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O/o. DEVELOPMENT COMMISSIONER (HANDICRAFTS)

MINISTRY OF TEXTILES

GOVERNMENT OF INDIA

RK PURAM, NEW DELHI

Expression of Interest (EoI)

For

Technology Upgradation for Individual Exporters

under

Comprehensive Handicraft Cluster Development Scheme (CHCDS)

in Jodhpur Handicraft Megacluster, Rajasthan

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Office of the Development Commissioner (Handicrafts)

Government of India, Ministry of Textiles, West Block 7, R.K. Puram,

New Delhi-110066 *****

Notice Inviting EOI

Notice Inviting Expression of Interest (EoI) for undertaking Technology Upgradation for Individual

Exporters at Jodhpur Handicraft Cluster under Comprehensive Handicraft Cluster Development

Scheme (CHCDS)

The Office of the Development Commissioner (Handicrafts) under the aegis of the Ministry of

Textiles, Government of India has launched the implementation of a Mega Cluster Project at

Jodhpur, Rajasthan.

In this regard this office is inviting expression of interest from eligible Institution/ Implementing

Agencies (IAs) eligible for the following activity:

1. Technology Upgradation for Individual Exporters in Jodhpur

Interested Agencies are advised to study the EOI document carefully and submission of the EOI shall

be deemed to have been done with full understanding of the assignment.

For complete details on each of the above initiative, including details on project components,

funding pattern, eligibility criteria and other terms please refer to the Expression of Interest (EoI).

The details of the scheme eligibility criteria and terms & conditions for the bids can be obtained

from the website www.handicrafts.nic.in. This can also be collected from Asstt. Director

(Megacluster), at the above address at New Delhi (Phone No. 26177790) from 3.00 PM to 5.00

PM on working days starting from date of publishing of the notice.

The last date of submission of EOI/applications, in sealed envelopes, to this office is 31st March

2017 latest by 15.00 hrs, along with all supporting documents.

A pre-bid meeting will be organized on the 15th March 2017 (at 3.00 P.M.) in the Committee Room of

the Office of the Development Commissioner (Handicrafts) at the above mentioned address.

Interested agencies are required to send a communication for attending the pre-bid meeting by e-

mail: mailtodch@gmail.com, praisaxena@gmail.com, and saurabh.dey@ilfsindia.com to O/o DC

Handicrafts.

All tender related queries, corrigendum, updates, if any will be published in the above mentioned websites only.

Assistant Director (H) O/o DC (Handicrafts)

West Block-7, R.K.Puram-1, New Delhi

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Important dates and information

Sr No. Information Details

1 Request for EOI release date 7st March 2017

2 Date of pre-bid conference 15th March 2017

4 Validity period Upto 31.03.2017, 3:00 PM.

5 Last date (deadline) for submission 31st March 2017

6 Opening of bids and evaluation 2nd April to 14th April 2017

7 Contact person for queries Assistant Director (Megacluster), Office of

the Development Commissioner

(Handicrafts), Ministry of Textiles,

Government of India, West Block-7, R. K.

Puram, New Delhi-110 066. Tel: 011-

26177790, Fax: 011-26163085, email :

dchejs@nic.in, praisaxena@gmail.com

Mr Saurabh Dey, IL&FS Clusters, 2nd Floor,

NTBCL Building, DND Flyway, Noida-

201301. Tel: 0120-2459200, 09650560598,

Fax: 0120-2459201,

email:Saurabh.Dey@ilfsindia.com

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Office of the Development Commissioner (Handicrafts)

Government of India, Ministry of Textiles,

West Block 7, R.K.Puram,

New Delhi-110066

*****

Notice Inviting Expression of Interest (EoI) for Technology Upgradation for Individual

Exporters in Jodhpur under Comprehensive Handicraft Cluster Development Scheme

(CHCDS) in Jodhpur Handicraft Megacluster, Rajasthan

1. Introduction

1.1. Mega cluster approach is a drive to scale up the infrastructural and production chain at

Handicrafts clusters which have remained unorganized and have not kept pace with the

modernization and development that have been taken place so far. Consequently, there

has not been any addition of fresh impetus of development and optimum realization of

output in the handicrafts sector, which is the backbone of long traditional heritage and

cultural linkages. The prospects of this sector lie in infrastructural Upgradation,

modernization of the machinery and product diversification. Innovative manufacturing

as well as designing know-how, furthered by brand building of the native products hold

the key to creating a niche market for the products manufactured by the clusters. The

proposed programme is expected to support the Upgradation of infrastructural facilities

coupled with market linkages and product diversification. With this background,

Comprehensive Handicrafts Cluster Development scheme (CHCDS) has been launched.

