Decision this week on new grain storage tenders

If things fall in line, tenders for the creation of 2 mn tonnes of silo capacity will be floated next month

An inter-ministerial group of the government of India is scheduled to meet on Thursday to take a decision on creation of more grain storage capacity.

Sources informed Business Standard that if things fall in line, tenders for the creation of two million tonnes (mt) of silo capacity would be floated next month.

An empowered group of ministers had approved the creation of another two mt of silo capacity and the Food Corporation of India has planned to distribute this over 10 states. The silos will be created on either a public-private partnership (PPP) mode or a build-own-operate basis. After the Request for Proposal and Request for Qualification documents get approval, there would be action on the ground, said an official in the ministry of food.

Under the PPP mode, the Union government will provide 20 per cent of viability gap funding. A silo requires 40 per cent of the land needed for a conventional godown. Except for Punjab and Haryana, there is no problem in making land available for silos.

After the RFP (Request for Proposal) and RFQ (Request for Qualification) documents get the approval of GOI there would be action on the ground, an official in Ministry of Food said.

Under the PPP mode, the GOI will provide 20% of Viability Gap funding for creating a silo.

A silo requires 40% of land as compared to a conventional godown. The Food Corporation of India has land available in Assam near Guwahati and Dibrugarh, and in Maharashtra near Baramati land is available with Maharashtra Warehousing Corporation.

Except for Punjab and Haryana where the land is scarce, there is no hiccup in making the land available for silos.

India presently has close to 35 million tonne of storage capacity. The storage requirement touches the peak in June when the country has the highest stocks of foodgrain after the wheat procurement ends.

The sources in FCI apprised that an additional 20 million tone capacity scattered across the states is in the pipeline.

The Ministry of Food has an ambitious plan to complete the creation of 20 million tonne capacity by March 2015.

Keeping in view the requirement of food security act, the country needs 55 million tonne to 60 million tonne of covered capacity and this should be achieved by 2015, added the official.
CREATING SPACE

• 14 mn tonnes
  Conventional godowns
  to be created
• 4 mn tonnes
  Capacity yet to sanctioned
• 2 mn tonnes
  Capacity sanctioned under silos

Source:Ministry of Food, GoI