In an ambitious target to create state-of-the-art grain storage facilities across the country, the government would construct silos with a total capacity of around 10 million tonne through private sector participation in the next three years.
Sources told FE that silos with a capacity of 25,000 tonne to 50,000 tonne would be built for the storage of grain by the Food Corporation of India (FCI). The food ministry will be creating silos with capacities of 3.5 million tonne each year for the next three years starting April, 2016.
The cost of creating a 50,000-tonne capacity silo is estimated at R40 crore. A food ministry official said that cost of construction of silos would go down once more private players start investing in the project.
At present, FCI has silos with total capacity of about 6 lakh tonne while another one lakh tonne of grain storage capacities would be added within next few months.
The proposed silos will be constructed based on three models — VGF, without the VGF cover and through the Central Warehousing Corporation/Central Railside Warehousing Corporation/ state government-owned agencies.
Under the VGF (viability gap funding) plan, silos would be constructed on the FCI land while the corporation would provide guarantee of rentals for 30 years for silo operation for the private sector to recover capital investment and maintenance charges. Besides, there is a provision for 20% VGF from the government as per infrastructure projects norms. All the silos will have the facility of ‘railway siding’ for easier transportation of grain.
In case of the non-VGF norm, the private sector would create silos on its own land while FCI would provide guarantee of rentals for grain storage for 30 years while silos owned by state government-owned agencies like CWC would used by FCI for grain storage.
In the current fiscal, FCI has entrusted the private players such as Adani Agri Logistics (AAL), LT Overseas and OM Metals for creating one lakh capacity silos after getting VGF nod from the finance ministry.
“As the FCI does not have adequate land for creation of silos, we are looking at non-VGF model for construction of silos by private sector,” an official told FE.