Plans afoot to build 3.4-mt silos under PPP mode

The ministry on Thursday said surplus government land has already been identified for building silos at 33 locations in Punjab, Madhya Pradesh, Uttar Pradesh and Gujarat.

The entire project is estimated to cost Rs 9,200 crore.

The country’s food grain storage infrastructure is being given a boost. The food ministry has set in motion a plan to construct silos with a combined capacity to store 3.4 million tonne (mt) grains at 80 locations across the country. The projects will be implemented under the public private partnership (PPP) mode.

The ministry on Thursday said surplus government land has already been identified for building silos at 33 locations in Punjab, Madhya Pradesh, Uttar Pradesh and Gujarat.

The silos are being built under the design, build, fund, own and transfer (DBFOT) mode, where the land is owned by Food Corporation of India and via the design, build, fund, own and operate (DBFOO) model, where land belongs to private entities.

This is part of a larger project to build wheat silos with 11-mt capacity during the next four-five years under the PPP mode, across 249 locations in the country, under a new ‘hub and spoke’ mode. The entire project is estimated to cost Rs 9,200 crore.

Hubs have a dedicated railway siding and container depot facility, while the transportation from spoke to hub is undertaken through road, and from hub to hub via rail.

The Food Corporation of India (FCI) had floated a tender in April for the construction of 14 locations under the DBFOT mode, with combined capacity of 1 mt. In the second phase, a tender for construction of 66 silos with 2.47-mt capacity was floated under DBFOO in June.

The silos are being built across 12 states, including Punjab, Haryana, Madhya Pradesh, Maharashtra, Haryana and Kerala, under the PPP model, with a total estimated investment of Rs 9,200 crore.

The FCI will use the 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. This fixed charge escalates by 70% of the wholesale price index and 30% of the consumer price index.

“As land acquisition becomes the most crucial part of the DBFOO project and in order to facilitate the availability of land to the concessionaires, this ministry took up the issue of identification of suitable surplus land, if any, with the concerned state governments,” according to the statement.

Sources said 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.

As part of a pilot initiative, 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 the FCI.

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 food grains, the 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.

The FCI stores around 50-60 mt of rice and wheat at any given point of time. Silos ensure better preservation of food grains and enhance the shelf life.

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