Based on discussions with an international technical consultant, the cost of construction of the facility of the desired scale and scope, cost of specialized works and pre-operative costs would be approximately INR 40 crore. This does not include the cost of land, development costs required etc which has been estimated to be approximately INR 10 crore. Thus the total capital expenditure has been estimated to be INR 49.96 crore. The break up of the capex has been provided below:
Table 24 Capital expenditure split
Land Cost INR 3.04 crore
Acrylic Cost INR 8.04 crore
Construction Cost INR 13.8 crore
Exhibits INR 3.2 crore
Other Specialized Work INR 1.26 crore
Start-up Costs INR 9.57 crore
Development Costs INR 6.5 crore
Contingencies +10%
Land cost
The land cost has been calculated based on the total land requirement for the project and the cost of land per acre in the desired location.
Total Area required for the MRCI Centre
Table 25 Land area requirement
Area for the aquarium acre 1
Area for facilities like parking etc acre 1 Area for future expansion activities acre 10 Total Area for the MRCI Centre acre 12
• The area of the aquarium has been assumed to be 1 acre based on interaction with international technical consultants.
• In addition, almost same area is required for providing facilities like parking for visitors. • Based on interaction with GEC and future development plans around the MRCI centre, an
area of 10 acre would be kept aside for future activities • Therefore, the total required land is 12 acres
Cost of land
• Based on interaction with real-estate agent in Dwarka, a 5.5 acre plot which is about 1 km from beach is available at INR 40/sq ft. An escalation of 30% of land cost has been assumed.
• Cost associated with registration of land including registration fees, stamp duty and taxes have been assumed at 12% of land cost.
• Therefore the land cost is INR 22,65,120 per acre
Total Land Cost = Total Area in acre x Land Cost per acre = INR 3.04 Crore
Acrylic Cost
2.4 meter 2.1 meter acrylic concrete 0.3 meter 2.4 meter 2.1 meter acrylic concrete 0.3 meter Entry Exit 2.1 meter 4 m 2.4 meter concre te Acrylic Entry Exit 2.1 meter 4 m 2.4 meter concre te Acrylic 50 meter long acrylic tunnel Tank 30 meter 24 m 50 meter long acrylic tunnel Tank 30 meter 24 m
Tunnel Front View of tank Top View of tank
Figure 68 Dimensions of tunnel and tank
The cost of a 50 m acrylic tunnel as above was obtained from an acrylic manufacturer as INR 2.8 crore. Since acrylic is manufactured only in three countries in the world, it needs to be imported to India. Hence cost of transportation to India by ship as well as import duty and other taxes need to be paid which have been assumed to be 40% of the cost of acrylic.
Also, acrylic would be required for developing partitions within the main tank. Assuming that for the tank of above dimensions, 2-3 partitions would be required, the cost has been escalated by 1.05 times.
Total Cost of Acrylic is 2.8*(1+40%)*(1+1.05) = INR 8.04 crore
Construction Cost
Based on discussion with international technical consultant, construction accounts for about 34% to 35% of the project cost (excluding cost of land and development costs)
Total Construction Cost = 34.5%*40 = INR 13.8 crore
Exhibits
Based on discussion with international technical consultant, exhibits account for about 4% to 8% of the project cost (excluding cost of land and development costs). Thus the exhibit cost has been assumed to be around 8%.
Total Exhibit Cost = 8%*40 = INR 3.2 crore
Other Specialized Work
Based on discussion with international technical consultant, specialized works accounts for about 31% of the total project cost which is INR 12.5 crore. This includes Life Support System, Decoration - Interior and Exterior, Acrylic, Exhibits. The Other Specialized Work excludes the acrylic and exhibits.
• The cost of providing Life Support System for supporting the flora and fauna of a 50 m tunnel aquarium was obtained from a Chinese provider as USD150,000 FOB.
• About 85% of the system is available locally in India based on discussion with international technical consultants as well as Indian providers. Thus only 15% needs to be imported. • However, the cost of the 85% system has been inflated by 10% over the Chinese costs
which are typically lower than the Indian cost structure. The balance 15% which needs to be imported would have cost associated with transportation as well as duty and other taxes which have been assumed at 40% of the cost.
• This would account for the system requirements for the main tank. For providing additional features, extra 10% cost has been built.
Total Life Support System Cost = (150000*(1+10%)*50)*(1+15%*40%)*1.1= INR 0.96 crore Decoration - Interior and exterior
The balance cost out of the specialized works is the cost of decoration for the interior and exterior of the MRCI Centre.
Total Decoration Cost = INR 0.3 crore.
Total Cost for Other Specialized Works = INR 1.26 crore
Startup Costs
Marketing Expense
INR 2 crore has been set aside for the marketing efforts. This would include launching television campaigns on popular channels in Gujarat, advertisements in popular newspapers and magazines of Gujarat, for publishing brochures to increase awareness as well as organizing visit to schools in Gujarat for group visits.
Total Marketing Expense = INR 2 crore Project Consulting Fee
Consultants would be required during the pre-operative stage to monitor the entire development and construction process against the agreed project plan. This would involve tracking the tasks as per the agreed timelines, issue escalation especially in times of delays and identifying project risks which may affect the timelines. Also, consulting assistance would be required for developing RFP and selecting an appropriate technical consultant as well as private developer. The cost for the consulting assistance was assumed to be INR 2 crore based on fees charged by consulting companies for a project of such scale and duration.
Salary & Wages pre operative stage
It has been assumed that there would be 3 foreigners working full time and 1 foreigner at middle management level to oversee work for 6 months and 1 foreigner at senior level spending about a month. Cost associated with their international travel has also been incorporated. Also 6 month salary for local people hired for operating the aquarium has also been included.
Total Salary & Wages pre operative stage = INR 3.44 crore Staff Hiring and Training
Staff at various levels would be hired for running the facility. This accounts to about INR 1.14 crore. This local staff would need to be trained during the construction phase of the project itself so that they can start running the facility once it kicks-off operations. Training costs have been built in as one month salary of the local hires as per industry practices. This accounts to an additional INR 0.1 crore.
Total Staff Hiring and Training = 1.14 + 0.1 = INR 1.24 crore Miscellaneous
Various other expenses like Company Formation Expense, Expense for receiving regulatory approvals, Ticketing System Cost, Furniture Cost for office and visitors etc have also been assumed.
Road Development Costs
Road Construction
Typically, it costs about INR 8 crore per km for converting a 2 lane highway to a 4 lane highway suitable for vehicles at 100km speed. Using this ballpark figure, for converting a one lane road to a two lane road for normal use, cost of road development has been assumed at one fourth this cost i.e. INR 4 crore.
Land Acquisition for developing the road
Cost of land for developing the road is as per the rate of land in that specific location. It is assumed to be INR 2.5 crore.
Total Road Development Costs = 4 + 2.5 = INR 6.5 crore