The Food Corporation of India (FCI) is planning to build wheat silos with a total capacity of 3.4 million tonnes (MT) across the country in the next 18 months, under the public private partnership (PPP) mode. This is part of a Rs 11,000-crore project to create modern storage infrastructure for wheat and reduce losses due to theft, pilferage and transportation.
Contracts awarded to private entities
Sources told FE that contracts for the construction of these silos have been awarded to private entities including Adani Agri Logistics and KCC Infrastructure. “Bids for another 3 MT silos construction to be constructed in the next three years has been called,” a food ministry official said . In the last couple of years under PPP mode, 2 MT wheat silos capacity has been already constructed.
Two models of silo construction
Currently, the silos are being built under two models: the design, build, fund, own and transfer (DBFOT) mode, under which the land is owned by the FCI and the design, build, fund, own and operate (DBFOO) model, under which land belongs to private entities . The FCI will use these silos for storage of wheat through a lease of 30 years with private entities. Fixed storage charges to be paid by the FCI to private entities, based on a per-tonne, per-year basis, are the bidding parameters. This fixed charge escalates by 70% of the wholesale price index and 30% of the consumer price index.
Benefits of silos
Silos are sub-mandi yards, which could bring ease of procurement of grains for farmers and lead to significant reduction in logistical costs. They also help in better preservation of foodgrains and prevent wastage due to rodents, pests and weather conditions. The FCI stores on an average 40 – 50 MT of rice and wheat on an average for ensuring supplies to beneficiaries under the National Food Security Act. 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 .
Some of the other benefits of silos are:
- They require less area than a horizontal warehouse to store the same yield .
- They can maintain the freshness and quality of grains by creating optimal conditions for storage .
- They can reduce the cost of storage as well as labor by facilitating easier loading and unloading .
- They can increase the longevity of grains by providing an airtight environment that prevents oxidation and spoilage .
- They can offer greater control over the grain conditions by using monitoring equipment that tracks the temperature and moisture levels .
Project cost and timeline
The estimated cost of construction of 1 MT silos is around Rs 1000 crore . The project is expected to be completed by November 2025 . The project will add 9.4 MT of wheat silo capacity during the next three-four years under the PPP mode . These silos will be spread over 196 locations across Punjab, Haryana, Madhya Pradesh, Uttar Pradesh, Rajasthan, Gujarat, Maharashtra, Bihar, West Bengal, Jammu, Uttarakhand and Kerala .