Details of the scheme is available at www.indianhandicrafts.org.in

1.2. Jodhpur and its adjoining areas are one of the leading centres for handicrafts production

in the country. The cluster including Jodhpur and Barmer has a long tradition of diverse

handicrafts and over the years has emerged as a major hub for the exports of

handcrafted hardwood & metal furniture, home decoration and accessories and textile

based furnishings and made-ups. The Handicraft Megacluster covers the entire Jodhpur

district, and the major craft productions in the adjoining district of Barmer. The

handicrafts exports from the Megacluster contribute over 10% of the total handicrafts

exports in the country. The handicraft industry provides employment to more than

30,000 artisans in Jodhpur. There are over 300 small and medium exporters in the area

who are engaged in the production of wooden & iron handicraft products and have been

exporting to the major world markets in USA, U.K, Germany, Canada, Italy, France etc.

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2. Scope of Work

2.1. Objective of Technology Upgradation for Individual Exporters: Many of the cluster

enterprises are currently still operating using dated technology which has a direct

bearing on the quality of their final product. The scheme therefore aims to promote

technological upgradation keeping in mind the objective of enhancing the

competitiveness of the cluster vis-a-vis competitors in other markets such as Singapore,

Malaysia, Indonesia, China etc who already accrue the benefits of producing at a more

sophisticated and advanced scale.

2.2. The objective of this intervention is to increase the technical capacity of micro & small

exporters in the cluster. It will be of great importance to the exporters who have so far

not been able to upgrade their machinery, at par with their national and international

competitors. Thereby, with technical upgradation, it is expected that there would be

an improvement in the quality and volume of production from these exporters leading

to increase in employment in the cluster.

2.3. It is proposed to support 20 individual exporters and manufacturers of wooden and

iron handicraft products in the Jodhpur Megacluster for technology upgradation with a

maximum grant assistance of Rs 30 lakhs or 30% of the total cost of equipment and

machinery, whichever is lower.

2.4. Eligible Components under the Scheme

a) The scheme allows flexibility in project planning with special emphasis on

technology upgradation through procurement and installation of specialized

equipments and machinery for creating enabling infrastructure for improvement in

the quality and volume of production of the exporters/ manufacturers in the

Jodhpur Megacluster. The machinery and equipments could be both imported &

manufactured locally.

b) To avail financial assistance under this scheme, the applicant will have to set up state-of-art facilities for the following manufacturing processes:

Seasoning and Treatment of Wood

Planing of wood

Jointing of Wood

Sizing of Wood

Tenonering/Mortising of Wood

Assembly

Finishing of final product c) The reference list of latest technology and the equipment for each of these

processes is included in the Appendix 1.

3. Eligible Organizations/Entities

3.1. Funding for Technology Upgradation under Jodhpur Megacluster can be availed by

registered entities such as Partnership/Proprietorship Firms, Companies, Corporations,

etc. with business interest in manufacturing and production of wooden and iron

handicraft products, and located within Jodhpur Megacluster.

3.2. The proposals have to meet the following basic eligibility criteria under the scheme:

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a) Applicants should have minimum 3 years of experience duly supported by audited

books of accounts

b) Average Sales turnover of Rs 2 crores in the past 3 years

c) Should engage minimum 50 artisans

d) The net worth of the applicant should be at least 1.5 times of the total cost of

project applied for. The net worth will be calculated as follows:-

i. In respect of Limited Companies: The net worth will be ascertained based on the paid-up share capital of the company and reserves created out of profits. Revaluation reserves only in respect of land & building may be considered for ascertaining the net worth, which will be based on circle rates duly supported by circle rate notification. Such revaluation reserves shall also be reflected in forward going balance sheet of the company. Share application money would be considered towards calculation of net worth provided the same has been converted into Paid up Capital within stipulated time as per Companies Act but, in any case, it should be converted into paid up capital before the approval is accorded to the project by the Ministry. Loans and advances given to group companies/ related concerns/ individuals will not be considered towards computation of net worth. A latest provisional balance sheet duly certified by the Statutory Auditor of the Company needs to be submitted for ascertaining the networth.

