P units through MM-IV of the
Technology Mission of Cotton (TMC) be continued in the Twelfth Plan
Period. The fund outlay proposed for MM-IV of TMC is Rs. 250 Crore
during Twelfth Plan
4.7 DE-RESERVATION FROM SSI

One of the reasons for lack of mega investments in Indian textile industry was the
reservation of most of the sub sectors under SSI. Over the last five years, the
Government of India has deserved all the sectors of textile industry from the purview
of SSI with the objective of consolidation of fragmented capacities and infusion of
37
fresh mega investments. Recently, the Government has de-reserved hosiery and
knitwear from SSI sector
4.8 FISCAL POLICY RATIONALIZATION

The Government of India has introduced several measures to rationalise the duties
with the objective of providing level playing field to the textile industry in domestic
and global markets. Highlights of some of these measures are given below:
(1) Zero excise duty route as existed prior to budget 2011-12, is being restored on
readymade garments made ups. The zero excise duty route will now be
available in addition to the CENVAT route under which manufacturers can
pay excise duty on the final products and avail o f credit of duty paid on inputs
(2) The customs duty on 387 commonly used textile machinery has been gradually
reduced to 5%
(3) In order to enable the textile industry, particularly the garment exporters, to
overcome the financial impact of the strengthening of the Indian Rupee vis-à-
vis the US Dollar, Government of India has initiated several measures through
July to November 2007, including:
(4) Increase in Duty Entitlement Pass Book and Duty Drawback rates
(5) Exemption from service tax on select services
(6) Reduction in interest rates for pre-shipment and post-shipment credit, with
further reduction of 2% for garment units
(7) Faster clearance of arrears of terminal excise duties and Central Sales Tax
(8) Reduction in import duty on certain man-made fibres and their intermediates
4.9 SUPPORT SERVICES

With the objective of assisting the textile industry in terms of increased availability of
qualified manpower, quality improvement and exposure to new technologies, the
Government of India has undertaken several initiatives. Some of these key initiatives
are given below:
(1) Establishment and expansion of educational and vocational training centres

like National Institute of Fashion Technology (NIFT) and Apparel Training
and Design Centres (ATDC) to meet the manpower requirements of garment
industry
38
(2) Establishment of Power loom Service Centres (PSCs) and testing laboratories
to assist the industry in quality improvement, training and technology
adaptation
(3) Revamping the curriculum in textile educational institutions through National

Centre for Up gradation of Textile Education (NCUTE) to match the
requirements of the industry
(4) Establishment of an exclusive national level institute for textile management

education in order to provide competent managerial manpower to the industry
(5) Assisting the industry, through Export Promotion Councils (EPCs), in

undertaking the export market research and promotion
4.10 CONCLUSION
The Government of India, Ministry of Textiles has formulated a comprehensive
policy framework to take the textile sector to new heights. Sector; weaknesses have
been identified and addressed through specific policy initiatives. There is a need to
bring about technological improvement, structural changes, liberalization for controls
and regulations increased productivity of labour and machine and reliable quality
assurance systems. The SITP Scheme aids the sector by providing capital grant- in-aid,
whereas the TUFS scheme provides the units with fiscal incentives for technology up
gradation. The TMC addresses the productivity issues of the most basic raw material,
so as to improve quality and quantity of Cotton
39
V. L AND AND S ITE A NALYSIS
5.1 SITE LOCATION AND CONNECTIVITY

(1) The Park is proposed to be developed over an area of 100 acre land falling
under the village limit of Helapur, Panimahura and Majurigria villages of
Bhandaripokhari block of Bhadrak district
(2) The entire area is flat ground but undulating only near NH5 which is passing
just south to the site
Figure 5- 1: Proposed Site
Source: Google M aps
(3) The proposed site is 13 kms from Bhadrak Town and is adjacent to Balasore –
Berhampur Highway (NH-5)
(4) The site is very well connected to all the major districts and places in and
around the state by road, rail, seaport and airport as given below:
(a) Road Connectivity
The proposed site is at a distance of around 140 kms from

Bhubaneswar, the state capital and at around 340 kms from Kolkata as
well
40
(b) Railway Connectivity
The site is well connected to Bhadrak Railway Station which is at a

distance of 18 kms. The major railway station that connects to Bhadrak
is Bhubaneswar in Odisha and Howrah Junction in West Bengal
(c) Sea Port
(i) The nearest sea port to the proposed site is Dhamra Port which
is at a distance of 60 kms. Dharma is newly developed port in
Odisha being operational since 2011 with a hand ling capacity
of 80MT per annum
(ii) Paradip Port is the major port of Odisha which is located at a

distance of 150 kms from the proposed site (as shown in the
Figure 5-2)
(iii) Vizag and Haldia, the two major ports of India, are also at not
much of distance, they are 570 kms and 275 kms respectively
from the site (as shown in the Figure 5-2)
Figure 5- 2: Sea Port Connecti vi ty
(d) Airport
The nearest airport is Bhubnaeswar International Airport which is at a

distance of about 140 kms from the site
41
5.2 LAND OWNERSHIP
(1) The land currently is in possession of IDCO which in turn will be vested with
the SPV for implementation of the Park, as per the SITP guideline
5.3 CLIMATIC METEOROLOGICAL CONDITIONS

(1) The climate of Bhadrak district is generally hot with high humidity. The month
of May is usually the hottest and December is the coldest month of the district
(2) Monsoon generally comes during the month of June. The average rainfall for
the area is around 1500 mm. The rainfall during June to October constitutes at
least 75% of the actual rainfall of this district
5.4 TOPOGRAPHY AND GROUND PROFILE

The proposed project site is forms an open patch of cultivable land falling under the
arable track, which is called the granary of the state. The entire area is a flat ground
except at the roadside of NH-5 where it is undulating
Figure 5- 3: Site Image
5.5 CURRENT STATUS OF AVAILABLE INFRASTRUCTURE
(1) The site area is well connected power lines as 11 KV lines are passing through
the proposed site which could be utilized for further development
42
(2) A local substation being located at Dhamnagar Chhak which is established for
stepping down to 11 KV supply and distribution of 420 V and 220 V supply
for industrial and domestic purposes respectively
(3) The ground water serves as the source of water for the industries existing in
the area
5.6 FACTOR CONDITION IN ODISHA FOR DEVELOPMENT OF APPAREL

MANUFACTURING PARK
(1) In the State handloom and textile sector provides massive employment
opportunity to rural artisans. The state has a rich tradition of producing
handloom products and hand woven textiles due to indigenous knowledge and
skill imbibed over the generation of rural artisans. The state is known for
craftsmanship in the country. However, Odisha State does not have any
representation amongst the 61 textile parks across the country
(2) The major factor conditions favouring the development of Textile park in
Odisha are:-
(a) Availability of Cheap Labour
(i) As per the census 2011, it is observed that the wage rate of the
labour in Odisha based on their skill set are lower in
comparison with the other states of India as depicted in the
following Figure 5-4:
Figure 5- 4: Comparati ve Statistics for Wage Rate per Day
Source: Labour Bureau of India
(ii) As per census 2011, the details of labour availability based on

economic classification of workers in Odisha is mentioned in
the Table 5-1 below:
43
Table 5-1: Economic Classification of workers
Female Total No. of

S No. Category Male Workers
Workers Workers
1 Main Worker 8794 1913 10707
2 Marginal Worker 3108 3726 6834
3 Cultivators 3375 729 4104
4 Agricultural Lab 3482 3258 6740
5 HH Industry Worker 439 344 783
6 Other Workers 4606 1308 5914
Total 11903 5639 17542
(b) Adequate Water Supply
(i) Odisha has the advantage of availability of abundant water

resources, both in surface and ground water
(ii) The entire State is driven by eleven river basins
(iii) The major river basins of Odisha are Suvarnrekha, Baitarani,

