Pre Feasibility Report Setting Up of Kud

Pre-Feasibility Report for Setting of Kuduthini Industrial Area by M/s Karnataka Industrial
Areas Development Board (KIADB)
Pre-Feasibility Report
On
Setting-up of “ Kuduthini Industrial Area”

Kuduthini village, Bellary District
Karnataka State
For
Karnataka Industrial Areas Development Board

14/3, II Floor, Rastrothana Parishad Building,
Nrupatunga Road, Banagalore-560001
Prepared by:
M/s Bhagavathi Ana Labs Private Ltd

(A Bureau Veritas Group Company)
7-2-C-14, Industrial Estate, Sanathnagar,
Hyderabad 500018
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M/s Bhagavathi Ana Labs Private Ltd., Hyderabad Page 1 of 28

CONTENTS
S. No Description Page No.
1 Introduction of the Project 3
2 Project Description 8
3 Site Analysis 16
4 Project Planning 19
5 Infrastructure Development 20
6 Resettlement and Rehabilitation Plan 22
7 Market Assessment 23
8 Project Cost Estimation 26
9 Legal Frame Work 27
10 Analysis of Proposal and Final Recommendation 28
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1.0 INTRODUCTION OF THE PROJECT
1.0 Introduction
State Karnataka considered as a pioneer in the field of industrialization in India.

The State is in the forefront of industrial growth of our country since
independence. In the era of economic liberalization since 1991, the State has
been spearheading the growth of Indian industry, particularly in terms of high-
technology industries such as Electrical and Electronics Automobile Spare Parts,
Information & Communication Technology (ICT) Biotechnology, etc., and also
State enters recently in terms of establishment of Nanotechnology industries.
In order to further consolidate its leadership position in terms of attracting
investments, it is imperative that serviced land is made available to potential
investors facilitating an early start of operations for them, in Karnataka State.
1.1 Department of Industries and Commerce
The Department of Industries and Commerce acts as a catalyst for the overall
development of the industrial sector through effective discharge of
developmental and facilitation roles. With a view to promote investment and
trade, the Department formulates and implements the Policies of the State,
Identification of Sectoral Advantages of the State and Human resource
development for sustainable and growth-oriented industrialization has been a
crucial role of the Department. Facilitating the take off of infrastructure projects
that boost the industrial growth has also been the Department’s forte. The
Department helps enhance the competitiveness of domestic industry through
modernization, technology upgradation and adoption of best practices. It also
provides a forum for entrepreneurs and industrialists through their associations
to represent their needs to the Government, which translates into Policies of the
State.
Some of the crucial infrastructure projects facilitated by the Department include

Growth Centers across the State, Export Promotion Industrial Parks,
International Technology Park Ltd., Electronic city, Food and Agro-technology
parks, Agro Export zones, Special Economic Zones, Bengaluru International
Airport, etc.
The Department is able to reach out to the small businesses as well as Industrial
Houses by a great degree of decentralization within the organizational structure.
The Department functions through the Districts Industries Centers, various
Boards Corporations and Special Purpose Vehicles (SPVs). The implementation of
Policies of the Government is done through various schemes and the
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implementation of these schemes is decentralized for faster delivery of the

services.
The Department has established the Single Window Mechanism for faster, single
point clearances to be given to projects seeking infrastructure
facilities/incentives/concessions and help in establishing industries and
businesses in Karnataka. Karnataka Udyog Mitra is the nodal agency under the
Single window set up.
The Department operates through several Administrative Units viz. the

Directorate of Industries and Commerce at the State level, District Industries
Centres at the District Level, Industrial Wings of the Zilla Panchayats and various
Boards and Corporations.
Since the Commerce and Industries (C&I) Department operates through a host
of agencies that are mandated to carry out various tasks specified in their
business rules. This creates a complicated institutional framework where
sometimes coordinating the activities of all the agencies becomes cumbersome
and thereby agencies work in silos and the intra-agency communication does not
occur.
Also, not all agencies of the C & I are accustomed to undertake projects on a
Public Private Partnership (PPP) basis. Thus far, KSIIDC, KIADB and KSSIDC
(only in a very limited manner) have attempted projects under the PPP mode
with varying degrees of success. The institutional capacity and preparedness of
the agencies for managing projects under the PPP mode is, at best, limited one.
Capacity building of the agencies to successfully develop and manage PPP
projects is a critical area that the Department should focus upon.
1.2 Project Proponent
About Karnataka Industrial Areas Development Board (KIADB)
Karnataka Industrial Areas Development Board (KIADB) is a wholly owned

infrastructure Agency of Government of Karnataka, set up under Karnataka
Industrial Areas Development Act of 1966. This Board functions as per statutory
provisions, rules and regulations enacted there under. The Board comprises of
senior Government Officers in their ex-officio capacities. The Board of members
meet regularly to take decisions and monitor the functions. KIADB holds pride in
being the first Government Organisation in Karnataka to obtain ISO 9001
Certification in the year 1997.
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The key objectives of KIADB are:
 Promote rapid and orderly development of industries in the State

