The state agriculture secretary Umeshchandra Sarangie told The Financial Express on Tuesday that the project will be developed on a build-own-operate-transfer (BOOT) basis. The duration of the BOOT will be 30 years with an option to extend for another 20 years. The government has assumed an internal rate of return of 26.91 per cent and has claimed that the project was financially viable and attractive for the investors.

The project envisages integrated shipment, storage, transport, clearance, processing, trading and trade promotion facilities. It will have berths and storage for bulk commodities, break-bulk cargo, Ro/Ro operations and container and reefer aprons.

The hub will havestate-of-the-art electronic trading facilities, inspection services and testing/certification labs.

The hub will enhance agricultural production and exports, introduce efficiencies into agricultural handling systems, shipping and inspection, include an electronic trading floor for agro-futures contracts and provide a strategically located agro-outlet on the west coast. It will serve Gujarat, Madhya Pradesh, Karnataka, Andhra Pradesh apart from Maharashtra and global markets.

The port bound export will increase 30 million tonnes annually at Redi port site. However, sources added that the turnaround time at present was longer (10 containers per hour) compared to international standards of 30 containers per hour.

The US-based GIC Group which has prepared a detailed project report of the agro-hub has said that the developer will be entitled to float a bond issue with interest of 15 per cent. According to government regulations, port development bonds fall within the category of infrastructure bonds whichwere issued with special tax free coupons. There was no limits on bond denominations.

The centre has provided automatic approval for port investment which covers up to 74 per cent for construction and maintenance. Moreover, the Foreign Investment Promotion Board has given a priority to infrastructure participation with 100 per cent foreign investment.

In a related development, another Dubai-based Galani International has expressed strong interest in taking up six projects worth Rs 160 crore from the agro sector. The project list includes tissue culture, Spirulina, alcohol from Sorghum grain, shrimp farming, molasses derivatives and co-generation plant in Satara district.

Sarangi said that the Rs 10 crore tissue culture complex which will be developed in Pune district will comprise ornamental, flowering, aromatic, horticultural and medicinal plants, true potato and floriculture. The installed capacity will be 10 million plants per annum and the internal rate of return has been assumed at 46 percent.

He said that tax holiday on profit will be offered to the investors and added that initial starter cultures will be provided by the UK-based Novalal plc.

On the Rs 2.42 crore shrimp farming project in Raigad district, Sarangi said that production of tiger prawns will be 88 tonnes annually and added that the rate of return has been taken at 29 per cent. There will be concessional customs duty of 15 per cent per annum on feed and 25 per cent on machineries.

Sarangi said that the Rs 10 crore project for production of alcohol from Sorghum grain will be set up in Akola district with an installed capacity of 29 kilolitres and an annual production of 4,000 kilolitres. The internal rate of return has been taken at 20.93 per cent.

The Spirulina project with an investment of Rs 7 crore will have an installed capacity of 10 tonnes per year and the internal rate of return has been assumed at 31 per cent.