ii. In respect of Proprietorship/ Partnership firms, etc. The net worth of all entities other than companies will be ascertained on the basis of latest balance sheet of individual proprietor/partner(s) i.e. assets minus all liabilities, duly certified by the Chartered Accountant (CA). Following components would be considered towards net worth:- Assets include cash, current value of investments, land and building (supported by valuation report at circle rate, circle rate notification and land ownership documents), Bonds, cash value of life insurance, current total balance of savings, current or fixed deposit accounts. The aforementioned networth components need to be supported by relevant documentation. Shares of unlisted companies will be considered at face value for net worth and shares of listed companies will be considered based on the average market price of the share for a period of 6 months prior to date of submission of proposal. Applicant may also include gold reserves, in form of jewellery and bullion, being currently held for computation of net worth. Assets such as car, , antiques, etc. would not be considered for networth.

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Loans and advances given to group companies/related concerns/individuals will also not be considered towards computation of net worth. The applicant(s) will have to give a self-certification regarding the details of the encumbrance of the property submitted by them towards the networth.

e) Availing term loan from the Bank / Financial Institutions (FI) for an amount not less

than 30% of the project cost.

f) In-principle or final term loan sanction letter along with a detailed appraisal note

from the Bank / FI should be submitted with the proposal. The details of existing

facility including technical civil work and plant & machinery should appropriately be

furnished in the DPR as well as in the Bank Appraisal note. The Technical Civil Work

and Plant & Machinery envisaged under the Technology Upgradation project should

be distinct from the existing facility. A pre-approval inspection may be carried out by

the O/o DC Handicrafts or CMTA. The detailed appraisal note should be specific to

the proposal submitted to the O/o DC Handicrafts. Detailed Project Report /Techno

Economic Viability Report merely stamped or endorsed by the Bank/ FI without

detailed appraisal note shall not be considered as valid appraisal note and such

proposals will not be considered for financial assistance.

g) The date of sanction of term loan should not be earlier than the date of issue of EoI.

h) Land documents, in the name of the applicant or land lease duly registered with the

competent authority for not less than the period of 20 years, for setting up the

proposed machinery and equipments.

i) The applicant will have to set up the production facility comprising of equipments

and machinery as mentioned in para 2.4 above.

j) Not more than one application from the same applicant / company will be

entertained.

4. Funding Pattern

4.1. The following funding pattern for Technology Upgradation for Individual Exporters

component is as below:

# Project Component

Scheme Funding

IA Share CHCDS Funding

Financial Limit- CHCDS Funding

1 Technology Upgradation for Individual Exporters

30% of the total cost of

equipment and machinery

Subject to maximum grant

assistance of Rs 30 lakhs

Minimum 70% of the total cost of equipment and

machinery

4.2. The above sharing pattern towards the cost of project does not include the cost of land

and civil works, required for plant expansion or establishment of machinery.

4.3. The entire cost of land and civil works, required for plant expansion or establishment of

machinery shall be borne by IA.

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4.4. The upgraded manufacturing facility can also be set up in leased premises, subject to the

condition that the lease should be legally tenable for a minimum duration of 20 years at

the time of application.

4.5. Installation charges will be restricted to 10% of the cost of the machines with a max.

ceiling of Rs. 10 Lakhs

5. Release of Funds

5.1. The funding assistance under CHCDS towards Technology Upgradation for Individual

Exporters shall be released as a one-time reimbursement, on eligible investment, only

after satisfactory installation/commissioning and commencement of production.

5.2. Benefits under scheme shall be available only if the eligible machinery and equipments

are purchased by availing term loan from a nationalized/ private bank or any other

leading financial institution.

