FCI conducts tender to build silos, private investment at Rs 720 cr

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The Food Corporation of India (FCI) has issued tenders for the construction of one million tonne (MT) capacity silos at 14 sites from the private sector under the Design, Build, Finance, Operate and Transfer model.

Sources said the estimated private investment in these silos for wheat storage will be about Rs 720 crore. The plants will be located in Uttar Pradesh (0.52 MT), Punjab (0.15 MT), Maharashtra (0.12 MT), Gujarat (0.08 MT), Rajasthan (0.07 MT) and Bihar (0.05 MT) erected.

Currently, silos with a capacity of around 2.8 MT are in various stages of construction, and the Company intends to build a silo with a capacity of almost 11 MT to store wheat in the next four to five years.

The FCI will use the silos for wheat storage through a 30-year lease with private companies. Fixed storage fees to be paid by the FCI to private entities per tonne per year are the tender parameters. This fixed fee increases by 70% of the wholesale price index and 30% of the consumer price index.

Earlier, the Food Ministry approved a policy encouraging private actors to bid for the FCI to build 249 state-of-the-art silos with almost 11 tons of wheat storage capacity. The silos will be built in 12 states including Punjab, Haryana, Madhya Pradesh, Maharashtra, Haryana and Kerala over the next four to five years under the public-private partnership (PPP) model with an estimated total investment of Rs 9,200 crore.

For the first time, two rice silos with a combined storage capacity of 25,000 tons are currently being built on a pilot basis at Buxar and Kaimur in Bihar by private companies for FCI.

Sources told FE that “by pooling projects” the Ministry of Food has removed a previous clause that had prevented large private actors or consortia from bidding for a number of silos construction projects.

Officials say the ceiling for bidding by individual companies or consortium to build silos was 15% of sites or storage capacity.

Food Ministry officials say that when food grains are stored in silos and transported in bulk, losses from theft, theft and transportation would be negligible compared to food grains stored in warehouses.

Meanwhile, in a major initiative to eliminate grain storage losses, FCI will end the practice of storing wheat in uncovered facilities beginning this September to expand covered storage facilities and ensure the direct transfer of grain from sourcing centers to the states for public distribution.

FCI stocks approximately 50 to 60 tons of rice and wheat at any given time. Silos ensure better preservation of grain and extend shelf life.

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