 Assist in implementation of Policies of Government within the purview
of KIAD Act, 1966.
 Facilitate in establishing infrastructure projects
 ฀ Function on “No Profit – No Loss” basis
The functions that KIADB performs are:
 Land Acquisition and Development of Industrial Areas in the State

 Provision of basic infrastructure in the Industrial Areas
 Land Acquisition for Single Unit Complexes
 Land Acquisition for Government agencies for their schemes and
infrastructure Projects
Till date, KIADB has formed 132 Industrial Areas spread over 40,000 acres
across the State, and acquired land for nearly 400 Single Unit Complexes
ensuring balanced industrial development in all regions with well thought out
infrastructure and unique features. Additionally, KIADB has envisaged
Commerce and Industries Department, Government of Karnataka several
innovative projects like Agro -Tech Parks, Apparel Parks, Food Parks, Auto Parks,
Hardware Park, Bio-Tech Park, EPIPs, Sector Specific SEZs, and Growth Centres.
In order to obtain Environmental Clearances (ECs) for their proposed Industrial
Areas, KIADB approached M/s Bhagavathi Ana Labs for conducting
Environmental related studies.
KIADB is also the implementing agency for the ambitions Suvarna Karnataka
Development Corridor (SKDC) project.
1.3 Project Development - Background
The present industrial areas development process in Karnataka is largely

Government driven. The Karnataka Industrial Areas Development Board (KIADB)
acquires land under the KIAD Act, 1966, and develops Industrial Areas / Estates
on its own and later either operates and manages these industrial on their own
or hand it over to the respective industrial association. The marketing and
branding of the industrial area is also done by the KIADB itself.
While the KIADB has been successfully developing industrial areas/estates over
the years, large set of government resources are channelled into the
development of these. While the KIADB acquires the land, there has been limited
exploitation of the potential land value post infrastructure creation on these land
parcels.
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In order to develop the industrial areas, KIADB and the State to unlock the land
values of the serviced land, it is necessary to explore the route of Private Sector
Participation in the development of these Industrial Areas/Estates.
Private Sector Participation would also ensure that the expertise in development
and management of these Areas/Estates is brought in and that the facilities
provided are world-class in nature. Thus, it is proposed that the Industrial Area
in Hassan, spread over 1057 acres, is developed as a model industrial layout
through Private Sector Participation.
1.4 Existing Industrial Area around the project site
The current Site Development for the Industrial Activity at Kuditini village of
Bellary dist of Karnataka. It is for a very large scale site development meant for
mainly “B” Category Industries that have very little Pollution issues and less
water and power requirements in comparison to the large scale projects. The
main Industries that can be developed in the Proposed Industrial Area are
Sponge iron and iron rerolling mills.
1.5 Brief Description about Nature of the Project
The proposed project envisages developing an Industrial Area spread over

645.18 acres (261 Ha) of land. The project would provide facilities that match
any world-class industrial area and would be an ideal place for investors to
develop their facilities without any hassle. The private sector developer would
develop all the infrastructure facilities and also develop land/buildings which are
the “plug and play” format.
1.6 Components of the Project
The project will include the following components:
 Industrial sheds, industrial plots, Grade A/B buildings, built to suit

facilities
 Residential facilities for industrial workers
 Commercial facilities
 Education and training facilities
 Trunk and internal roads
 Water treatment & distribution facilities
 Drainage and sewerage facilities
 Power substation and distribution
 Solid waste and liquid effluent management facilities
 Data and telecom facilities
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1.7 Employment Generation (Direct and Indirect) due to the Project
It is expected that, during construction phase the requirement of labour will be

600-700 persons per day. Local labours will be employed from the surrounding
villages. A temporary labour camp also may be provided as per the situation.
However, the responsibility of constructing a labour camp, if the need be, will lie
with the Civil contract awardee. During Operational phase, there will be both
Direct and Indirect employment generation. About 45-50 persons will be directly
employed by KIADB itself for maintenance of the industrial area, out of which
15-20 persons will be skilled labour.
Besides, it is expected that the individual industries may generate employment

opportunity for approximately 4500-5000 persons in total.
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2 PROJECT DESCRIPTION
2.1. Location of the project
Bellary district is spread from southwest to northeast and is situated on the

