The Food Corporation of India (FCI) would soon call the tender for awarding contracts for construction of 3.5 million tonne (MT) of state-of-the-art wheat silos under the public private partnership (PPP) model.
Sources told FE 40 silos with cumulative capacity of 2 MT have been built while contracts for building over 4 MT of modern storage facilities across 85 locations have been awarded. Currently contracts for the construction of these silos have been awarded to several private entities including Adani Agri Logistics and KCC Infrastructure.
“In the next couple of years total wheat silos capacity would cross 6 MT,” an official said.
This is part of a Rs 11,000 crore project to build wheat silos with 11 MT of capacity during the next four years under the PPP mode. These silos are spread around 250 locations across Punjab, Haryana, Madhya Pradesh, Uttar Pradesh, Rajasthan, Gujarat, Maharashtra, Bihar, West Bengal, Jammu, Uttarakhand and Kerala.
Currently, the silos are being built under the design, build, fund, own and transfer (DBFOT) mode, under which the land is owned by the FCI and via the design, build, fund, own and operate (DBFOO) model, under which land belongs to private entities.
The corporation will use these silos for storage of wheat through a lease of 30 years with private entities. Fixed storage charges to be paid by the FCI to private entities, based on a per-tonne, per-year basis, are the bidding parameters.
In 2005, under a pilot project to modernise storage infrastructure, construction of 0.5 MT of wheat silos at 20 locations under the build, own and operate (BOO) model was carried out by Adani Agri Logistics.
Estimated cost of construction of 1 MT silos is around Rs 1000 crore. Silos are sub-mandi yards, which could bring ease of procurement of grains for farmers and lead to significant reduction in logistical costs.
Meanwhile, the country’s first silos of 25,000 tonne capacity for storing rice built under a PPP model in Buxar, Bihar have been commissioned by FCI. Another rice storage facility in Kaimur, Bihar will be completed shortly. Officials said these two silos are built by the National Commodity Management Services Ltd (NCML) under the DBFOT.
This is part of the government’s pilot project to set up steel silos for rice to prevent cereal wastage during storage. Officials said that technology for silos to store rice is still being developed, as at these facilities, the grain has to be stored at 15 degrees Celsius.
The FCI stores on an average 40 – 50 MT of rice and wheat annually for ensuring supplies to beneficiaries under the National Food Security Act. Silos ensure better preservation of food grains.
On recommendation of a high-level committee chaired by former food minister Shanta Kumar in 2015, construction of silos with railway sidings commenced. Then the food ministry approved a ‘hub and spoke’ model because of challenges faced in land acquisition for railway sidings.