Grain silos project on, FCI plans tender next month

Written by Sandip Das | New Delhi | Updated: Jan 30 2013, 08:09am hrs
The Food Corporation of India (FCI) will call for a tender next month for 2-million tonne capacity silos to be built through public-private partnership across ten states. The move comes at a time when the Planning Commission had expressed reservation on the FCIs insistence on making railway-siding mandatory for silos (modern foodgrain storage facilities).

Our partner Crisil Infrastructure Advisory is in the process of developing technical and financial specifications prior to launching of the tenders, an FCI official told FE. The Planning Commission believes the construction of 'railways siding' would increase the cost of project, which would be unattractive to the private players. Under the proposal approved by an empowered group of ministers (EGoM) earlier last year, the private players would put in money, while the FCI would take silos on rent for grain storage for 30 years. However, in case of private players seeking viability gap fund and lands for silos from the state governments, it would give rent to silo operators for grain storage for 10 years.

Without the rail connectivity, the foodgrains would have to be carried by trucks, increasing the risk of deterioration, the official added.

Silos with 50,000-tonne and 25,000-tonne capacities are set to be built at 42 locations across 10 states, including Bihar, Haryana, MP, Assam, UP, Gujarat, Punjab and Haryana.

Official sources said for creation of 50,000-tonne capacity silos, around seven acre of land is required while the 25,000-tonne capacity silos would need five acre land.

In 2008, under a pilot project, the FCI had entered into a build-own-operate (BOO) agreement for 20 years with Adani Agri Logistics for setting up two silos with a capacity of more than 5,00,000 tonne at Moga in Punjab and Kaithal in Haryana.

Adani's has since invested R650 crore for building 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.