eastern side of Karnataka state. The district is 15° 30’ and 15°50’ north latitude
and 75° 40’ and 77° 11’ east longitude. The geographical area is 8447 km².This
district is bounded by Raichur District on the north, Koppal District on the west,
Chitradurga District and Davanagere District on the south, and Anantapur
District and Kurnool District of Andhra Pradesh on the east. Bellary comes under
the administrative control of Gulbarga division and development jurisdiction of
H.K.D.B, Gulbarga. It has 2 revenue sub divisions, Bellary subdivision and
Hosapete subdivision, which in all have seven taluks. The Bellary subdivision has
3 taluks, while there are four taluks in Hospet subdivision. There are 27 hoblies,
one Corporation, one City Municipal Council, two town municipality, six town
panchayats, 542 revenue villages, and 436 thandas/habitations. According to the
2011 census Bellary district has a population of 2,532,383.The district has a
population density of 300 inhabitants per square kilometre (780 /sq mi) Its
population growth rate over the decade 2001-2011 was 24.92%.Bellary has a
sex ratio of 978 females for every 1000 males,[3] and a literacy rate of 67.85%.
The proposed site is located in Kuditini villages, of Ballery district of Karnataka

where the KIADB has acquired 1654 acres of land. This is based on inputs
provided by the development field officers of the KIADB.
The co-ordinates of the project site are presented in the Location Map. The
location Map of the proposed project site is given in Following Figure 2.1
2.2. Connectivity of the proposed project site
General:
Road: National and State Highways passes through the District providing good
connectivity to the Capital City Bangalore and other important Districts and also
parts of Maharashtra, Kerala, Tamilnadu and Andhra Pradesh
Rail: The District is connected well to the important cities like Mangalore and
Bangalore through south central railway network.
Air: The International Airports located in Karnataka are at Bangalore and

Mangalore. However, there is helipad facility available in the district.
Port: The sea port of karnataka is at Mangalore.
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Proposed Project
It is approximately 19 km distant from bellary town, connected to the town via

Nh-63, Sh-69. Nearest railway station of the proposed project site is Bellary
railway station located at 18 km and nearest proposed Banagalore Airport is
270 km away from the project site. The Villages Kuditini are situated besides the
project site. However the habitation of the village is scattered in nature The
Connectivity to the proposed project site is given in following Table 2.1.
Table 2.1 : Connectivity of proposed project site
Description Features Distance

Nearest Highway 63 0m
Nearest Railway Station Ballery 19 km
Nearest Airport Bangalore air port 270 km
Nearest Village Kuditini 2.0 km
Nearest Town Ballery 19 km
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Pre-Feasibility Report for Setting of Kuduthini Industrial Area by M/s Karnataka Industrial Areas Development Board (KIADB)
Figure 2.1 Location Map

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2.3. Size and Magnitude of Operation
The total Area of the proposed project site is 1654 Acres. The major
development would be Industrial Area with Plots based on Size of Industry
planned to be developed. The industrial plots would be distributed based on the
following Sizes, i.e., 0.00-0.49 acres, 0.5-0.99 Acres, 1.0-1.99 Acres, 2.0-2.99
Acres, 3.0-3.99 Acres, 4.0-4.99 Acres, 5.0-5.99 Acres, 10.0-10.99 acres, Civic
amenities, Commercial, Public utility, Residential and Solid waste disposal.
Detailed area Statement is given in Plot Plan.
2.4. Type of Industries
The project is in it’s planning stage now. From the past experience of KIADB
with Industrial Area Developments, it is anticipated that only B Category
Industries as per the EIA Notification, 14th September, 2006 as amended on 1st
December, 2009.
The Type of industries proposed are spronge iron and iron rerolling mills. The
total no. of plots distributed are based on the size of the layout.
2.5. Raw materials Requirement
The proposed project being area development project raw material is required
only during Construction Phase. Construction materials like stones, aggregates,
bitumens etc. will be sourced from Local Market through tendering system. The
transportation of raw materials will be the responsibility of Civil contract
awardees through Commercial vehicles.
However, KIADB will monitor that good construction practices are being adopted
by the civil contract awardee. Transportation of the Raw material will be done in
covered conditions only. Each vehicle will be checked for PUC. Construction
material will be stored in Covered area. Water will be sprinkled regularly on the
haul road to minimize the fugitive emissions.
Approximate quantity of the construction materials, for road as required is given

in the following Table 2.3.
Table 2.3 : Requirement of Construction Materials
Description Requirement
Soil 1225 MT/km
Stone road
Aggregates construction
Bitumen
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2.6. Water Requirement
Construction Phase
The water requirement for the proposed project is approximately 50 KLD

including domestic water requirements for workers (45 lpcd per worker) during
the construction phase based on construction activity requirement. The water
requirement during this phase will be met from the ground water sources and
drinking water at construction sites will be provided by KIADB.
The water requirement of individual industries during operation phase will be