5.3. The applicant shall be required to submit the following documents along with the request

for release of the eligible and approved grant-in-aid within 18 months from the date of

issue of the approval letter:-

a) Chartered Accountant (CA) certificate- Latest certificate of actual expenditure on the

project along with means of finance in the prescribed format duly certified by

Chartered Accountant (CA) and countersigned by the applicant, which should

establish that 100% of the promoter’s contribution, 100% of the term loan and 100%

of the approved Grant-in-aid has been utilized in the project.

Details of unsecured loan (along with PAN numbers of lenders), if any, duly certified

by Chartered Accountant and countersigned by the applicant to be furnsihed.

b) Certificate from Chartered Engineer (Civil) for technical civil works indicating item

wise progress on approved components, cost, quantity, manufacturers/suppliers

and comment on quality and status of implementation duly countersigned by the

applicant.

c) Certificate from Chartered Engineer (Mechanical) for Plant and Machinery indicating

item wise progress, cost, quantity, manufacturers/suppliers and comment on quality

and status of implementation duly countersigned by the applicant.

d) Certificate from the concerned bank/ financial institution which has sanctioned

term loan for the project, certifying that:-

i. It has disbursed 100% of the term loan of the total sanctioned term loan; and

ii. Has no objection for disbursement of 100% of the grant-in-aid being released by

the Ministry.

e) Bank Statement(s) –Certified bank statements of all accounts from where payments

are received and made till date of completion of 100% of the project cost as per

implementation schedule and highlighting payments (including advance payments)

made to suppliers/vendors/contractors.

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f) Major invoices/receipts from suppliers/vendors (on eligible project expenditure

incurred so far).

g) Declaration of completion of the project and start of commercial operation, to be

furnished in form of the following documents:

i. 'Consent to Establish (CTE)'- issued by the State Pollution Control Board

ii. 'Consent to Operate (CTO)'- issued by the Town Planning Authority

iii. 'Commissioning Report' issued by Chartered Engineer (Mechanical).

h) Display of information prominently on the front of the project building/production

area stating that the “Project is assisted by the O/o Development Commissioner-

Handicrafts, Ministry of Textiles, Government of India”.

i) Any other condition which may be specified from time-to-time.

6. Implementation Schedule and Penalty

6.1. The implementation schedule for the project would be 18 months from the date of

issue of the approval letter for the financial assistance. No extension of time for

implementation of the project will be given. In exceptional circumstances, for the

reasons beyond the control of the promoter(s), the implementation period may be

extended with the approval of the O/o DC Handicrafts.

6.2. In case of non-implementation of the project as per the approval letter, the O/o DC

Handicrafts would have the discretion to cancel the approval granted to the project and

to recall the grant, if any, released, with interest @ 10% per annum.

6.3. In case of failure to operate the project for at least three years after commencement of

commercial operation, the beneficiary shall return the entire grant-in-aid with interest

@ 10% per annum.

6.4. In case of the failure of the beneficiary to refund the grant-in-aid amount with interest,

in the event of non-implementation of the project as approved and / or utilization of

the grant for purposes other than on the approved components, the due amount shall

be recovered as an arrear of land revenue as per the relevant law in force.

6.5. In case of any dispute arising out of interpretation of any of the terms and conditions as

contained in the Scheme Guidelines and/or Approval Letter, the interpretation and

decision there on of O/o DC Handicrafts shall be final and binding.

6.6. The O/o DC Handicrafts may seek any clarification and/ or any document/ information

at any stage of the project. The O/o DC Handicrafts reserves the right to modify the

Scheme Guidelines or any other terms and conditions as contained herein.

6.7. If at any point of time, it comes to the notice of the O/o DC Handicrafts that the grant

has been availed by manipulation/ concealment of information/ facts, the same shall

be withdrawn immediately and the amount, if any, released shall be refunded along

with interest at the rate of 10% per annum.

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6.8. The assets created wholly or substantially out of the Government Grant shall not be

disposed-off or encumbered or utilized for purposes other than those for which the

grant has been sanctioned, without obtaining the prior approval of the O/o DC

Handicrafts. In case of non-compliance of this condition, the beneficiary will be liable to

refund the grant with interest @ 10% per annum. In case of the failure of the

promoter(s) to refund the grant-in-aid amount with interest, the due amount shall be

recovered as an arrear of land revenue as per the relevant law in force.

