FCIs grand plan for silos finds few takers, shelved

Written by Sandip Das | New Delhi | Updated: Aug 2 2014, 05:56am hrs
Food Corporation of India's plan to attract private investment to set up three dozen state-of-the-art silos across the country has come a cropper. While no bidder came forward for some of these, in case of most projects tendering resulted in receipt of one bid each, forcing the corporation to scrap the whole process.

In November 2013, FCI had floated tenders from the private sector to construct 1.75 million tonne capacity silos to be set up at 36 locations spread across nine states Bihar, Haryana, Punjab, Madhya Pradesh, West Bengal, Assam, Kerala, Maharashtra and Uttar Pradesh. The silos were to be constructed under the Design Build Finance Own and Operate (DBFOO) model, with assured rail connectivity.

In early 2013, an empowered group of ministers (EgoM) had approved the plan, under which FCI would take silos set up by the private players on rent for grain storage for 30 years.

However, in case of private players seeking viability gap fund and land from state governments, the FCI would give rent to the silos operator for 10 years.

In a recent communication to about 50 private bidders who participated in the tenders, FCI has said the process has been cancelled by the competent authority due to lack of sufficient number of responsive applications.

Sudhir Kumar, secretary, department of food, had earlier called it one of the most significant projects in the food sector and a step towards modernization of foodgrain storage logistics.

At present FCI, along with state government-owned agencies, has covered foodgrain storage capacity in excess of 57.5 million tonne. Besides, the corporation has 7.5 million tonne covered and plinth (CAP), where foodgrain can be stored only for a limited period. At the start of this month, FCI had foodgrain stock of 67 million tonne.

In 2008, under 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 5,00,000 tonne at Moga in Punjab and Kaithal in Haryana.

Adani Group has since then invested R650 crore for building the two base silos and five field depots (at Chennai, Coimbatore, Bangalore, Navi Mumbai and Hooghly).