met by groundwater abstraction or any other external source on their own. The
water during the operation phase will not be supplied by KIADB.
However, based on the data collected from KIADB of its operational industrial
areas, the water requirement in the proposed project during operation phase will
be envisaged based on the standard practices of water requirement per acres as
1 MLD/1000 acres.
Operational Phase
The Water requirement has been envisaged for the drinking water purpose and
for the construction from the river Tungabradhra and partly from groundwater
through bore-well. A Water tank of 225 cusecs capacity is planned for transfer of
water for domestic and drinking purposes.
2.7. Power Requirement
Electricity will be supplied by KIADB during construction and operation phase

through KTPCL. During Operational Phase sub-station of suitable load will be
established to meet the total Industrial Load. Power back-up facility will not be
provided by KIADB. Individual Industries will arrange for their own Power Back-
Up. Power lines will also be laid by KIADB. During construction phase, power
requirement will be minimal.
2.8 Indicative environmental & social impacts
Environmental impacts
The environmental impacts due to the development of the industrial area are
pre-dominantly likely to be in term of air, water and noise pollution.
Air pollution would be because of the development activities for the construction
of infrastructure as well as industrial units. The development would be spread
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over a period of 4 to 5 years and would peak incrementally which would further
the pollution load.
Water pollution is likely once the occupancy in the park starts taking place. Once
units become active, effluent discharge will be a critical area which, if not
mitigated, would lead to surface and ground water pollution over time.
Noise pollution would also largely follow the occupation of the park. In the initial
years, noise pollution would be attributable to the construction activity and later
would be attributable to noise emanating from units.
Social impacts
The current land being occupied is largely agricultural land and hence may result
in the loss of livelihoods for farmers. presently, no human settlement is
observed on the land during reconnaissance study and hence no resettlement
and rehabilitation issues are foreseen.
Mitigation measures
It will be advisable to develop both Environmental Impact Assessment (EIA) and

Social Impact Assessment (SIA) studies that would help to clearly identify issues
related to both environment and social aspects with in the study area and
vicinity of the proposed development, thereby the prediction and intensity of the
same is possible for the detailed mitigation measures.
2.9 Waste Management
2.9.1 Construction Waste Management
Waste during construction activity relates to excess cement mix or concrete left
after work is over, rejection caused due to change in design or wrong
workmanship etc. These are normally re-used as filling at the same site after
completion of excavation work
Excavated earth during the civil works including road construction, fencing,
drainage, site leveling etc., shall be utilized within the project site. Topsoil shall
be conserved and will be utilized in the areas earmarked for greenbelt
development.
2.9.2 Municipal Solid Waste Management
Approximately 45 to 50 kg/day of municipal solid waste will be generated from

the construction camp and construction site. This will be collected and disposed
off in a fenced pit at dugout the site for making compost..
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Waste management would be the responsibility of individual industries.

Individual industry will provide system for municipal solid waste collection,
storage and disposal. Each industry shall have to comply with the Municipal Solid
Waste Management Rules, 2000 and amendments thereafter.
Construction Stage:
The solid waste during the construction phase will comprise of excavated earth,
building construction materials.
The construction wastes will be reused mostly for leveling the site and the
segregated recyclable wastes like metals, glass and plastic wastes will be sold to
the authorized vendors.
In addition to that there will be some municipal solid waste generation during
the construction stage which will be collected and disposed off at the designated
municipal waste disposal site.
Operation Stage:
Waste generation from the individual industries, each industry has to obtain
separate authorization, however there are 4-5 storage bins/ 100 acre are kept
and lifted and cleared once/twice a week for the basic waste generated.
An Area of 5-10 Acres to be used for Solid waste storage.
Municipal Solid Waste
Domestic Waste collection system will be collected and dumped at specified

location within the site. Twin bins system will be adopted for segregation of
wastes at source. Recyclable wastes will be sold off to authorized vendors. Bio-
degradables will be treated on-site through Organic Waste Converter and the
compost will be used as manure.
E-Waste Management
The individual industry would obtain separate authorization from KSPCB, for the
disposal of E-waste, its generated.
2.9.3 Hazardous Waste Management
During construction phase no hazardous waste will be generated.
During operation phase hazardous waste management would be the

responsibility of individual industries. Prior to the commencement of production,
each unit shall take authorization for storage, handling and transport of
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hazardous waste, as per the Hazardous Waste (Management, Handling and

