1. FCI initiates feasibility study for modern silos

FCI initiates feasibility study for modern silos

After scrapping tender for building two million tonne capacity silos across country last year, the Food Corporation of India...

By: | Published: February 3, 2015 12:13 AM

After scrapping tender for building two million tonne capacity silos across country last year, the Food Corporation of India (FCI) has commissioned a feasibility study to build state-of-the-art grain storage facilities across six states through private sector participation.

Sources told FE that the work for preparing ‘feasibility study’ for building 11 silos with 25,000 tonne storage capacity each has been entrusted to Kolkata-based Srei Infrastructure Finance.

The locations where the silos are expected to come up are — Changsari (Assam), Pune (Maharashtra), White-field & Bellary (Karnataka), Narela (Delhi), Kila Raipur, Kotkapura, Sahnewal & Patiala (Punjab), Buxar & Katihar (Bihar).

Sources said that silos would be built in collaboration with private sector participation through viability gap funding system. Officials said that the agency has been asked to submit feasibility report in the next six weeks.

FCI has initiated process for building silos following the recent reports by a high-level committee chaired by former food minister Shanta Kumar, which has recommended that FCI should outsource its stocking operations to various agencies such as Central Warehousing Corporation, State Warehousing Corporation, private sector under Private Entrepreneur Guarantee (PEG) scheme, and even state governments that are building silos through private sector’s help on state lands (as in Madhya Pradesh).

The committee report recently submitted to Prime Minister Narendra Modi also noted that creation of silos should be done on competitive bidding basis, inviting various stakeholders and creating competition to bring down costs of storage.

“Covered and plinth (CAP) storage should be gradually phased out with no grain stocks remaining in CAP for more than 3 months. Silo bag technology and conventional storages where ever possible should replace CAP,” the committee had stated..

Last year, FCI had scrapped its attempt to build two million tonne capacity silos at 36 locations because of lack of participation from the private sector.

“While no bidder came forward for some of silo projects, in case of most projects tendering resulted in receipt of one bid each, forcing the corporation to scrap the whole process,” a food ministry official had said.

Sudhir Kumar, secretary, department of food, had last year called attempt to built silos as “one of the most significant projects in the food sector and a step towards modernisation of foodgrain storage logistics”.

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

Adani Group has since then invested R650 crore for building the two base silos and five field depots at Chennai, Coimbatore, Bangalore, Navi Mumbai and Hooghly.

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