Budhabalanga, Brahmani, Mahanadi, Rushikulya, Vansadhara,
Bahuda, Indrabati, Nagabali and Kolab
(iv) The rivers are mostly inter state rivers and few of them are state
rivers that originates and drain within the state. The table below
depicts the statistics on river length and their catchment in
Odisha
(c) Availability of Surplus Power Supply
(i) There are three sources of power supply in Odisha which are
State, Centre and captive power plants established by major
industries
(ii) There is surplus power in the state from 2005-06 onwards

except in the year 2011-12 as shown in the figure 5-5 below
44
Figure 5- 5: Power Scenario in Odisha
Source: Odisha Power Transmission Corporation Limited
(d) Availability of Powe r at Relatively Cheaper Cost
(i) The power is available at relatively cheaper cost in comparison

to some other states like Andhra Pradesh, Maharashtra and
West Bengal which is shown the Figure 5-6 below:
Figure 5- 6: Comparati ve Statistics for Power Cost
45
VI. P ROPOSED M ASTER P LAN FOR THE P ARK
6.1 PLANNING CONCEPT

(1) IDCO envisages for development and establishment of Apparel Manufacturing
Park in Bhadrak with all the modern facilities, wherein fashion knitted
garments will be manufactured. The planning concept of the project has been
devised in accordance with the standard manufacturing process and other
standard parameters
(2) The Park shall be an environment friendly facility comprising of physical and
common infrastructure components such as CETP which would minimize the
waste produced as a by-product of the manufacturing process
(3) The master plan has been conceptualized by variety of considerations like
opportunities and constraints of the site, location advantage, Government
policy and other factors
(4) The master plan of the park is guided by the applicable development
guidelines of the Directorate of Town Planning. The planning takes into
consideration various aspects of designing such as topography; movement and
circulation; land suitability and land use; and environment sustainability; etc
(5) The master planning of the park is based on the modern planning concepts of
providing good and efficient internal movement with supporting infrastructure
and facilities in an aesthetic environment
6.2 MASTER PLAN

The Master Planning exercise is done with the vision to demarcate the boundaries of
the industrial plots, ascertain location and level of infrastructure including utilities and
amenities and determine the inter and intra circulation pursuant to detailed analysis of
the site, assessment of immediate surroundings and understand the requirement of
various vectors of the apparel manufacturing units that are proposed in the Park
(1) Based on the above exercise the master plan has been developed to incorporate
the principles of an eco- industrial park by maximizing green space and open
spaces, and provision of green belts. The design envisages functional and
accessible work places by incorporating prudent and scientific planning
principles and includes the following:
(a) Location of process and non-process activities

(b) Providing efficient access to the main road from all sides of the park
46
(c) Provision of infrastructure facilities based on the site characteristics,

topography and functionality
(2) The Master Plan of the site essentially includes Common Infrastructure, and
Building for Common Facilities. The design brief specifies provision of all
plots with supporting physical and common infrastructure. Various
infrastructure components planned in the Park are presented in the Table
below:
Table 6- 1 : Proposed Infrastructure Components
S No. Infrastructure Components

1 Common Infrastructure  Bituminous Road Network with Street
Lighting
 Water Supply System
 Storm Water Drainage System
 Sewage Treatment Plant
 Electrical Distribution System
 WTP/ ETP
2 Building for Common  Common Facilities such as Administrative
Facilities Block, Cutting, Washing and Finishing
Sections, Packaging, Product Display,
Testing Lab. Etc.
 Canteen, First Aid Centre
 Production and Marketing Facilities such
as: Exhibition hall, Training & Design
Centre
6.3 LAND USE PLAN

Considering the requirement of green area and optimizing the land use pattern, the
total area allocated for production unit is 59.92 acres which is 59.92% of the total area
of the Park. The proposed land use distribution pattern is given below:
Table 6- 2 : Proposed Land Use Distributi on
S No. Components Area (Acre) % of Area

1 Common Facility 3.95 3.95%
2 Production Area (Factory Shed) 59.92 59.92%
3 Amenities Area 7.06 7.06%
4 Road Parking & Pathways 18.61 18.61%
5 Green Area 10.46 10.46%
Total 100.00 100.00%
6.4 DEVELOPMENT GUIDELINES
47
The development guidelines laid out by the Government of India for industrial land
use have been followed as the development guidelines for the proposed Park as
described below:
(1) Leasable Area
The net area for plots or building sites (i.e. the leasable areas including the
amenities reservation sites) in any layout shall not exceed 50 % of the total site
area
(2) Open Area
The extent of open space shall not be less than 10 percent of the total area of
the Park
(3) Rules pertaining to Roads
(a) The proposed access to the Park shall connect with the existing access
roads with a well-defined access to the development
(b) No road shall be less than 7 meters in width
(c) Corners of two streets shall be chamfered with a 15- meter chamfer
(d) All roads shall be provided with marginal trees planted alternately on
the opposite sides at a distance of not less than 9 meters from each
other and at a distance of not less than 1 meter from the road edge
48
Figure 6-1: Master Plan (Lay Out) of the Park
49
VII. P ROPOSED C OMMON INFRASTRUCTURE
7.1 SITE DEVELOPMENT AND ROAD NETWORK
The site development along with the boundary wall and road network for the proposed
park is explained in detail in the below paragraphs
(1) Site Development and Boundary Wall
(a) Development of ground is required before start of any construction

activity at site. This work shall consist of cutting, removing and
disposing of all materials such as bushes, shrubs, stumps, roots, grass,
weeds, top organic soil, rubbish etc., from the area of works. The task
shall include necessary excavation, backfilling of pits resulting from
uprooting of trees and stumps to required compaction, handling,
salvaging, and disposal of cleared materials etc. All excavations below
the general ground level arising out of the removal of trees, stumps,
etc., shall be filled with suitable material and compacted thoroughly so
as to make the surface as these points conform to the surrounding area
(b) The entire site of the Park shall be provided with boundary wall. The
cost of the internal boundary wall of plots is not considered for the
estimation of the project cost
(c) Estimated Cost
For the purpose of estimating the block costs, PWD norms for
quantities and prevalent market rates have been assumed. Based on the
above the cost of site development is estimated at Rs. 1243.58 lakhs as
presented in the Table below:
Table 7- 1 : Esti mated Cost of Site Development
Rate Amount
S No. Item Quantity Unit
(Rs.) (Rs. lakhs)
Clearing and
1 Scrubbing 404,700 Sq.mt 6 24.28
Compound Wall –
Brick Work with RCC
2 Column 3,340 Rmt 13660 456.24
3 Gate LS 5000000 50.00
4 Site Grading Works 100 Acres 600000 600.00
5 Contingencies 10% 113.05
50
Rate Amount
S No. Item Quantity Unit
(Rs.) (Rs. lakhs)
Total 1243.58
(2) Road Network
(a) The proposed road network in the Park would comprise of the
following components:
(i) Approximately 39322Sq.Mt of road network would be provided

in the site for connectivity from main entrance
(ii) Secondary roads in the Unit, would provide access to the

various blocks in the Unit
(b) The layout plan of the road network is enclosed as Figure 7-1 and the
details of the road network are provided below:
Table 7- 2 : Features of Internal Road
S No. Characteristics Features

1 Right of Way 28 Meter
2 Design Speed 40 kmph
3 Carriageway Width 7 Meter
4 Camber 2.0 percent
5 Footpath (on both side) 1.25 Meter
6 Road Length 3786 Meter
7 Street Light 30 Meter center to center
(i) Pavement Structure
The pavement structure for both roads is similar and both

categories of roads shall be Bituminous Concrete roads. Traffic
intensity of 5 million standard axles is adopted, as per IRC. The
thickness of pavement layers shall be as presented in the Table
below:
Table 7- 3 : Thickness of Pavement Layers
S No. Characteristics Thickness

