The Food Corporation of India (FCI) has identified private sector players who would be building around 25 silos with 1.3 million tonne (MT) combined capacity within next two years.
Sources told FE that out of 29 private players who participated in the bidding process for building 26 silos with storage capacities of 25,000 tonne and 50,000 tonne wheat storing capacity each, companies such as National Collateral Management Services, Adani-Agri Logistics, Om Metal etc have been identified for building these silos located across 11 states. The states where silos would come up include Punjab, Haryana, Uttar Pradesh, Maharashtra, Madhya Pradesh, West Bengal and Karnataka. Bid for only one location could not be considered because of technical issues.
Sources also said that these modern grain storage facilities or silos would be constructed under the Design, Build, Finance, Own and Operate (DBFOO) model where the private parties would put in money for building these facilities on their own land while FCI hires these silos for storage of grain for 30 years.
An official said these 25 silos would be built in addition to 2.5 lakh tonne capacities of silos currently being built at six locations — Sahnewal (50,000 tonne) and Kotkapura (25,000 tonne) — Punjab, Narela (50,000 tonne) — Delhi, Katihar(50,000 tonne) — Bihar, Changsari (50,000 tonne) — Assam and Whitefield (25000 tonne) – Karnataka. These storage facilities are being built on the land owned by the FCI through Viability Gap Funding (VGF) model. Under the DBFOO model, the private parties can not avail VGF as per infrastructure projects norms.
In the current fiscal, FCI in collaboration with state governments is expected to award contracts for creation of 3.6 MT of silos capacities. The corporation has set an ambitious target of creation of 10 MT of silos capacities by the end of FY20. The FCI handles around 50 – 55 MT of wheat and rice annually.
The FCI official said that benefits expected from the 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. The construction of silos would be completed within next two years. “Silos take much lesser area than the conventional storage facilities,” the official said.
The official also said that a phase wise approach has been adopted for ensuring that 10 MT of silos capacity in 4-5 years. “By then we have the flexibility to limit the construction of silos to capacity that is actually needed and financially viable,” the official said.
The high-level committee chaired by former food minister Shanta Kumar last year had recommended that FCI should outsource its stocking operations to various agencies such as CWC, State Warehousing Corporation and private companies under the Private Entrepreneur Guarantee scheme. State governments were also urged to build silos with help from private firms.