First rice silos under PPP mode to be operational next month

By Sandip Das

The country’s first silos for storing rice built under private-public-partnership (PPP) model with the Food Corporation of India (FCI) will be commissioned next month.

Two rice silos with combined capacity of 25,000 tonne have been built by the National Commodity Management Services Limited (NCML) at Buxar and Kaimur (Bihar) under the design-build-finance-operate-transfer model.

This is part of the government’s pilot project to set up steel silos for rice to prevent the cereals wastage during storage.

Sources said that the FCI will store foorgrain for 30 years while the silos operated by the private entity. FCI will pay a storage charge of around Rs 100/tonne per month.

Silos are considered sub-mandi yards, which allows the farmers to bring in their produce for procurement and reduces transportation costs.

“Silos ensures high-speed transportation of bulk grain and it eliminates bag handling, and spillage, minimizes labour requirements, and with efficient fumigation ensures almost zero infestation,” Sanjay Gupta, Managing Director & CEO, NCML told FE.

Though the country has silos for storing wheat, it is for the first time that a project for rice silos has been commissioned.

Currently 1.3 million tonne (MT) of silos for wheat storage have been constructed by the private entities including Adani Agri Logistics, KCC Infrastructure and NCML for FCI and 1.1 MT of wheat silos are at various stages of construction.

Meanwhile, Gupta said NCML will also complete construction of five wheat silos in Bhatu and Sonepat (Haryana), Amritsar and Batala (Punjab) and Basti (Uttar Pradesh) with a 50,000 tonne capacity each for FCI in the current fiscal. NCML will be investing around Rs 650 crore for construction of the seven silos.

In addition, under a new ‘hub and spoke’ model approved by the food ministry in 2020, 3.5 MT silo projects are being awarded to private entities.

This is part of a broader Rs 8,400-crore project to build wheat silos with 9.5 MT of capacity during the next three-four years under the PPP mode. These silos will be spread over 249 locations across Punjab, Haryana, Madhya Pradesh, Uttar Pradesh, Rajasthan, Gujarat, Maharashtra, Bihar, West Bengal, Jammu, Uttarakhand and Kerala.

FCI stores around 40- 60 MT of foodgrain at any given point of time. Currently FCI and state agencies have grain storage capacity of 33.7 MT and 37.6 MT respectively.

In 2005, under a pilot project to modernise storage infrastructure, construction of 0.5 MT of storage capacity under the build, own and operate (BOO) model was carried out by Adani Agri Logistics. Subsequently, on recommendation of a high-level committee chaired by former food minister Shanta Kumar in 2015, construction of silos with railway sidings commenced.

Then the food ministry approved a ‘hub and spoke’ model because of challenges faced in land acquisition for railway sidings.

Food ministry officials say that if food grains are stored in silos and transported in bulk, losses due to theft, pilferage and transportation would be negligible compared to the food grains stored in warehouses.

This article has been republished from The Financial Express

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