1 Bituminous concrete 40mm
2 DBM 60 mm
3 Wet mix Macadam 250 mm
4 Granular Sub Base 230mm
5 Sub Grade 500mm
51
Pursuant to detailed ground investigation, the existing soil in the

sub- grade is replaced with material with a CBR in excess of 7%.
(ii) Junction Details
All the junctions are designed to ensure free movement for

vehicles travelling on the Main Roads and Internal Roads.
Turning radii at junctions would be designed to facilitate free
movement of fire tenders and large sized trailers
(iii) Design Parameters
Roads are designed and constructed to IRC standard guidelines

and MoRTH Specification IRC 37-2001
(iv) Typical Cross Sections
Typical cross sections and layout of Roads are presented in

Figure 7-2
(v) Service Lines
Provisions are made for water distribution mains, sewer lines,

telecommunication lines and electrical cabling by the side of
carriage way all along the road. Adequate spaces are reserved
for each one of these utilities. Details of positioning of the
services are shown in the typical road cross sections presented in
Figure 7-1
52
Figure 7-1: Lay out Pl an - Roads
53
Figure 7-2: Road Cross Section Model
54
(c) Estimated Cost
Block cost estimates are prepared based on CPWD norms for quantities
and prevalent market rates. The cost of the road network including site
development is estimated at Rs. 977.32 lakhs as presented in the Table
below:
Table 7- 4 : Cost Es timate for Road Network
Unit Rate Amount

Area
S No. Roads (Rs per (Rs.
(sq.mt)
sq.mtr) Lakhs)
15.0 m wide BT Road 13110 2500 327.75
1
with 1.5m Median
12 m wide BT Road with 6300 2500 157.50
2
1.5m Median
7.5 m wide BT Road 13823 2000 276.45
3
6 m wide BT Road 3264 2000 65.28
4
Culdesac and Junction 1825 2000 36.50
5
Improvements
Parking Area (Paver 1000 2500 25.00
6
Block)
Contingencies @ 10% 88.85
7
Total 977.32
7.2 STORM WATER DRAINAGE

(1) Existing Drainage System
The site of the unit admeasuring about 100 acres piece of land which is almost
levelled
(2) Design Conside ration
A key design aspect of the Unit would be the storm water disposal.
Considering the topographic features and the levels at the site with the
corresponding off- site drainage network, a network of storm water drain
parallel to the proposed road network has been planned to drain the storm
water
(3) Design Parameter
(a) Average rainfall intensity of 25 mm/hour and for a return period of 2

years as per the norms prescribed in CPHEEO manual has been
55
adopted for designing the storm water drainage facilities. A minimum

gradient of 1 in 300 would be adopted for the drains, in order to ensure
that the velocities are greater than 0.6 m/sec. The plot would be graded
in such a manner that the plots are at least 30 cm above the nearest
access road
(b) The detailed design layout plan of storm water drain system is
presented in Figure 7-3
(4) Proposed Drainage System
(a) The network is designed to drain away the runoff from the plots and
the roads would comprise of open rectangular drains. While drains up
to a depth of 600 mm shall have solid block walls duly plastered and
RCC Hume pipes shall be used for drains with depth more than 600
mm
(b) RCC cover slabs shall be provided along the length of the drains
wherever necessary and needed is presented in Figure 7-4
56
Figure 7-3: Layout Plan - Storm Water Drains
57
Figure 7-4: Storm Water Drai nage - Section Model
58
(5) Estimated Cost
Block cost estimates are prepared based on CPWD norms for quantities
and prevalent market rates. The cost of the storm drainage network is
estimated at Rs. 646.84 Lakhsas presented in the Table below:
Table 7- 5 : Cost of Storm Drainage Works
Drains and Pumping Amount

S No. Quantity Unit Rate
Station (Rs. Lakhs)
1 CC Rectangular drain 7572 Metre 7000 530.04
with Coverslab
2 Cross Drainage 14 Nos 200,000 28.00
Works (Culvert)
3 Rain water harvesting 10 Nos 300,000 30.00
recharge well
4 Contingencies @ 10% 58.80
Total 646.84
7.3 WATER SUPPLY SYSTEM

The source of water is from Canal which is 2 Kms from site and Borewells. The
aggregate water requirement for the Park is about 2.5 MLD
(1) Estimation of Wate r Demand
The demand for water in the unit would arise from production units, potable
water requirement for the workers, and for landscape irrigation. In addition,
the unit would also require adequate provision of water for fire fighting. The
total water demand is estimated at 1.5 MLD
(2) Wate r Management System
The water supply to the Units shall be through a Water Supply System, which
shall comprise of a Raw Water Sump, Ground level Reservoir (GLSR), an
Elevated Service Reservoir (ELSR), pumping station and a Distribution
System
(3) Wate r Supply System
The details of proposed water supply system are given below:
(a) Water shall be collected from the pipeline in the proposed GLS R
59
(b) The portable water from the second compartment shall be pumped to
the Elevated Service Reservoir (ELSR)
(c) The pumping station shall be designed to accommodate a number of

portable pump sets and required number of fire water pump sets
(d) A distribution network shall be laid from the ELSR
(e) Fire water shall be directly pumped along a ded icated fire water pipe
network
(4) Ele ments of Water Supply System
The water supply system shall comprise the following:
(a) Ground Level Service Reservoir (GLSR)
The RCC reservoir shall have separate compartments, one for the fire
and irrigation requirements and another for industrial and drinking
purpose. The reservoir shall be partly below and partly above the
natural ground. A rectangular reservoir is proposed
(b) Pump House and Pumps
(i) There will be separate pump house / switch room near the
sump, to accommodate 10 number of domestic water pump sets
and 2 number of fire water pump sets. Bypassing arrangements
also provide from the pumps to the distribution system, the
elevated service reservoir, to utilize them during an emergency
(ii) 2 pump sets (1 working 1 stand by) are proposed for pumping
the fire and irrigation water
(5) Elevated Service Reservoir (ELSR)
An elevated service reservoir (ELSR) is proposed with a capacity of 1.25ML,

which is equivalent to one third of total daily potable water demand
(a) Potable Water Supply Network – Potable water network distributes the
water from ELSR. Total length of distribution network is about 6587
meters. The pipelines are proposed with HDPE –P6- pipes, keeping in
view the easy in execution, speed of work and foremost, its cost
effectiveness
60
(b) Fire and Irrigation Water Distribution Network –
(i) IS: 96680-1990 envisages the fire fighting standards to supply

47 lps for a period of 3 hours continuously from each fire
hydrant at 44 different locations at the same time in case of fire
breakdown. A total of 2400 lpm should be available from the
44 fire hydrants. It is proposed to pump the irrigation water this
only at a rate of 1620 lpm (23,32,800 liters/day)
(ii) The fire and irrigation water distribution system shall receive
the water directly from the fire water pump sets. During the
remaining period jockey pump will keep the water under
pressure for providing the irrigation water. It is about 1245
meters long. The pipe lines shall be HDPE –P6- pipes as all the
lines are high pressure. Landscape irrigation shall be done
manually from tapings provider in the distribution network.
These tapings could later be developed for use of automated
sprinkler or drip system. The summary of Water Supply system
is presented in the Table below:
7-6: Summary of Water Supply System
S No. System Elements Particulars

1 RCC GLSR of total capacity 1.5 Mld with 2 compartments 1 No.
2 Pump station to supply water from Sump to Elevated
2 1 No.
Service reservoir (ELSR)
3 ELSR of capacity 12.5L 1 No.
c Pump sets 2 No
Pump sets for potable water, pumping water from Sump to
5 2 No
ELSR
Pump sets for fire and irrigation water , pumping water from 4 No
6
Sump to directly to fire distribution network
7 Water distribution net work for potable water
a Material of water mains HDPE –P6- pipes
b Diameter of water distribution network- 150 mm dia
a Material of water mains HDPE –P6- pipes
b Diameter of water distribution network 90mm to 150mm
c Length of water distribution network 5679 meter
61
Figure 7-5: Water Distributi on Network
62
(6) Estimated Cost
Block cost estimates are prepared based on CPWD norms for quantities and
prevalent market rates. The cost of the proposed water supply system is
estimated at Rs. 584.99 Lakhs as presented in Table below:
Table 7-7: Esti mated Cost of Water Suppl y
Amount
S No Item Unit Qty. Rate (Rs. in
Lakhs)
1 Tube Wells Nos. 5 500000 25.00
2 Raw Water Storage Tank - UG Tank L 1500000 12 180.00
Raw water pumping main distribution
3 60.00
line L 2000 3000
4 Water Treatment Plant L 300000 7.5 22.50
5 Over Head Tanks L 600000 18 108.00
6 Water Supply distribution lines to units Metre 5679 2000 113.58
7 Pumps and pump rooms LS 25.00
Total 584.99
7.4 SEWERAGE COLLECTION AND TREATMENT SYSTEM