Transboundary Movement) Rules, 2008 and amendments thereof.
2.10 Cost of the project
The project is in it’s planning Stage. The total approximate cost of the project is
estimated to be Rs. 300 Crores Tentative break-up of the cost is given in
following Table 2.4.
Table 2.4 : Cost of the project
Description Cost
Land cost 300 Crores
Infrastructure development Cost
Cost for Environmental
Management
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3.0 SITE ANALYSIS
3.1. Existing Features of the Project Site and Surroundings
The major chunks of the land within the project site are infertile sand dunes,
some with scattered grass. The rest is barren land. Figure 3.1 shows the
revenue map/plot plan of the proposed development and annexure presents the
acquired land details in the form of Notification of the KIADB.
3.2. Geography of the Area
Bellary district is spread from southwest to northeast and is situated on the

eastern side of Karnataka state. The district is 15° 30' and 15°50' north latitude
and 75° 40' and 77° 11' east longitude. This district is bounded by Raichur
district on the north, Koppal district on the west, Chitradurga and Davanagere
districts on the south, and Anantapur and Kurnool districts of Andhra Pradesh on
the east. It comes under the administrative control of Gulbarga division and
development jurisdiction of H.K.D.B, Gulbarga.
3.3. Climate
Bellary district lies in the dry and arid climatic zone. The climate in the Hampi is
dry, but due to irrigation activities, the area is humid hot. The summer is
generally hot compared to other parts of the state. The temperature begins to
rise steadily with commencement of summer from February to May. Generally
March and April happens to be the hottest month with maximum temperature
reaching as high as 430C and 440C and the minimum temperature is recorded
during December with 120C to 130C. The wind generally blows from south west
to north east direction and north east to south west. Though the area comes
under dry zone, due to Tungabhadra reservoir and irrigation the humidity is
comparatively more with maximum humidity reaching 96% from July to
November and the minimum humidity during March and April.
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Figure 3.1 Block Map
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Figure 3.2 Plot Plan

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4. PROJECT PLANNING
4.1 Project design
The project design has been adopted by using earlier developments made by
KIADB through out Karnataka state. Feasibility assessment and financial analysis
requires that a detailed plan for the proposed area is to be prepared and
component-wise costs are arrived at after technical studies, for all the projects,
there are no other studies that have been carried out previously. The plans and
designs ideally be left to the developer so that the developer can configure the
design that is best suited for his business plans.
4.2 Land use plan
It is Shown in the Plot Plan in Figure 3.2
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5. INFRASTRUCTURE DEVELOPMENT
5.1 Processing Zone (Industrial Area)
The responsibility of KIADB will be site development, infrastructure development

and allotment of plots for Industrial units. Infrastructure to be provided by
KIADB includes the following things:
• Major and Arterial Roads.

• Drainage System
• Power Station (GSS) and Electrical supply line.
• Green Area
 Common Effluent Treatment Plant
 Common Solid waste management and Hazardous waste management (if
required)
5.2 Green Area development
KIADB proposes to develop the Green belt in 33% Area within the project site
as Green Area. Besides, individual industries will also develop green area in their
own plot as per KSPCB Consent Condition.
5.3 Road network
The total road length required for the area is approximately 40.03 kilometres.
The road network is planned to be distributed into various widths of 15, 18, 24,
30 and 45 metres each and the number of roads will be as suitable for
connecting the internal area. Any change in road length would thus affect the
laying of infrastructure components such as the telephone and electrical cables,
as these are planned to be buried under along the road length.
5.4 Water Supply System
Considering that both, industrial and residential lands are being charted in the
land use plan, a water supply system for the industrial area could be set-up with
a capacity of 1 MLD/ 1000 acres depending on the design life. Provision would
thus be made for water pipelines, a water station and overhead reservoir within
this water supply project. The overhead reservoir would be ideally located in
close proximity to the boundary of the proposed project. The total length of the
water supply line would be same as that of proposed road length for the
industrial area. i.e. 40.03 kilometres. At present the cost of tapping water from
the tapping site is not considered in the capital cost of the planned water
system.
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5.5 Common effluent treatment plant
For Industrial Area development a CETP was considered as a common facility.

However, depending on the nature of industries set up in the industrial area, a
decision on the capacity of the CETP can be taken.
5.6 Storm water drainage
Storm water drainage could be provided by having a closed sewerage system.

