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FCI floats tender to build silos, private investment seen at Rs 720 cr

The FCI will use the silos for storage of wheat through a lease of thirty 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. This fixed charge escalates by 70% of the wholesale price index and 30% of the consumer price index.

For the first time, two rice silos with a combined storage capacity of 25,000 tonne are currently being built at Buxar and Kaimur in Bihar by private entities for FCI on a pilot basis.
For the first time, two rice silos with a combined storage capacity of 25,000 tonne are currently being built at Buxar and Kaimur in Bihar by private entities for FCI on a pilot basis.

The Food Corporation of India (FCI) has floated tenders to build one million tonne (MT) capacity silos in 14 locations from the private sector under design, build, finance, operate and transfer model.

Sources said the estimated private investment in these silos for wheat storage will be around Rs 720 crore. The facilities will be built in Uttar Pradesh (0.52 MT), Punjab (0.15 MT), Maharashtra (0.12 MT), Gujarat (0.08 MT), Rajasthan (0.07 MT) and Bihar (0.05 MT).

Currently, around 2.8 MT capacity silos are under various stages of construction and the corporation aims to build close to 11 MT of silos capacity for storing wheat in the next four to five years.

The FCI will use the silos for storage of wheat through a lease of thirty 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. This fixed charge escalates by 70% of the wholesale price index and 30% of the consumer price index.

Earlier, the food ministry has approved a policy which encourages the private players to bid for construction of 249 state-of-art silos with close to 11 MT wheat storage capacity for the FCI. The silos are being built across 12 states, including Punjab, Haryana, Madhya Pradesh, Maharashtra, Haryana and Kerala, over the next four to five years through the public-private partnership (PPP) model with a total estimated investment of Rs 9,200 crore.

For the first time, two rice silos with a combined storage capacity of 25,000 tonne are currently being built at Buxar and Kaimur in Bihar by private entities for FCI on a pilot basis.

Sources told FE that ‘through bundling of projects’, the food ministry has removed an earlier clause which used to restrict large private players or consortium from participating in bidding for a number of projects for construction of silos.

Officials say that the upper ceiling for bidding by any single entity or consortium for construction of silos was 15% of the locations or the storage capacity.

Food ministry officials say that if food grains are stored in silos and transported in bulk, losses due to theft, pilferage and transportation would be negligible compared to the food grains stored in warehouses.

Meanwhile, in a major initiative to eliminate storage losses of foodgrains, FCI will discontinue the practice of storing wheat in uncovered facilities from September this year to augment covered storage facilities and ensure direct transfer of grains from procurement centres to the states for public distribution.

FCI stores around 50 MT to 60 MT of rice and wheat at any given point of time. Silos ensure better preservation of foodgrains and enhances the shelf life.

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