An underground sewerage network has been designed to collect sewage from each
building and convey it to a sewage treatment plant. At the STP, the sewage would be
treated to acceptable standards for discharge into inland water bodies after
disinfection. The treated sewage could be used for irrigation purpose within the Unit
for green belt development and preservation
(1) Sewage Flows, Pipes and Manholes
(a) Sewer Pipe
(i) Considering the type and characteristics of flow, the strength

and durability of the pipe material, availability of p ipe sizes and
jointing methods, PVC Class pipes have been proposed for the
collection of sewage
(ii) To enable smooth flow it is proposed to have a minimum pipe

size of 300 - 600 mm to ensure easy cleaning flow. Minimum
clear cover of 1.00 metre below the formation level of the
road/access shall be adopted for pipes
63
(iii) Sewers shall be designed to maintain flow velocities of more

than 0.6 m/sec to avoid silt deposition and also to ensure self-
cleansing
(b) Manholes
Manhole providing access to sewers for inspection and cleaning shall

be provided at 25 m intervals as well as at points of change in
direction, change in pipe sizes, changes in gradient and at junction
points. The manholes shall be of brick masonry. The shape and size
of the manholes for different depths are presented in the following
Table:
Table 7- 8 : Details of Inspecti on Chambers / Manholes
S. No Depth Range (m) Shape Int. Dim. (mm)

1 d <= 0.90 Rectangular 900 x 800
2 0.90 < d <= 2.50 Rectangular 1,200 x 900
3 2.50 < d <= 9.00 Circular 1,500 diameter
64
Figure 7-6: Effl uent Plots to ETP Model
65
Figure 7-7: Treated Water Model
66
(c) Estimated Cost
The cost estimates for Sewage Collection System is estimated at Rs.

256.94 Lakhs
7-9: Esti mated Cost of Sewerage Collection System
Rate Amount
S No Item Unit Qty.
(Rs.) (Rs. in Lakhs)
Sewerage Treatment Plant
1 No 1 7500000 75.00
(0.9MLD)
2 Sewarage Collection System Metre 5679 2000 113.58
3 Irriagation line to Green Area Metre 3000 1500 45.00
Total 256.94
7.5 POWER TRANSMISSION AND DISTRIBUTION

(1) Powe r Demand
The aggregate power demand for the Unit is estimated at 4 MW for the
manufacturing activities as well as infrastructure facilities
(2) Transmission of Power
The power demand of each shed has been estimated based on the machinery
and lighting requirement and all the sheds will have independent connections
with LT metering
(3) Primary Distribution
The source of power will be from the 11 KV which is passing through the
Park
(4) Road Lighting
Road lighting is planned as single pole structure with LED at a spacing of 30

m along the road
67
Figure 7-8: Electrical Distri bution Network
68
(5) Estimated Cost for Power Supply Network
Based on the power demand calculations, the cost estimates for electrical
transmission and distribution network is Rs. 477.24 Lakhs as presented in the
Table below:
Table 7- 10: Esti mated Cost of Power Suppl y Network
Rate Amount
Item Unit Qty.
S No. (Rs.) (Rs. in Lakhs)
1 Over Head Distribution with
MW 4 80 320.00
Transformer (4MW)
2 Street lighting(Double arm pole with
No 253 45000 113.85
fixtures)
Total 477.24
7.6 LANDSCAPING
(1) Purpose
An attractive landscape of international standards would not only improve the

image of the Unit but would also provide an aesthetic environment to the work
force
(2) Scope
The proposed landscaping would integrate hard and soft landscapes. The
proposed hard landscapes will include road-scapes, street furniture, signage
and building fronts, etc whereas the soft landscapes would consist of open
spaces, rotundas, areas within the right of way, etc.
(3) Estimated Cost
The cost of the aforesaid landscaping is estimated at Rs. 93.49 Lakhs
69
VIII. P ROPOSED A MENITIES
8.1PLANNING CONCEPT
The unit is envisaged as a self-contained facility with appropriate physical
infrastructure and amenities. The infrastructure consists mainly of facilities provided
in line with the requirements of the unit as well as the norms applicable to such
development
8.2SPATIAL REQUIREMENTS AND AREAS

Amenities as proposed in the Park are based on the requirements of the manufacturing
unit. These are located close to the main entry to the Park for easy accessibility. Since
all the proposed building units have different functions they have been located
independently
(1) Administration & Maintenance
This Block will be a having a built up area of 300 Sq. Mt and will cater to the
Administration and Welfare of the Employees
(2) Canteen
Workers canteen would be provided to accommodate the staff strength of

around 400 Sq.mt
(3) First Aid Centre
The first aid center is envisaged to cater to industrial accidents, sickness. It

would be a small building with basic facilities like first aid kit, stretchers etc.
There shall be a ramp to facilitate movement of wheel chairs/ stretchers.Area
will be 50Sq.mt
70
8.3COMMON AMENITIES
Table 8-1: Esti mated Cost of Common Ameni ties
Rate Amount
S No Item Unit Qty.
(Rs.) (Rs. In Lakhs)
1 Administration complex Sq.mt 300 21000 63.00
2 Security office & security post Sq.mt 50 18000 9.00
3 Canteen Sq.mt 400 15000 60.00
4 First aid center Sq.mt 50 21000 10.50
5 Display Hall Sq.mt 150 21000 31.50
6 Banking Sq.mt 100 21000 21.00
7 Trade Centre Sq.mt 1000 15000 150.00
8 Creche Sq.mt 150 21000 31.50
9 Service Area Sq.mt 100 16000 16.00
Total 412.13
8.4AGGREGATE COST OF INFRASTRUCTURE
The cost of various components of the Infrastructure is estimated at Rs. 4692.52

Lakhs as presented in the Table below:
Table 8-2: Block Cost Esti mates for Infrastructure
Amount
S No. Item
(Rs. in Crores)
1 Site Development & Compound Wall 1243.58
2 Roads 977.32
3 Storm Water Drainage System 646.84
4 Power supply and Street lighting 477.24
5 Water Supply 584.99
6 Sewage Collection & Treatment System 256.94
7 Landscaping & Telecommunication 93.49
8 Common Amenities 412.13
Total 4692.52
71
IX. P ROPOSED INDUSTRIAL P LOT
9.1 KEY FEATURE OF PLOT AND LAYOUT

The following are the key features of the plot which may be proposed:
(1) 50% ground coverage; remaining area shall be kept vacant to provide an
appropriate density of built mass to the whole site
(2) Appropriate setbacks for entry of emergency services like fire tender
(3) Spaces allocation for following activities shall be done in the shed
(4) Processing/Production Area
(5) Administrative office
(6) Loading and unloading deck
(7) Electrical room
(8) Storage space for raw material and finished goods
(9) Storage space for tools
(10) Space for fabric inspection
(11) Maintenance room
(12) Toilet
(13) Unit sing spaces
9.2 INDUSTRIAL UNIT

The built- up area of the factory sheds are given in the table below:
Table 9- 1 : Built Up Area for Industrial Units
S No. Components Area in Sq m

1 Plot GA1-GA45 193276.57
2 Plot GB1-GB25 49222.73
Total 242499.30
72
X. P ROJECT C OST AND MEANS OF F INANCE
10.1 ESTIMATED PROJECT COST
Based on the block estimates for the various facilities proposed in the Park, the cost of
the components eligible under the SITP is estimated at Rs. 48.93 crores. The
aggregate cost of the Project after including pre-operative expenses like interest
during construction period and other administrative expenses is estima ted at Rs. 74.03
crores as presented the Table below:
Table 10-1: Total Project Cost
S.No Particular Rs. (Lakhs)