Thus the underground pipes can be planned along the right of way (ROW) of the
roads. Hence the drainage system network is assumed to be as per road length,
i.e., 40.03 kilometres. The system should be laid based on the detailed
topographical survey of the area. Particularly during heavy monsoons, the safe
disposal of the storm water would be essential to avoid accumulation of storm
water and for that the provision of slab culverts would be an added advantage.
5.7 Other infrastructure components
Assumptions for other infrastructure facilities like underground telephone cables,

electricity cables, domestic drainage and buildings for common purposes have
also been assumed for the project.
5.8 Rainwater Harvesting
350 nos. of rainwater harvesting pits have been proposed for the project. Main
emphasis given in the planning of the storm water drainage system is on
recharging the underground aquifer of the area while having the safe disposal of
storm water without flooding the campus. A network of storm water disposal
drains will be planned which will finally dispose off into a percolation well for
direct injection of collected storm water into the ground water. Bar screens and
silt traps have been incorporated before the percolation wells to remove the silt,
heavier particles and other objectionable material which can cause the choking
of the percolation well. The drainage system shall be led to various percolation
wells catering to different parts of the catchments area. Silt traps will be
provided at inlet to each percolation well. The overflow from percolation wells
will either be inter connected or will be pumped to the storm water disposal line
to be provided by KIADB.
It is estimated that approximate runoff from the proposed project premises will
be 182739 m3. 30% of the industrial plot area is considered in run-off
calculation assuming the same will be roof top area available from the Industrial
plots. Besides, Road area and Green area is considered in runoff calculation.
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6. RESETTLEMENT AND REHABILITATION PLAN
As the project site is presently a barren land and without any habitation except
some temporary hutments for grazing purpose, therefore, there is no
requirement of Rehabilitation and resettlement Plan. Moreover, the land has
been acquired from the private land owners and compensatory amount has been
paid already by KIADB, hence, no requirement for any other compensations of
any type for land acquisition.
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7. MARKET ASSESSMENT
7.1 Industry outlook
State Karnataka considered as a pioneer in the field of industrialization in India.

The State is in the forefront of industrial growth of our country since
independence. In the era of economic liberalization since 1991, the State has
been spearheading the growth of Indian industry, particularly in terms of high-
technology industries such as Electrical and Electronics Automobile Spare Parts,
Information & Communication Technology (ICT) Biotechnology, etc., and also
State enters recently in terms of establishment of Nanotechnology industries.
In order to further consolidate its leadership position in terms of attracting

investments, it is imperative that serviced land is made available to potential
investors facilitating an early start of operations for them, in Karnataka State.
The Highlights of Karnataka’s Industrial Growth Performance are as follows:
 The ASI figures indicate that Karnataka accounted for 5.53% of the total
registered factories in the country, 7.10% of the fixed capital investment
and 7.23% of the total Gross Value Added by the registered factories in
the country
 Karnataka compared favourably to All-India in terms of labour

productivity, input per worker, output per worker and wages per worker
during 2005-06 to 2007-08
 Karnataka accounted for 5.64% of the total number of unorganized

manufacturing enterprises and 5.42% of the total unorganized
manufacturing employment in the country in 2005-06. In terms of gross
value added per enterprise as well as per worker, Karnataka performed
better than All-India and stood fourth among the states of India
 Under service sector, Karnataka accounted for 4.9% of the total

enterprises and 4.8% of the total enterprise workers in the country. In
terms of both gross value added per enterprise and gross value added per
worker, Karnataka stood first in the country
 Karnataka has registered more than 12000 MSMEs and generated

employment for more than 75000 persons during April-December 2010
 Karnataka is making rapid strides in terms of its important industry

sectors such as food processing industries, textiles, sericulture,
Information Technology and Bio-Technology industries
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 Karnataka has been making impressive progress in e-Governance. Its e-

procurement project won Future gov Award 2010 for Best Business
Practices in Asia’s Public Sector for the year 2010.
 Growing number of SEZs presents another dimension of Karnataka’s

industrialization. This is however skewed towards IT/ITES sectors
 Karnataka is an industrially peaceful State and therefore has salubrious

industrial climate in the country. Naturally, therefore, according to the
Investment Assessment Report of ASSOCHAM, Karnataka is the most
favoured investment destination in the country today
7.2 Demand & Possibility projections
There are limited reference points available to outline the demand projections for
the industrial sector. However, several references are available to the manner in
which the industrial growth of the nation should span out. These have been
described both in the Planning Commissions “Approach Paper to the 12th Five
Year Plan” as well as the National Manufacturing Policy floated by the
Department of Industrial Policy and Promotion (DIPP).Planning Commission’s
approach paper observes that though the Eleventh Plan targeted growth in
manufacturing at 10.0-11.0 per cent, actual performance is estimated to be only
about 7.7 per cent. It is a matter of concern that the manufacturing sector has
not shared in the dynamism of the economy not just in the Eleventh Plan, but
even in preceding Plan periods. As a result, the share of the manufacturing
sector in GDP is only 15.0 per cent in India, compared with 34.0 per cent in
China and 40.0 per cent in Thailand. It further observes that the manufacturing
sector manufacturing must provide a large portion of the additional employment
opportunities as opposed to agriculture for India’s increasing number of youth.
On the contrary it should be releasing labour which has very low productivity in
agriculture to be absorbed in other sectors. While the services sector has been
growing fast, it alone cannot absorb the 250 million additional income-seekers
that are expected to join the workforce in the next 15 years. Unless
manufacturing becomes an engine of growth, providing at least 100 million
additional decent jobs, it will be difficult for India’s growth to be inclusive.
In order to further the manufacturing sector growth, the Planning Commission

