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  1. Private firms to build 6 silos with 2.5 lakh tonne capacity

Private firms to build 6 silos with 2.5 lakh tonne capacity

The Food Corporation of India (FCI) has awarded contracts to three private firms for creation of six silos with a combined capacity of 2.5 lakh tonne. These silos would be used for storing wheat.

By: | New Delhi | Published: April 7, 2016 12:05 AM

The Food Corporation of India (FCI) has awarded contracts to three private firms for creation of six silos with a combined capacity of 2.5 lakh tonne. These silos would be used for storing wheat.

Sources told FE that following the open bidding where several private sector players participated, FCI has entrusted the task of building silos at Kotkapura (Punjab) and Katihar (Bihar) to Adani Agri Logistics while Coimbatore-based Sri Karthikeya Mills will construct silos at Sahnewal (Punjab), Changsari (Assam) and Narela (Delhi). Besides, a silo at Whitefield (Bengaluru) will be constructed by Hyderabad-based firm Sudeeksha.

While Whitefield and Kotkapura will have silos with 25,000 tonne capacity each, the rest of the silos have 50,000 tonne capacity each.

An FCI official said that only in case of Kotkapura silo, Adani has sought viability gap funding (VGF). “For the rest of the places, private parties did not ask for VGF support,” the official said.

Under the plan to build silos through private sector investment, there is a provision for 20% VGF from the government as per infrastructure projects norms.

Sources said that silos will be build with an estimated cost of Rs 42-45 crore for a 50,000-tonne silo. Under the plan, the silos will be built on FCI-owned lands while the corporation would provide guarantee of rentals for 30 years for silo operation for the private sector to recover capital investment and maintenance charges.

The FCI official said that 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 construction of silos would be completed within next two years. “Silos take much lesser area than the conventional storage facilities,” the official said.

In an ambitious target to create state-of-the-art grain storage facilities across the country, the government would construct silos with a total capacity of around 10 million tonne through private sector participation in the next three to four years. Even the states like Punjab and Madhya Pradesh have already invited bids for creation of 7.5 lakh tonne and 4.5 lakh tonne silos respectively.

The high-level committee chaired by former food minister Shanta Kumar last year 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.

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