Hyderabad: The Andra pradesh government has decided to develop the Indian Navy's ageing aircraft carrier INS Viraat into a world class tourist and hospitality facility. As per the directions of the government CRISIL has submitted a feasibility report on the proposal. CRISIL has recommended taking up the project at a cost of '678 crore.
INS Viraat has six decks with a usable area of 28,569 square meters.
VUDA will enter into a MoU with the Navy to facilitate transfer of the ship to a location in Visakhapatnam, and its decommissioning. The government wants to conduct a detailed technical study to identify a technically and commercially suitable location for berthing the ship.
The study will be conducted in-house with the help of experts from the Institute of Development and Policy Studies (IDPS), Visakhapat-nam Port Trust and Coast Guard. The berthing location will be finalised by March 31.
The study would cover aspects like sea conditions so that the ship can be towed to the berthing site easily, open land availability to support infrastructure, approach road, parking, jetty, ensure that the site is not in conflict with the air funnel zone of civilian and naval airports and make sure that that Coastal Regulation Zone (CRZ) clearances and other clearances are possible.
The government will float a Special Purpose Vehicle (SPV) to facilitate project planning and implementation.
The government is of the opinion that Visakhapatnam is a strong tourism destination with good potential for convention and exhibition facilities. The government wants the project to be dynamic to maintain visitor interest.
as it will need to ensure strong and assured income to offset the investment.
Star hotel and restaurants planned aboard ‘INS Viraat’
In the development concept plan the AP government has proposed a multi-purpose convention hall, luxury hotel, luxury club (yacht club), health spa, café, restaurants, lounge and bars. Under entertainment, there is theatre, auditorium, art gallery, theme park, water sports and water based amusement activities, sound and light show and gaming centre. The government is planning a helipad and it is yet to be evaluated.
The government wants to take up this project under PPP. CRISIL has suggested alternatives like Design Build Finance Operate and Transfer (DBFOT), in which all costs are borne by a private investor with the state facilitating clearances.
Another mode is Joint venture (JV); in this state government has to invest in key infrastructure such as the laying of approach road, jetty, grouting and others and facilitate clearances.
State government's investment will convert into government shareholding in the JV. The third mode is Operations and Management Contract (O&M); in this the state government will invest and develop the project while private investors will furnish interiors and operate for a fixed term.Financial feasibility and revenue projections
CRISIL in its report has projected lease rental earnings, museum revenues and others. Revenue can earned by conducting 50 events in a year at the rate of Rs 3 lakh per event, the available space on 2 to 6 decks can be given on lease basis at the rate of Rs 30 to Rs 60 per square feet per month. Six months lease deposit will be invested in a term deposit at 9 % interest. About 1500 people will visit the museum per day and gate fee should be Rs 100 per visitor.
The museum entry fee is the primary source of revenue and is high. Typically entry fee to such facilities range from $4 to $ 25; other sources include flight simulations, and helicopter rides. The share of other revenues will be 10% to 20% of museum revenue. Revenue can also be generated through film shootings and renting of facilities
