Private silos and freight terminals on FCI radar

To develop 20 mt of storage capacity, corporation likely to encourage private investment in silos

Food Corporation of India (FCI) might allow private players to build grain silos along with private freight terminals if land is available with the developer.

The corporation will ensure guaranteed capacity and will also pay rent to the investor at a fixed rate for such silos. This was disclosed at a meeting the corporation had with investors for its nationwide programme to develop 20 million tonnes of storage capacity through silos, officials said.

At present, of the 71.1 million tonnes of storage capacity available with the corporation, just around 5.5 million tonnes is through silos, run by Adani Agro Logistics Ltd.

The corporation already operates two schemes to attract private investment in construction and development of silos, and a third one, along with private freight terminals, is also being thought off.

The first one is with 20 per cent viability gap funding and the second one is without viability gap funding through the public-private partnership (PPP) mode. The non-VGF, scheme is usually operated in those areas where FCI does not have its own land.

Officials said according to an preliminary assessment by the corporation, there are 87 depots with rail siding, silos exceeding a capacity of 25,000 metric tonnes can be developed, while there are another 56 locations where silos in excess of 50,000 tonnes of capacity can be developed.

"FCI plans to upgrade its storage facilities to modern bulk storage systems through silos and would leverage its existing land assets with private sector expertise to minimise costs through PPP models," the executive director of the corporation's silos division, Abhishek Singh, said at the conference.

He said in terms of capital cost, for a silo it is Rs 5,900 per tonne, while in case of conventional storage it is around Rs 6,750 tonne.

That apart, there the losses and damages in a silo are far less than conventional storages. Through its silo-development programme, the corporation plans to eliminate entirely storage in covered area plinth, in which grains are kept under plastic sheets, mounted on an elevated platform.

As part of its strategy, the corporation plans to develop, large silos in procurement states such as Punjab, Haryana, Uttar Pradesh, standalone small silos in mandi yards and medium-sized silos in consuming states like Maharashtra. A draft model concession agreement, along with other necessary bidding documents has been prepared by FCI in consultation with NITI Aayog.