FCI silo project fetches response from 21 firms

By: | Published: June 9, 2015 12:10 AM

The Food Corporation of India’s (FCI) attempt to create state-of-the-art foodgrain storage facilities — silos — through private sector...

The Food Corporation of India’s (FCI) attempt to create state-of-the-art foodgrain storage facilities —  silos — through private sector participation has evoked interest among various companies.

Sources told FE that 21 private players, including Adani Agri Logistics, L T overseas and OM Metals, have evinced interest in setting up silos on behalf of FCI at six locations spread across Punjab, Delhi, Bihar, Assam and Karnataka.

Silos with a capacity of 50,000 tonne each at four locations and 25,000 tonne grain capacity each at two locations would be created through private sector participation at Sahnewal and Kotkapura (Punjab), Narela (Delhi), Katihar (Bihar), White-field (Karnataka) and Changsari (Assam).

Sources also said that in all 92 tenders have been received from various private sector companies. At present the tenders are being evaluated by the FCI.

The FCI would  provide guarantee of rentals for 30 years for silo operation by the private companies.  There is also a provision for 20% viability gap funding (VGF) from the government as per infrastructure projects norms.

Under the Design Build Finance Operate Transfer norms, private developer is responsible for development of the project and FCI will provide land for building the silos.

“Silos take much lesser area than the conventional storage facilities,” an official said.

Benefits expected from the creation of silos through private sector participation  are timely delivery, optimum capital cost and efficient operations of project with minimal risk and involvement of implementing agency, the official said.

FCI had conducted feasibility studies for creation of silos across 11 locations out of which eight locations were shortlisted for final bidding. Two sites –  Kila Raipur (Punjab) and Pune (Maharashtra) were given to state government agencies.

After scrapping the tender for building 2 million tonne capacity silos across country last year, FCI had commissioned a feasibility study to build silos through private sector participation.

The high-level committee chaired by former food minister Shanta Kumar, which had recommended that FCI should outsource its stocking operations to various agencies such as Central Warehousing Corporation, State Warehousing Corporation and private companies under the Private Entrepreneur Guarantee scheme. State governments were also urged to  build  silos with help from private firms.

The committee report had noted that creation of silos should be done on competitive-bidding basis, inviting various stakeholders and creating competition to bring down costs of storage.

Last year, FCI had scrapped its attempt to build 2 mt capacity silos at 36 locations because of lack of participation from private sector.

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