The government’s move to build state-of-the-art grain storage facilities – silos – through private sector participation has gathered momentum.
Food Corporation of India (FCI) has received 145 bids from 29 private players for construction of another 26 silos with a combined 1.3 million tonne (MT) capacity across 11 states. A few months back, FCI awarded contracts for setting up six silos for storing wheat with combined capacity of 2.5 lakh tonne by Adani Agri Logistics, LT Overseas and OM Metals, among others.
Each of the silos has capacity to store 25,000-50,000 tonne of grain. Sources said silos are being constructed with an estimated cost of Rs 42-45 crore for 50,000-tonne capacity.
Sources told FE that these modern grain storage facilities would be constructed under the design, build, finance, own and operate (DBFOO) model where private parties would put in money while FCI hires these for 30
years. “The evaluation of bids received is currently under way, we will be soon awarding contracts for construction of silos,” an official said.
The official said 2.5 lakh capacity silos are currently being built at six locations on FCI land, while under the DBFOO model, silos would be built on land owned by private parties. Besides, under the DBFOO, private parties cannot avail of viability gap funding (VGF) as per infrastructure projects norms.
State-owned Central Warehousing Corporation is currently constructing a 50,000 tonne silo in Nabha, Punjab.
The Madhya Pradesh government has completed construction of 4.5 lakh tonne capacity silos at nine locations, while the Punjab government has proposed to construct 1.6 million tonne.
In the current fiscal, FCI in collaboration with state governments is expected to award contracts for creation of 3.6 MT of silos. The corporation has set an ambitious target to create 10 MT of silos by the end of FY20. The FCI handles around 50 – 55 MT of wheat and rice annually.
Under the plan, silos are being built by FCI on privately-held land while the corporation would provide guarantee of rentals for 30 years for the private sector to recover capital investment and maintenance charges.
The FCI official said that benefits expected from creation of silos through private sector participation are timely delivery, optimum capital cost and efficient operations of project with minimal risk and involvement of implementing agency. Construction of silos would be completed in two years.