Silos of over 11 million ton storage capacity to be built through PPP for FCI

Tags: Economics/Business

In a bid to attract investment into India’s food grain storage infrastructure from big corporate entities, the food ministry has approved a policy which encourages the private players to bid for construction of 249 state-of-art silos with close to 11 million tonne (MT) wheat storage capacity for the Food Corporation of India (FCI).

In how many states it will be built

The silos will be built across 12 states, including Punjab, Haryana, Madhya Pradesh, Maharashtra, Haryana and Kerala, over the next four to five years through the public-private partnership (PPP) model with an estimated investment of Rs 9,200 crore.

The FCI will use the silos for storage of wheat through a lease of thirty years with private entities.

Committee on Restructuring FCI

Based on the recommendation of a high-level committee for restructuring of FCI, chaired by former food minister Shanta Kumar, in 2014, an action plan for construction of 10 MT capacity wheat silos through private sector investment was approved by the food ministry in 2016.

How much capacity created so far 

So far, silos with more than 1.11 MT wheat storage capacity have been created in Punjab, Madhya Pradesh, Gujarat, Haryana, Bihar and Assam at 22 locations.

First rice silos 

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

Benefit of Silos

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.

FCI stores around 55 MT to 85 MT of rice and wheat at any given point of time.

FCI

• The Food Corporation of India was set up in 1965 by the Government of India under the Food Corporation act 1964.
• It is under the Ministry of Consumer Affairs, Food and Public Distribution, Government of India.
• Its Headquarters is in New Delhi.