Large silo in West Bengal lying unused

By: | Updated: September 28, 2015 11:35 AM

While inadequate storage facilities are blamed for wastage of grains, one state-of-the-art silo built by the Adani Group at Hooghly in West Bengal has been lying unused since January, 2014.

AAL, one of the pioneers from the private sector in creating modern storage units for agriculture produce, has seven silos, built at a cost of Rs 650 crore. (Representative image)AAL, one of the pioneers from the private sector in creating modern storage units for agriculture produce, has seven silos, built at a cost of Rs 650 crore. (Representative image)

While inadequate storage facilities are blamed for wastage of grains, one state-of-the-art silo built by the Adani Group at Hooghly in West Bengal has been lying unused since January, 2014. The 25,000 tonne storage facility, spread along half a kilometre on a linear stretch of railway land, is languishing as the national transporter suddenly discovered about two years ago that Adani’s land lease can’t be renewed.

According to the railways, the silo was not supposed to be built on the land which was given to Adani Agri Logistics (AAL) on a short-term (four year) lease. AAL, one of the pioneers from the private sector in creating modern storage units for agriculture produce, has seven silos, built at a cost of Rs 650 crore.

While the other five are operating, the Hooghly facility can’t be used by the Food Corporation of India due to the railways’ refusal to renew the lease. Had the silo been in use, the FCI’s grain handling costs would have reduced  significantly. Although the silo’s capacity is to store  25,000 tonne of wheat, FCI could store some 70,000 tonne of PDS grain in it annually with replenishments.

In 2008, the FCI had entered into a build-own-operate (BOO) agreement for 20 years with AAL, for setting up two silos with a capacity of more than 5,00,000 tonne each at Moga (Punjab) and Kaithal (Haryana).Besides, five field silos with 25,000 tonne capacity each were also built by the firm at Chennai, Coimbatore, Bangalore, Navi Mumbai and Bandel (Hooghly).

Food ministry officials say that they have been taking up the issue with the railways with a request to extend the Bandel land lease agreement so that the  20-year contract with AAL is not disrupted. “Alternatively, we have also suggested to the railways that the land lease should be transferred to the FCI or state warehousing corporation or any other government-owned agency instead of AAL so that it could be used for storage of wheat,” a food ministry official said. Under this arrangement, AAL can get the rentals for the silo and  the railways could be paid by the FCI for land use.

Grains can be stored in silos for much longer periods compared to conventional storage facilities, without any quality deterioration. The FCI is holding grain stocks far higher than the buffer stocks prescribed.

A major chunk of FCI’s grain stocks is stored in conventional facilities such as Cover and Plinth (CAP) where grain cant be stored for more than 6-8 months.

An AAL official told FE that the FCI has stopped paying rent to Adani for the Hoogly facility. As per the twenty-year agreement between AAL and FCI, the state-owned procurement agency needs to pay Rs 2,000 per quintal per annum to the firm. This includes storage as well as transportation costs.

Meanwhile, in a bid to create more silos, FCI had invited bids from the private sector for construction of these facilities at six locations spread across Punjab, Delhi, Bihar, Assam and Karnataka. These include silos with 50,000 tonne capacity each at four locations and two 25,000-tonne capacity facilities.

Working in Silos:

* FCI unable to use silo built by Adani Agri Logistics in Hooghly as railways refuses renewal of land lease
* Railways now says silo wasn’t supposed to be built on land given to AAL on four-year lease
* Food ministry requests railways to extend lease so that FCI’s 20-year contract with AAL isn’t disrupted
* It also suggests should Railways deem it fit, it can transfer the lease to FCI or a govt agency instead of AAL

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