1 Site Development and Compound Wall 1,244.00
2 Roads 977.00
3 Storm Water Drainage System 647.00
4 Water Supply system 585.00
5 Sewerage System 257.00
6 Admin and Other Common Facilities 412.00
7 Electrical works 352.00
8 Street Lighting 125.00
9 Landscaping 93.00
10 Miscellaneous Fixed Assets 200.00
11 Project Cost for SITP 4893.00
12 Land 2000.00
13 Pre-operatives 147.00
14 Interest during Construction 341.00
15 MM for Working Capital 22.00
Total Project Cost 7403.00
10.2 PROPOSED MEANS OF FINANCE
a) The Project would be positioned for assistance by way of Government Grant

under SITP of Rs. 19.57 crores. The balance requirement is proposed to be
met by collecting equity contribution from the members towards the capital
cost of the project and term loans from a consortium of banks and institutions
b) The proposed means of financing for the Park is presented in the Table below
73
Table 10-2: Means of Financing
S.No Particular Rs. (Lakhs)

1 Grant under SITP 1957
2 Promoters Contribution 1946
3 Loan 3500
Total Means of Finance 7403
74
XI. F INANCIAL APPRAISAL OF THE P ROJECT
11.1 APPRAISAL FRAMEWORK AND OBJECTIVE

An operational and financial appraisal of the Project has been carried out. The
principal components of the appraisal as well its objectives are briefly described
below:
(a) Financial Assessment of the SPV –
(i) As the Project is being implemented on a cluster model, the business

model of the SPV would be based on the collection of lease charges for
the contribution towards development of infrastructure. Such cash
surpluses would also enable the SPV to meet sudden capex
requirements like overhaul / replacement of assets
(ii) Since the SPV proposes to raise external debt for part funding the
project outlay, the financial assessment of the SPV includes
determining the likely cost of services that would need to be recovered
from the Industrial Units as well as the financial impact of the
proposed financing structure of the project. It also has recovery of cost
components such as charges towards maintenance of common
infrastructure, maintenance of common facilities and administration
thereof
11.2 KEY OPERATIONAL AND FINANCIAL ASSESSMENT OF THE SPV

Key Operational and Financial Assumptions
(a) Revenue assumptions
(i) Finance Charges
The debt service requirement of SPV would be fully recovered from all
members, on the basis of built up area of each member
(ii) Rental towards Infrastructure Development
The rental per acre per annum has been considered as Rs. 4.5 lakhs
(iii) Administration Charges – Common Infrastructure
The SPV would recover administration charges from the members

towards providing services in the Park, estimated year-wise, @ 5% of
infrastructure assets. The administration expenditure would be
recovered from the members on the basis of built up area
75
(iv) Charges – Common Facilities
Table 11-1: Charges - Common Facilities
Monthly/ Annual (Rs

S.No Common Facilities Sqm sqm Lakhs)
1 Admin Block 300 500 18.00
2 Workers Canteen 400 50 2.40
3 Display Hall 150 100 1.80
4 Trade Center 1000 500 60.00
Total 82.20
(b) Operating expenditure assumptions
(i) Utility Charges
Table 11-2: Utility Charges
Powe r Cost
Daily SPV Consumption @ 100%
(units) 9,600
Annual SPV Consumption (units) 2,880,000
Power Cost/ unit (Rs) 5
Annual Power Cost (Rs Lakhs) 144.00
Wate r Cost
Daily SPV Consumption @ 100%
(KL) 80
Annual SPV Consumption (ML) 24
Water Cost/ ML (Rs) 50,000
Annual Water Cost (Rs Lakhs) 12.00
(ii) Employee Cost
The key assumptions re lated to dete rmination of the

employee cost of the SPV are as unde r:
Table 11-3: Empl oyee Cost
Annual (Rs
Manpowe r Cost Number Monthly Lakhs)
76
CEO 1 150,000 18.00

Manager Operations 1 60,000 7.20
Manager Marketing 1 60,000 7.20
MIS and IT Staff 2 30,000 7.20
Supervisors 4 25,000 12.00
Security 4 7,000 3.36
Total Manpowe r Cost 54.96
(iii) Maintenance Cost
The SPV would incur maintenance cost estimated to be 2% of

infrastructure assets
(iv) Administration Overheads
Adminis tration Ove rheads are estimated to be 5% of

above me ntione d costs
(v) Depreciation
Depreciation has been cons ide re d on a SLM bas is for all

assets
Table 11-4: Depreciation
Asset SLM WDV

Rate Rate
Land 0% 0%
Infrastructure 3.34% 10.00%
Miscellaneous Fixed Assets 5.00% 15.00%
(vi) Interest Rate
The interest rate on term loans has been assumed @ 13.00%

p.a. Principal moratorium of 2 years is considered from the date
of completion of project, repayment in next 6 years
77
11.3 FINANCIAL PROJECTIONS
(a) Profitability Estimates
Based on the above assumption, profitability of the SPV is as under:
Table 11-5: Profi tability Statement (Rs. Lakh)
Ope rating Year 1 2 3 4 5 6 7 8 9 10

Revenues 730 896 1,016 1,107 1,175 1,162 1,153 1,150 1,179 1,262
Rental towards Infrastructure
Development 144 231 309 396 471 504 540 577 618 661
Administration Charges 98 157 210 270 321 343 367 393 420 450
Common Facilities 33 53 71 91 108 115 123 132 141 151
Finance Charges 455 455 427 351 275 199 123 47 0 0
Expenditure 164 231 290 355 408 433 459 488 518 550
Manpower Cost 55 60 67 73 80 89 97 107 118 130
Power Cost 58 91 119 150 175 184 193 203 213 223
Water Cost 5 8 10 13 15 15 16 17 18 19
Maintenance cost 39 62 81 102 119 125 131 138 145 152
Admin Overheads 8 11 14 17 19 21 22 23 25 26
EBITDA 565 664 726 753 766 729 694 662 662 712
Interest on Loan 455 455 427 351 275 199 123 47 0 0
Interest on WC borrowings 9 11 13 15 16 16 16 17 17 18
Depreciation 179 179 179 179 179 179 179 179 179 179
PBT -77 19 107 209 297 335 376 420 466 515
Tax 0 4 21 42 59 67 75 113 136 160
PAT -77 15 86 167 238 268 301 307 330 356
78
(b) Cash Flows Statement
Table 11-6: Cash Fl ow Statement (Rs. Lakh)
Ope rating Year End 1 2 3 4 5 6 7 8 9 10

Sources
PAT -77 15 86 167 238 268 301 307 330 356
Depreciation 179 179 179 179 179 179 179 179 179 179
Net Cash Accrual 101 194 265 346 416 447 479 485 508 534
Grant 1,957
Equity 1,946
Loan 3,500
Principal Collected from Members 0 0 583 583 583 583 583 583 0 0
Increase in WC Borrowings 67 17 13 12 9 1 1 2 4 9
7,403 168 211 861 941 1,008 1,031 1,064 1,070 513 543
Uses
7,381
Capital Expenditure
Repayment of Loan 0 0 583 583 583 583 583 583 0 0
Increase in WC 89 23 18 16 12 1 2 2 6 11
7,381 89 23 601 599 595 585 585 586 6 11
Opening Cash Balance 22 101 289 549 891 1,304 1,751 2,230 2,714 3,221
Surplus/ Deficit 22 79 188 260 342 413 446 479 485 507 531
Closing Cash Balance 22 101 289 549 891 1,304 1,751 2,230 2,714 3,221 3,753
79
Table 11-7: B alance Sheet (in Rs. Lakh)
Ope rating Year 1 2 3 4 5 6 7 8 9 10
Grant 1,957 1,957 1,957 1,957 1,957 1,957 1,957 1,957 1,957 1,957
Equity 1,946 1,946 1,946 1,946 1,946 1,946 1,946 1,946 1,946 1,946
Loan 3,500 3,500 3,500 2,917 2,333 1,750 1,167 583 0 0
Reserves and Surplus -77 -62 24 191 429 697 998 1,305 1,634
Principal Collected from Members 0 0 583 1,167 1,750 2,333 2,917 3,500 3,500
WC Borrowings 67 85 98 110 119 120 121 123 127
7,403 7,393 7,425 7,525 7,704 7,950 8,219 8,522 8,830 9,165
Gross Fixed Assets 7,381 7,381 7,381 7,381 7,381 7,381 7,381 7,381 7,381 7,381
Less: Accumulated Depreciation 179 357 536 714 893 1,071 1,250 1,428 1,607
Net Fixed Assets 7,381 7,202 7,023 6,845 6,666 6,488 6,309 6,131 5,952 5,774
Cash 22 101 289 549 891 1,304 1,751 2,230 2,714 3,221
Working Capital 89 113 131 146 158 159 161 164 170
7,403 7,393 7,425 7,525 7,704 7,950 8,219 8,522 8,830 9,165
80
Table 11-8: Key Fi nancial Indicator
Ope rating Year 1 2 3 4 5 6 7 8 9 10