6.9. User charges/hiring rates of the facilities created under the project will be placed in the

public domain by uploading the same on the website of the project/organization. A

copy of the same will also be made available to the O/o DC Handicrafts.

6.10. The beneficiary(s) of the completed projects will submit the following documents every

year to the O/o DC Handicrafts for next three (3) years from the date of release of the

approved grant:-

a) Audited Annual Financial Statement of the entity showing balance sheet, profit &

loss account, schedule and notes to accounts of the project.

b) Percentage capacity utilization of the upgraded production facilities.

7. Documents required for submission of application

7.1. Following documents are required to be submitted with the application:

a) Detailed Project Report (DPR) in the prescribed template as at Appendix-II.

b) In-principle or Final term loan sanction from the Bank/ Financial Institution.

c) A detailed appraisal note from the Bank / Financial Institution.

d) Certificate of incorporation/ registration of the applicant firm, Memorandum and

Articles of Association in case of Company/ Bye laws of the Society, Co-operative,

Self Help Group/ Registered partnership deed, etc.

e) Bio-data/background/ experience of the project applicant(s).

f) Annual reports and Audited Financial Statement of Accounts of the applicant

firm/company/proprietorship/ partnership, etc. for last three years.

g) Self attested English/ Hindi version of land documents in support of land title in the

name of the applicant or land lease, duly registered with the competent authority

for not less than the period of 20 years.

h) Quotations from the suppliers of Plant & Machinery and equipment, etc. for the

project.

8. Selection of Proposals for Financial Assistance

8.1. All proposals received against EoI will be scrutinized to ascertain prima-facie eligibility and

Proposals found eligible will further be appraised/ evaluated by the O/o Development

Commissioner (Handicrafts) for selection.

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8.2. The proposals found prima facie eligible based on the basic eligibility criteria mentioned

in para 3 above will be evaluated as per the following assessment criteria:

a) Availability of appropriate land for setting up the proposed machinery and

equipments

b) Credit-worthiness/ net worth of the applicant

c) Project ROI/IRR as per the Financial Appraisal Note from the Bank/ Financial

Institution

d) No of artisans engaged by the applicant

e) Overall experience in manufacturing and production of wooden and iron handicraft

products

f) Proposed investment in machinery and equipment

9. General terms

9.1. The O/o DC Handicrafts shall have the final say regarding eligibility or otherwise of the

proposals and selection of proposals for grant-in-aid.

9.2. An annual audit will be conducted for all the approved projects by PAMC suggested

government body

9.3. Submission of false information or concealment of information by IA shall attract

penalty and / or legal action as decided by PAMC.

10. Procedure for Submission of Expression of Interest (EoI)

10.1. One sealed envelope continuing the Application/Proposal along with the supporting

documents mentioned in para 7.1 above in CD along with two hard copies of the same

duly sealed for submission to: The Development Commissioner (Handicrafts), Ministry of

Textiles, Government of India, West Block-7, R. K. Puram, New Delhi-110 066. Tel: 011-

26191569, Fax: 011-26163085. The envelope should be clearly marked ‘Application for

Technology Upgradation for Individual Exporters under Jodhpur Megacluster Scheme’.

10.2. The last date of submission of EOI, in sealed envelopes, to this office is 31st March 2017

latest by 15.00 hrs, along with all supporting documents.

11. Rights of Ministry of Textiles

11.1. The Ministry of Textiles reserves the right to accept / reject the proposals received

without assigning any reasons whatsoever, or may call for any additional information /

clarification, if so required.

12. Court Jurisdiction

12.1. This shall be subject to the exclusive jurisdiction of courts at Delhi/New Delhi

13. Miscellaneous

13.1. In case any further clarification or information is required following may be contacted:

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Assistant Director (Megacluster), Office of the Development Commissioner

(Handicrafts), Ministry of Textiles, Government of India, West Block-7, R. K. Puram,

New Delhi-110 066. Tel: 011-26177790, Fax: 011-26163085, email : dchejs@nic.in,

praisaxena@gmail.com

Mr Saurabh Dey, IL&FS Clusters, 2nd Floor, NTBCL Building, DND Flyway, Noida-

201301. Tel: 0120-2459200, 09650560598, Fax: 0120-2459201,

email:Saurabh.Dey@ilfsindia.com

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Appendix 1 – Suggested List of Machinery