has recommended the following strategic objectives for bringing change in the
manufacturing sector in the next 15 years:
Increase manufacturing sector growth to 12.0–14.0 per cent over the medium
term to make it the engine of growth for the economy. The 2.0 to 4.0 per cent
differential over the medium term growth rate of the overall economy will enable
manufacturing to contribute at least 25.0 per cent of GDP by 2025
______________________________________________________________________

 Increase the rate of job creation in manufacturing to create 100 million

additional jobs by 2025
 Emphasis should be given to creation of appropriate skill sets among the

rural migrant and urban poor to make growth inclusive
 Increase domestic value addition and technological ‘depth’ in

manufacturing
 Enhance global competitiveness of Indian manufacturing through

appropriate policy support
 Ensure sustainability of growth, particularly with regard to the

environment
The Karnataka Industrial Policy 2009-14 also lays down emphasis on promoting
industrial development. The mission statement of the policy states the following:
 To create enabling environment for robust industrial growth
 To ensure inclusive industrial development in the State
 To provide additional employment for about 10 lakh persons by 2014
 To enhance the contribution of manufacturing sector to the State’s GDP

from the current level of 17% to 20% by the end of policy period
Thus it is amply clear that the industrial sector will receive significant push in the
future from both the central government as well as the state government. It is
expected that the Indian economy will reach the US $ 6 trillion mark by the year
2020. In order to aid the achievement of this size of GDP, the key growth drivers
will be industry and services. Industry is expected to increase its share in the
GDP from the current 15% to over 25% by 2020.
______________________________________________________________________

8. PROJECT COST ESTIMATION
8.1 Estimated project cost along with analysis in terms of economic

viability of the project:
The estimated project cost which covers the development along with the
common waste handling and disposal facility is approximately 300 Crores.
8.2 Project financials
The project financials have been worked out based on ASSUMPTIONS only and
have been provided for demonstration purposes only. The actual working of
financials for the model industrial area will depend on several components viz.
land use plan, water requirements, common effluent treatment plant
requirements and all other infrastructure components. We have developed the
financial analysis only to demonstrate that it is possible to structure the
development of industrial infrastructure on a PPP basis.
[ 8.3 Cost Estimation
The cost estimates have been worked out based on thumb-rule estimates and
our experience of developing cost and financial analysis for other similar parks..
The overall cost estimates have been outlined below for illustration purpose
only:
Table 8-1: Cost estimates for industrial area
Project component Project Cost (in crores)

Roads
Water Supply
Strom Water Drains
Underground Electric Cables
Telephone Cables 300 Crores
Road Crossing
Drainage
Buildings
Residential Complex
The cost estimates are only for demonstration purposes and may vary depending
on the plan for industrial area.
Funding available under various schemes : The Central Government’s viability

gap funding mechanism allows for funding of up to 20% of the total project for
projects under the PPP mode for projects that are otherwise financial unviable.
The State Government also has a VGF mechanism which provides an additional
20% of the project cost over and above the Central Government’s VGF funding.
______________________________________________________________________

9. LEGAL FRAMEWORK
Regulatory & Legal Framework
Applicable laws & Act and Legal Cover for the project
The Model Industrial Area (MIA) will reap benefits from the following policies
prescribed to further the States’ economic growth:
 Karnataka Industrial Policy 2009 – 14
 Karnataka Infrastructure Policy 2007
 Karnataka Industrial Area Development Act 1966
 Karnataka Renewable Energy Policy
 Karnataka State SEZ Policy 2009
Legal & Regulatory framework
The proposed projects would be developed under the Karnataka Industrial Areas
Development Act. Under this Act, KIADB is the key agency for development of
the industrial areas and estates. The KIADB has been mandated with the
following under the KIAD Act.
 Generally to promote and assist in the rapid and orderly establishment,

growth and development of industries and to provide industrial
infrastructural facilities and amenity in industrial areas, and
 In particular, and without prejudice to the generality of the above, to -
 Develop industrial areas declared by the State Government and make

them available for undertakings to establish themselves;
 Establish, maintain, develop, and manage industrial estates within

industrial areas;
 Undertake such schemes or programmes of works, either jointly with

other corporate bodies or institutions, or with the Government or local or
statutory authorities, or on an agency basis, as it considers necessary or
desirable, for the furtherance of the purposes for which the Board is
established and for all purposes connected therewith.
______________________________________________________________________