PAT Margin -11% 2% 8% 15% 20% 23% 26% 27% 28% 28%
DSCR 1.22 1.43 1.26 1.37 1.48 1.57 1.68 1.77
Average DSCR 1.47
Project IRR (post-tax) 14.2%
81
XII. P ROJECT IMPLEMENTATION S CHEDULE
12.1 ROLE OF PROMOTER – IDCO

(1) Odisha Industrial Infrastructure Development Corporation (IDCO) with
capacity of the Promoter of the proposed park and as the nodal agency of
Government of Odisha will develop the apparel manufacturing park at
Bhadrak, Odisha and will be responsible for all the aspects of the project
during the designing, development and implementation.
(2) The roles of Odisha Industrial Infrastructure Development Corporation

(IDCO) being envisaged for the project are:-
(a) IDCO will be responsible for the development and construction of all
the facilities being envisioned for the park. Apart from the grant
support received from Central Governmentfor the project, IDCO will
bear the cost towards development of basic enabling infrastructure,
common facilities for the park through a combination of equity and
debt components
(b) The deployment of requisite manpower and appointment of Project

Management Consultant (PMC) for the project will be a part of the
responsibility matrix of IDCO.
(c) IDCO would obtain all necessary approvals and clearances required for
the development and operation of the park from the concerned
authorities.
(d) IDCO will be responsible for marketing of the project and will put in
concerted efforts to bring in potential units and investments in the park
12.2 ROLE OF SPECIAL PURPOSE VEHICLE (SPV)

(1) The project aims to capture the spirit of Public Private Partnership (PPP)
model by bringing together efficiencies of PPP model and private sector
management. For this purpose, a Special Purpose Vehicle (SPV) will be
created by the participating industrial units of apparel manufacturing units to
be registered under Companies Act, 1956. The Operation and Maintenance
(O&M) of the common infrastructure established within the Park will be
undertaken by the SPV formed by the he investors/ exporters for better
management efficiency and transparency in operation. Apart from Operations
and Maintenance of the assets including the common facilities, the SPV will
82
also provide requisite technical and extension services. It will adequately staff
its operations and maintenance team and carry out the entire O&M activity in
house or outsource to a professional agency
(2) The proposed organization structure of SPV would be as under:
Figure 12- 1: Proposed Organisati on Structure of the SPV
12.3 ROLE OF PROJECT MANAGEMENT CONSULTANT
PMC would assist IDCO in development and implementation of the project. The PMC
shall work in close association with IDCO for implementation of the project. PMC
shall be providing following services during the project implementation period
(1) Project Planning, Engineering and Procure ment
(a) Technical services to IDCO for carrying out surveys/studies and getting
statutory clearances from concerned government agencies required
before start of project construction as follows:
(i) Assistance in preparation of ToR for consultant to be appointed

for Environmental Clearance (If applicable)/other ToRs for
technical surveys/studies required for the Project
(ii) Assistance in preparation of application to state electricity board

and water supply agency for power and water supply and
distribution
(iii) Preparation of final version of Master Plan and assist SPV in

getting requisite approval from local Town and Country
Planning Authority
83
(iv) Preparation of project implementation schedule in line with

approval for the project given by MoT
(b) Detailed engineering of the project including designing, detailed

drawings, preparation of detailed cost estimates of the various
infrastructure and other facilities, estimation of item wise quantities
(BOQ), preparation of bid documents, bid process management,
assisting SPV in selection and appointment of
consultants/contractors/equipment suppliers, preparation and execution
of construction/supply contracts to facilitate commencement of Project
construction as per the Project Implementation Schedule. The detailed
engineering design and preparation of tender would include following
tasks:
(i) Understanding requirements of IDCO, preparation of plans
(ii) Discussion with IDCO on specifications of Core processing

facilities, basic infrastructure, and other components
(iii) Preparation of detailed cost estimation and BOQs based on the

plans and specifications approved by IDCO and based on
prevailing Schedule of Rates (SoR) for the district
(iv) Assistance in preparation of technical bid documents, floating

of tenders, evaluation of bid proposals and selection of
contractors for construction and development of differe nt
components of the proposed park
(v) Preparation of cost estimates and tender largely depends upon

the flow of information from IDCO. Therefore, IDCO shall be
responsible for providing details of their requirements to PMC
which would be critical to ensure early completion of design,
engineering and tendering process
(vi) To ensure efficiency of operations, following te nder packages

may be considered
(2) Project Management and Supervision during Project Construction
PMC will supervise the construction activities of different components of the

park through regular monitoring and periodic reporting to IDCO with the
objective to ensure compliance of quality, completeness and compatibility of
the work output with the construction/supply contracts
(3) Release of Grant Funds
84
PMC will prepare all necessary documentation for submission to MoT in order
to facilitate release of funds sanctioned under the SITP
(4) Liaison for External Infrastructure
PMC will assist IDCO in preparation of requisite documents and in

representation in the meetings/interactions with government agencies,
consultants, and other external agencies for the purpose of successfully
developing the Apparel Manufacturing Park.
(5) Other Assistance to IDCO
PMC along with IDCO will attend all the meetings convened by MoT, State
Government and other relevant authorities during the project implementation
process and will address relevant queries and provide clarifications as sought.
85
12.4 PROPOSED IMPLEMENTATION SCHEDULE

Figure 12- 2: Proposed Implementation Schedule
Item M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 M13 M14 M15 M16 M17 M18 M19 M20 M21 M22 M23 M24
Approvals and
Sanctions
Environment Impact
Assessment Study
and State Approvals
Market and Business
Development
Activities
Land Development,
Leveling and
Boundary Wall
(Tendering &
Construction)
Designing (Architect
designs for building
roads, drainage etc.)
Construction of
Buildings
Development of
Roads,
Electrification.
Sewerage. etc.
Setting up ETP,
86
Item M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 M13 M14 M15 M16 M17 M18 M19 M20 M21 M22 M23 M24
Water Sewerage and
other ancillary
facilities
Finalization of
Eqipments with
design, preparation of
tender document and
calling for quotation
and evaluation
Equipment Supply
Erection of
Equipments
Recruitment Process
Contingency
Trial Run of Facility
87
XIII. R ISK A NALYSIS AND MITIG ATION F RAMEWOR K

The proposed textile park will involve certain challenges and complexities during the
implementation and operational phase of the project. Such challenges and complexities may
lead to certain risks during implementation of the project. Therefore, risk analysis and
management is one of the most important features to deal effectively with uncertaint y and
unexpected event during implementation phase of the project. For this there should be a
robust level of mitigation framework mechanism which can minimize the risk including
following measure:
(1) Conducting due diligence so as to identify the possibility of the relevant risks
(2) Allocating such risks to other party
(3) Requiring adequate insurances which note the financier’s interests to be put in place
Every project is unique and it is not possible to compile an exhaustive list of risks or to rank
them in order of priority. What is a major risk for one project may be quite minor for another.
Therefore, it is important to categorize the risks according to the phases of the project within
which they may arise, which are as follows:
(1) Design & Construction Phase Risks

