Plan panel, ministry differ over silo project

Written by Sandip Das | New Delhi | Updated: Nov 22 2012, 08:52am hrs
Differences have cropped up between the Planning Commission and food ministry on the issue of creation of two million tonne capacity silos through the public- private partnership (PPP) mode.

Sources say while Food Corporation of India (FCI), the nodal agency to implement the project, has been insisting on making 'railway siding' mandatory for silos, the Planning Commission believes that the construction of railways siding would increase the cost of project which would be unattractive to the private players.

An Inter-ministerial group which meet on Monday could not resolve the issue. FCI maintains that railway siding at silos would ensure that grain are not untouched and stored scientifically till they reach the distribution centres across the country and in the absence of railway network, the grain has to be transported through trucks and had to packed manually.

When contacted, food minister KV Thomas said discussions are on to resolve all issues. As per the proposal approved by an EGoM earlier in February this year, the private players would put in money, while FCI would take silos on rent for grain storage for 30 years.

In case of private players seeking viability gap fund and lands for silos from the state governments, FCI would give rent to silos operator for grain storage for 10 years. Silos with 50,000 tonne and 25,000 tonne capacities is slated to be built at 42 locations across 10 states. An EGom on food in February this year cleared the proposal of creation of silos in states including Bihar, Haryana, MP, Assam, UP, Gujarat, Punjab and Haryana.

Experts say that for creation of 50,000-tonne capacity silos, around seven acre of land is required while for 25,000-tonne capacity, about five acre land is required.

In a pilot project, FCI had entered into a build-own-operate (BOO) agreement for 20 years with Adani Agri Logistics, an arm of the of Adani Group, for setting up two silos with a capacity of more than 500,000 tonne at Moga in Punjab and Kaithal in Haryana in 2005 and silos started operations in 2008. Adani's has since invested R650 crore for building the two base silos and five field depots (at Chennai, Coimbatore, Bangalore, Navi Mumbai and Hooghly).

To augment grain storage, FCI and the Central Warehousing Corporation are in the process of building 15 mt capacities over the next five years. In the current fiscal, FCI would create an additional 3 million tonne capacity.

FCI procures and distributes grain under the targeted public distribution system and maintains buffer stocks and strategic reserves. It has a capacity of 61 mt, which includes 18 mt of CAP (cover and plinth) capacity that cant keep the grain intact for more than a few weeks.