Estimated Capital Cost

The indicative capital cost for the entire projecthas been estimated at Rs 26 billion (around USD 520 million). Further the capital cost for the indicative phase I as envisaged by CIDCO has been estimated to be around Rs 10 billion (around USD 200 million).

(As per the techno economic feasibility report prepared by TECS)

	TECS have estimated the capital cost of the project at Rs 2,216 crores. This consists of: • Cost of land: Rs 417 crores. • Internal infrastructure: Rs 1,152 crores. • Miscellaneous fixed assets: Rs 30 crores. • Preliminary and pre-operative expenditure: Rs 320 crores. • Impact of inflation: Rs 216 crores • Working capital (maintenance, salaries & wages and overheads) is estimated at Rs 75 crores per year and is expected to be met from trade credits, which are deposits that potential lessees would place.
	Assuming a debt equity ratio of 1.5:1, the equity capital of the JV would be around Rs 886 crores. This includes the capitalized value of the land, which is Cidco's contribution to the equity.
	TECS assumes that debt can be sourced at 12% pa with a moratorium of 2 years and repayment period of 15 years.

Estimated Capital costs | Revenues & Costs | Financing Plans

 Revenues and Costs
    for NMSEZ

The SPV is likely to generate revenues primarily through sale of land, flatted factories and builtup office space, as well as provision of utility services like power and water. Additional revenue streams include revenues from services like water treatment and sewerage, waste disposal, infrastructure maintenance, etc. Various revenue streams for the SPV include:

	Sale of Infrastructure facilities: This comprises lease rentals of land, flatted factories and multi-storey buildings from industrial units as well as receipts due to lease of property to commercial units.
	Revenues through provision of services: Includes revenue from provision of services such as power transmission and distribution, water supply, water treatment and sewerage, waste disposal, infrastructure maintenance, etc.
	Other service revenue streams include earnings on account of revenue sharing arrangements with outsourced service providers, one-time SEZ charges, entrance fees, etc.

In addition to capital costs incurred towards development of infrastructure, the SEZ SPV would incur additional costs towards operations, provision of services, infrastructure maintenance, as well as other overheads. These costs can be classified into two broad categories:

	Cost of products/services: These expenses include costs incurred towards maintenance of core development infrastructure as well as township infrastructure, cost of power & water to be supplied to the units, and costs incurred towards provision of other services & facilities.
	Operating costs: These expenses include costs of employees, selling & marketing, office maintenance, utilities consumed, consultancy charges, etc.

As these costs are variable in nature, they are likely to scale up in line with the revenues. However, capital costs are likely to be incurred upfront, and revenue build-up is likely to exhibit a significant lag to capital costs. Therefore, the project is likely to witness significant negative cashflows during the initial years, necessitating external financing in the form of debt and equity funds.

Proposed Navi Mumbai SEZ - Phase I (Dronagiri)
Revenue projections

Estimated Capital costs | Revenues & Costs | Financing Plans

 Financing Plans

The project is proposed to be financed through a mix of debt and equity funds. The key financing sources include:

CIDCO funds
CIDCO has the entire SEZ land (except the RPZ area land) in its possession. CIDCO proposes to transfer land development rights to the SPV. The land development rights are proposed to be transferred in a phased manner (in accordance with the development phasing plan) which will be linked to achievement of agreed upon development milestones. Further CIDCO will also transfer the existing assets to the SPV. CIDCO proposes that part-compensation for the transfer of development rights and assets could be in the form of minority equity participation (minimum 26%) in the SPV.

External equity
CIDCO is currently seeking investments from strategic as well as financial investors, and is willing to offer majority equity stake (51% to 74%) and management control of the SPV to the strategic investor(s). CIDCO would retain a minority stake (subject to a minimum of 26 per cent) in the SPV.

External debt
Additional requirement of funds would be met through debt from foreign or local financial institutions and/or banks. The annuity nature of cashflows, high level of service revenues as well as adequate security in the form of asset cover, could lead to favourable terms for debt from lenders; thus reducing the overall cost of capital.

Estimated Capital costs | Revenues & Costs | Financing Plans