(2) Operations Phase Risk
(3) Other Risks
13.1 PROJECT DEVELOPMENT AND CONSTRUCTION RISK
Key Project Development and Construction Risks are presented below:
Table 13- 1: Project Devel opment and Constructi on Risk and Mitigation Framework
Risk Mitigation Frame work

Land Development IDCO has the possession of the complete land of 100.00 acres
and the land being earmarked for industrial use, there is no
requirement for obtaining conversion of land use from
competent authority.
Site Connectivity The site is adjacent to Balasore-Berhampur Highway (NH-5),

that is passing just south to the site. The site is well connected
to Bhadrak Railway Station which is at a distance of 18 kms.
The nearest airport is Bhubaneswar International Airport at a
distance of about 140 kms from the site. The nearest sea port
to the proposed site is Dhamra Port, which is located at a
distance of 60 kms. Paradip (Odisha), Haldia and Vizag are
the major ports which are at a distance of 150 kms, 270 kms
and 570 kms from the site respectively. The presence of these
88

ports can facilitate the export business to the proposed project.
The site has easy access to basic infrastructure like road,
power, water, and airport and other support infrastructure
Project Design and IDCO has appointed IL&FS Cluster Development Initiative
Approval Limited (IL&FS Clusters) as its Consultant, which will assist
IDCO in project development in terms of Feasibility Study,
preparation of Detail Project Report (DPR), approval
processand related documentation, etc.
Promoter Risk IDCO, the promoter of the project in the capacity of the nodal
agency of Government of Odisha, has expertise in industrial
infrastructure development in Odisha.
IDCO is in the process of inviting industry participant to set

up the industry in the Park and coopting them in the SPV. on
the basis of interest received from industry participant IDCO
is confident of b ringing apparel units in the park.
Financing Risk The key parameters of evaluation of risk rating of companies

involve assessment of the following:
Financial risk: Evaluation of the financial position of the

company, turnover, profitability, liquidity, debt burden, debt
service capability and repayment, asset quality, financial
flexibility and cash flow adequacy
Industry risk: Industry characteristics, size, growth potential,

cyclicality, Government policies (duties, price controls,
licensing etc.), competition, threats of
imports/substitutes/unorganized sector, technology risk, entry
barrier/s, bargaining power with supplier/s
Business risk: Market position, product range, quality, brand

equity, operating efficiencies, availability of raw material
Given the financial strengths of IDCO and Government of

Odisha support for the project, financing risk may not be
considered a potential risk and a challenge to the project
Delay in project IDCO will enter into date certain fixed price contracts with
completion and / or contractors and suppliers of the equipment. The risk of delay
construction cost overrun and cost overrun would be passed on to the
contractors/suppliers. Such clauses would be suitably provided
for in the TOR/MOU to be entered into with various
89

contractors and equipment suppliers.
The technical consultant (PMC) would periodically submit

progress reports on the project construction and would bring
any time slippages to the attention of the board of management
Availability of Water The ground water serves as the source of water for the
industries existing in the area.
The area is endowed with the presence of two major rivers –

Shalandi and Baitarani at around 10 kms and 15 kms of
distance respectively. These can be used as an sustainable
option for water supply for industrial usages in the said area.
Force Majeure Events Suitable insurance cover would be obtained for insurable
items/events
13.2 OPERATION PHASE RISK

The Mitigation measures for risks during operation phase are as follows:
Table 13- 2: Operati on Phase Risk and Mitigati on Framework

Recovery of charges IDCO proposes to recover the development cost from the
entrepreneurs by way of the following charge:
O&M of the park will recover the O&M charges from the
entrepreneurs by way of following charges:
 Charge I – Rental towards infrastructure development
 Charge II – Administration charges
 Charge III – Monthly rentals from common facilities

like admin block, workers canteen, display hall, trade
center etc.
SPV shall enter into an agreement with the units. The

agreement shall provide rights to the units for setting up
apparel unit in the park. The Agreement shall also
contractually bind the Industrial Units to pay all such charges
as may be levied by the SPV for the allotment, development
90

and maintenance of infrastructure assets and provide recourse
by way of rights to replace units that have defaulted in respect
of payments to the SPV or which do not commence operations
within a given time period
Units do not commence The agreement would provide for re-possession of the factory
production shed/plot by IDCO/ SPV, as the case may be, in the event a
unit does not commence production within a given time
period or such time may be extended by IDCO/ SPV
O & M risks The Park will enter into suitable O&M contracts for the
operation and maintenance of project assets
Availability of Availability of skilled manpower in the project area is an

manpower element with moderate risk. To address this requirement,
IDCO/ SPV shall take necessary steps to organize training
programs for unskilled manpower. The training programs
shall be designed and undertaken in consultation with
professional agencies having requisite competency
Breach of agreement by If a unit commits breach of the agreement and fails to pay the
the Units Charges, the licensor would be entitled to terminate the
Agreement and take the following steps:
 The Lessee shall, without any notice, be entitled to

enter upon the Plot of the Land and / or Work shed
given on and license basis (“Demised Premises”) and /
or evict the member from the Demised Premises and
take possessions of the same.
 The Lessee shall have the right to stop and cease
provision on any or all of the utilities like power and
water to the Demised premises and / or take other such
actions at its sole discretions.
 In addition to the member’s rights provided in Clause
(A) hereinabove , the member shall also be entitled to
recover from the Lessee and the Lessee shall be bound
to pay to IDCO/ the SPV, as the case may be, the
following amounts:
o The cost incurred toward repair and
maintenance of the Demised Premises to render
and maintain it in good working order and
condition and all costs charges and expenses
incurred by IDCO/ the SPV and in re
91

possessing the Demised premises and in
enforcing its remedies howsoever occasioned.
o All other sums which have become due and
payable by the Licensee under the Agreement
along with interest
o Allot the Demised Premises to a third party
92
XIV. ECONOMIC B ENEFITS OF THE P ROJECT

(1) The proposed apparel manufacturing park will have huge socio-economic benefits for
the Odisha region particulary and as a whole. A project of this magnitude is going to
have a huge impact on the domestic as well as export market. This proposal would
also complement the state initiative where the Government of Odisha is trying to
attract large investment in the non- mineral based sector and trying to give special
focus on segments like agro-processing, automobile, auto-components, textile,
apparel, and ancillary and downstream industries. Like any other program of public
investment, the proposed apparel manufacturing park would generate both primary
and secondary benefits. Primary benefits are connected with immediate utilization of
the opportunities which will be created by the proposed investment made in the park
and establishment of investment units. As a result of this utilization, new production
wing of apparel Park would be available in the state. In this case, primary benefits
would be measured by revenues accruing to the investment units to be accommodated
in the proposed apparel park. With the emergence of new production, there are
secondary benefits which will be realized in terms of generation of indirect
employment on account of the operation of the units, development of local skills,
improvement of techniques of production and growth in tertiary sectors.
(2) In addition to the above, investment in the proposed project would also help the
industry of textile as well in its own sphere in terms of quality production,
employment generation, strengthen the forward and backward linkages, livelihood
improvement, socio-economic benefits for the region. There are several other benefits
which may be realized out of this proposed project as mentioned below:
(a) Improved and better employment opportunities in the organized and

unorganized sectors
(b) Reduction in disguised unemployment / under-employment levels and

improved employment in industrial sectors
(c) Strengthen and inducement of further development of industrial sectors in the

region and neighbouring district of the state
(d) The increase in production activity will ignite the support services and
subsequently it will lead to develop the entire region
(e) The development of the project will increase opportunity in investment which
would attract private investors to invest in the project
(f) The export oriented production in the park will attract the attention of the
foreign countries and thus will enhance the status of the region globally
93
(g) The proposed project would help in creating and upgrading vocational skills of
the people in the area
(h) Project implementation would absorb local skilled, semi-skilled and unskilled
workers in various services like as masons, carpenters, construc tion workers,
electricians, etc
14.1 PROJECTED SOCIAL AND ECONOMIC IMPACT OF THE PROJECT