Equipment for Seasoning and Treatment of Wood

S. No

Machinery Name Utility

1.1 Chemical Treatment Plant

Treat wood against biological degradation

1.2 Seasoning Kiln

Drying of Timber

Equipment for Planing of wood

S. No

Machinery Name Utility

2.1 Auto double surface planer

Smoothening and planing of wood

2.2 Four side planer

Smoothening and planing of wood

2.3

Spiral cutterhead planer

sander

Planer and sander

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2.4 Oscillating belt edge sander

sanding the edge of work piece

2.5 Horizontal sponge sander

suitable for sanding curved workpiece surfaces or irregular curved workpieces

2.6 Vertical sponge sander

suitable for sanding flat or curved edges of work pieces

Equipment for Jointing of Wood

S. No

Machinery Name Utility

3.1 Continuous Dovetailer

Cuts dovetailed tenons/mortises simultaneously for accurate jointing

3.2 Drill and boring machine

For drilling in to metal or wood

Equipment for Sizing of Wood

S. No

Machinery Name Utility

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4.1 Sliding Panel saw

Sliding table saw

4.2 Automatic copy shaper

Finishing for curved edge furniture components

4.3 Radial arm saw

Cutting wood

4.4 Straight line rip saw

Cutting wood

4.5 Band saw

Cutting wood

4.6 Pneumatic cross cut-off saw

Cutting wood

4.7 Spindle shaper

Cutting wood at an angle

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4.8 High speed router / pin router

Smooth and accurate cutting of wood

4.9 Sliding table saw

Panel cutting of wood

4.10

Tool grinder

machine combines the functions of external grinder and cutter grinder

4.11

Dust collector

for collecting dust particles

4.12

Universal circular saw

cutting the solid wood

4.13

Wood turning lathe

customize and create wood products

Equipment for Tenonering/Mortising of Wood

S. No

Machinery Name Utility

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5.1 Rectangular tenoner

Design a tennon to be inserted into a mortise

5.2 Oscillation mortiser

Cuts square or rectangular holes in the wood

Equipment for Assembly

S. No

Machinery Name Utility

6.1 Auto glue spreader

Automatic, uniform and continuous gluing

6.2 Hydraulic clamp carrier

Holds wood panel flat and horizontal

6.3 Mig welding machines

Welds light guage material or thick plates

6.4 Spot welding machines

for welding particular types of sheet metal

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6.5 Auto copy carving lathe

customize and create wood products

Equipment for Finishing of final product

S. No

Machinery Name Utility

7.1 Compressor

7.2 Spray guns

for applying a coat of paint on finished good

7.3 Spray Booth

Spray painting at low volumes

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Appendix 2- DRP format

A. Project Proposal:

a) Executive Summary

b) Applicant’s composition and members’ background

c) Proposed Activities

d) Manpower planning(including organization chart)

e) Technological Considerations (e.g. selection of lab equipments & Production

machinery, miscellaneous fixed assets details, etc.)

f) Infrastructure details (e.g. land and site description, civil engineering and structural

works details)

g) Marketing and Liaison Plan

h) Project Cost detailing

i) Recurring expense detailing (for at least 5 years)

j) Expected Revenue generation (for at least 5 years)

k) Financial appraisal (Profit & loss statement, balance sheet, cash flow for 5 years,

break even period, return on equity, etc.)

l) Requirement of statutory clearances

m) Project Implementation schedule

n) Deliverables with objectively measurable targets (wherever possible)

o) Benefits to cluster

B. Project Financials:

a) Proposed Means of Finance:

1. IA’s share

2. Funds required under CHCDS

C. Attachments to be furnished

1. Memorandum & article of association of Applicant

2. Ownership details of Applicants:

a. Incorporation details and documents

b. Registration Certificate with local Central Excise authority

c. Income Tax return for last financial year along with PAN number

d. Sales tax / VAT payment receipts for last financial year

e. Annual Report (latest financial year)

f. Audited financial statements (for last 3 financial years)

g. Any other document establishing the credential of the applicants

3. Certificate by a technical expert verifying / vetting the technical feasibility of the

project

Note: The approval committee reserves the right to ask for any other supporting documents

pertaining to the project report, if required