10. ANALYSIS OF PROPOSAL (FINAL RECOMMENDATIONS)
10.1 Need for the project
The Davangere Unit of KIADB has successfully set up Kudhitini Industrial Area
projects. Still the demand for organized industrial area exists in the district, as
plenty of Barren and un-cultivable land is available in the district for setting up
the industries.
KIADB being catalyst for Industrial development proposes of Utilizing the

Barren and uncultivable waste land for development of organized and well-
administered Industrial Area to meet the growing demand District of Bellery
besides this proposed Project i..e, Kuduthini Industrial Area, Davengere Units of
KIADB is planning to develop several industrial areas in the district.
10.2 Infrastructures in Surrounding Area
As per the data provided in Chapter 5, it is observed that the infrastructure

facilities of the surrounding areas need development notably Medical,,
Education and Communication facilities in nearby villages. It is expected the
proposed project will catalyze the infrastructure development of the
surroundings as it will attract investment of a considerable portion of Capital of
the District.
Drinking water requirement, Promotion of Educational institutions, Medical

facilities to the villagers (especially Senior Citizens and infants or pregnant
ladies). Community centres, recreation facilities etc will also be developed as
part of social responsibility.
The basic target would be the development of the local villages in the vicinity of
the project. Hence, the scope for development of the local population economical
status is envisaged.
______________________________________________________________________

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Pre-Feasibility Report for Setting of Kuduthini Industrial Area by M/s Karnataka Industrial

Areas Development Board (KIADB)

Setting-up of “ Kuduthini Industrial Area”

Karnataka Industrial Areas Development Board

M/s Bhagavathi Ana Labs Private Ltd

M/s Bhagavathi Ana Labs Private Ltd., Hyderabad Page 1 of 28

S. No Description Page No.

1 Introduction of the Project 3

6 Resettlement and Rehabilitation Plan 22

8 Project Cost Estimation 26

9 Legal Frame Work 27

10 Analysis of Proposal and Final Recommendation 28

M/s Bhagavathi Ana Labs Private Ltd., Hyderabad Page 2 of 28

1.0 INTRODUCTION OF THE PROJECT

State Karnataka considered as a pioneer in the field of industrialization in India.

1.1 Department of Industries and Commerce

Some of the crucial infrastructure projects facilitated by the Department include

M/s Bhagavathi Ana Labs Private Ltd., Hyderabad Page 3 of 28

implementation of these schemes is decentralized for faster delivery of the

The Department operates through several Administrative Units viz. the

1.2 Project Proponent

About Karnataka Industrial Areas Development Board (KIADB)

Karnataka Industrial Areas Development Board (KIADB) is a wholly owned

M/s Bhagavathi Ana Labs Private Ltd., Hyderabad Page 4 of 28

The key objectives of KIADB are:

 Promote rapid and orderly development of industries in the State

The functions that KIADB performs are:

 Land Acquisition and Development of Industrial Areas in the State

1.3 Project Development - Background

The present industrial areas development process in Karnataka is largely

M/s Bhagavathi Ana Labs Private Ltd., Hyderabad Page 5 of 28

1.4 Existing Industrial Area around the project site

1.5 Brief Description about Nature of the Project

The proposed project envisages developing an Industrial Area spread over

1.6 Components of the Project

The project will include the following components:

 Industrial sheds, industrial plots, Grade A/B buildings, built to suit

M/s Bhagavathi Ana Labs Private Ltd., Hyderabad Page 6 of 28

1.7 Employment Generation (Direct and Indirect) due to the Project

It is expected that, during construction phase the requirement of labour will be

Besides, it is expected that the individual industries may generate employment

M/s Bhagavathi Ana Labs Private Ltd., Hyderabad Page 7 of 28

2.1. Location of the project

Bellary district is spread from southwest to northeast and is situated on the

The proposed site is located in Kuditini villages, of Ballery district of Karnataka

2.2. Connectivity of the proposed project site

Air: The International Airports located in Karnataka are at Bangalore and

Port: The sea port of karnataka is at Mangalore.

M/s Bhagavathi Ana Labs Private Ltd., Hyderabad Page 8 of 28

It is approximately 19 km distant from bellary town, connected to the town via

Table 2.1 : Connectivity of proposed project site

Description Features Distance

M/s Bhagavathi Ana Labs Private Ltd., Hyderabad Page 9 of 28

Figure 2.1 Location Map

M/s Bhagavathi Ana Labs Private Ltd., Hyderabad Page 10 of 28

2.3. Size and Magnitude of Operation

2.4. Type of Industries

2.5. Raw materials Requirement

Approximate quantity of the construction materials, for road as required is given