The proposed apparel manufacturing park at Bhadrak district will have substantial
impact on the existing social and economic status of the region. Based on the above,
the perceived benefits that are likely to accrue to the site area by setting up of the
proposed park will be:
(1) Employme nt Ge neration
The project will generate employment in villages of Bhadrak and establish

value addition framework in the region. The project will generate income and
employment opportunities for both male and female in the site area through
handling, logistic management, value addition and distribution
(2) Skill Up-gradation
The setting of the Park would provide opportunities to the local unemployed
youths to upgrade their skills and thereby gain sustainable employment. The
project would facilitate up-gradation of existing technical institutions engaged
in skill up-gradation programs to suitably add/modify the curriculum to meet
the requirements of the park
(3) Improved Physical and Social Infrastructure
The setting up of the project of such capacity will bring in technical and
commercial human resource from all across the state in particular and in the
country as whole. The population will bring in higher purchasing power, better
transportation facilities, better roads, medical and water supply facilities
(4) Entrepreneurial Encouragement
Apparel Manufacturing Park would invite investment units to set up in the

region which further invite ancillary businesses and several other associated
businesses. As a result, local people will be encouraged to become a vendor
for electrician, transport, packaging, labour, provider, etc. The most
encouraging part of all that through this local people will be encouraged to
take up the entrepreneurship
94
14.2 BENEFITS TO THE INDUSTRY
The proposed apparel park would be a significant development of the state of Odisha
in terms of revenue, investment, and trade and job creation. The cost would include
not only direct investment in land, but also building, plant and investment required by
industry and services of various types to be provided by support institutions to
industrialists, workers and their families. The returns considered in terms of benefits
to the community as a whole in the wider area around the park are enormous and
would be measured not only in terms of value of goods produced but also number of
jobs created, increase in income and secondary effects on trade, services and even
livelihood activities. The existing industries surrounding the park is not only bound to
benefit from the development of the proposed apparel park but all the entrepreneurs in
and around Bhadrak district and otherwise also to those across the state of Odisha
would get the opportunity to expand their business and compete globally
(1) Benefits for Retail Chain:
(a) Availability of good quality product

(b) Availability of standardized product
(c) Benefits from quality assurance from testing lab
(d) Availability of labelling, packaging facility at apparel park
(e) Variety of garments can be obtained at one place
(2) Benefits for Exporters:
(a) Units can be facilitated as Export Oriented Unit

(b) Availability of Certified Product of International Standard
(c) Adequate facility of logistics and transportation
(d) Quality Assurance is provided
14.3 CREATION OF DIRECT AND INDIRECT JOBS
(1) The apparel/ clothing sector is the final stage of the textiles value chain, with
maximum value addition at this level. It is a low investment and high labour
intensive industry. Hence, one of the key determining factors for ensuring the
competitiveness of the industry is the availability of skilled manpower at
reasonable wages.
(2) In the State handloom and textile sector provides massive employment
opportunity to rural artisans. The state has a rich tradition of producing
handloom products and hand woven textiles due to indigenous knowledge and
skill imbibed over the generation of rural artisans. The state is known for
craftsmanship in the country. However, Odisha State does not have any
representation amongst the 61 textile parks across the country. By setting up
95
this Apparel Park, the State of Odisha will make its prominent place in textile
industry of country and also would be able to check migration of skilled labour
to outer states by creating employment opportunity in the state. As per census
2011, the total number of migrated workers was 6,62,800. Therefore, this
project will aid in prevention of such huge migration in search of employment.
(3) High Employme nt Potential
It is observed that the investment of Rs. 1 Crore in garment industry generates

direct employment of 50 workers. The garment industry also provides
employment to economically weaker and lesser educated strata of the society.
In addition, this sector opens up some of the biggest job opportunities for the
women sector as well, as 80 percent of people employed in Indian garment
industry are women.
(4) Shorter Training Cycle for Employability
Short term training program is sufficient to train the unskilled workers which
provide impetus to the youth to undergo such skill enhancement program in
search of employment.
Table 14-1: Empl oyment Generation
Sources Numbers
Total Direct Employment 24480
24480
Total Indirect Employment
Total Employment 48960
96

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Detailed Project Report Apparel Manufacturing Park at Bhadrak

5.1 Site Location and Connectivity ................................................................................. 40

XII. Project Implementation Schedule ......................................................................................... 82

Table 2- 1: Proposed List of Equipment ....................................................................................... 13

Figure 7-4: SWD- Section Model..........................................................................................................58

Figure 7-5: Water Distribution Network................................................................................................62

Figure 7-6: Effluent Plots to ETP Model ..............................................................................................65

Figure 7-7: Treated Water Model..........................................................................................................66

Figure 7-8: Electrical Distribution Network..........................................................................................68

Figure 12- 1: Proposed Organisation Structure of the SPV............................................................. 82

1.1 PROJECT OBJECTIVES

1.2 PROJECT BACKGROUND

Noida/ Gurgaon, Mumbai, Kolkata, Jaipur and Indore. While Tirupur,

1.3 PROJECT RATIONALE

placement of jobs. In these efforts, it is also possible for the government to

1.4 PROPOSED PROJECT

(2) IDCO specializes in developing industrial infrastructure for various sectors as

1.5 PROJECT LOCATION

Figure 1- 1: Location of the Proposed Park

1.6 PROJECT DOMICILE

(1) The proposed Textile Park is being promoted by Odisha Industrial

1.7 PROJECT LAND

1.8 PROJECT SPONSORS

1.9 BOARD OF DIRECTORS

II. P ROPOSED B USINESS P ROFILE OF THE P ARK

(a) Fabric Storage

Figure 2- 1: Typical Section in Apparel Unit

2.3 EQUIPMENT IN A TYPICAL GARMENTING UNIT

Table 2- 1 : Likely Equi pment

S No. Machine ry Type

2.4 TYPICAL PRODUCTION PROCESS

(1) Pre-Production Process

(2) Production Process

The production process in sewing entails stitching of different parts of the

(3) Post Production Process

Figure 2- 2: Proposed Production Process

2.5 SOURCING OF RAW MATERIALS

Figure 2- 3: Sourcing of Raw Materials

III. MAR KET S TUDY AND D EMAND A SSESSMENT

3.1THE TEXTILE AND APPAREL INDUSTRY – GLOBAL PERSPECTIVE

Figure 3- 1: Gl obal Textile & Apparel Trade (USD Billion)

Source: WTO, UN Comtrade

Figure 3- 2: Ratio of Gl obal Textile Producti on

Table 3- 1 : Worl d Cotton Suppl y (Million Metric Tons)

Table 3- 2 : Worl d Cotton Imports (Million Metric Tons)

Table 3- 3 : Worl d Cotton Exports (Million Metric Tons)

(a) Largest producer of jute

3.2 THE TEXTILE AND APPAREL INDUSTRY – INDIAN PERSPECTIVE

Figure 3- 3: Current Size of Indian Textile and Apparel Market

Figure 3- 4: Indian Textile & Apparel Market

Figure 3- 5: Value Additi on Acr oss Textile Value Chain

3.3 SEGMENT ANALYSIS

India’s textile industry comprises mostly small-scale, non-integrated spinning,

Figure 3- 6: Textile Sector – High Level Value Chain

Source – CITI, 2012-13

(1) Spinning Mills – Yarn Production

(a) With an installed capacity of 48 million spindles, India accounts for

(b) The spinning industry is the most modern and internationally

Table 3- 4 : Yarn Production in Indi a

Year Cotton Blended 100% man-made Total

(2) Weaving / Knitting Units

(a) India’s weaving and knitting sector is highly fragmented, small-scale,

in total fabric production decreased from 51% to 49%, as shown