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M.R. Subramani

CHENNAI, April 16

THE Centre will resume the process for construction of bulk silos for foodgrains' storage On Thursday with the Union Food Ministry holding a meeting with the nine parties that have been shortlisted for executing the project.

"The Food Ministry will hold talks with the parties that have been shortlisted from among those who submitted the request for qualification. We hope the process will be expedited after the meeting," official sources told Business Line.

According to the sources, the process has been delayed as RITES, which has been entrusted with selecting the bidders, took time to work the cost to benefit analysis. RITES officials were unavailable for comment.

FCI officials, when contacted, were unable to explain the delay in the project.

"We don't know why the project got delayed," the official, who did not want to be identified, said.

The bidders, shortlisted during mid-2002, were expected to submit their request for proposal (RFP) by September 2002 to be followed by the technical and financial bids.

This was to be finally followed by the issue of letter of intent and signing of the concession agreement with the selected investor.

Official sources said the RFP documents were ready and issues regarding it were likely to figure at the meeting.

Reliance, Escorts, the Adani Group and Aban Loyd are among those to be shortlisted for the project.

The 18-lakh tonne silo project is to help FCI in bulk foodgrain handling, storage and transport.

The project envisages private investors to build, own and operate infrastructure for bulk handling, storage and transportation of wheat procured by FCI.

Under the proposed scheme, FCI will continue to be the nodal agency for procurement of foodgrains from farmers for the central pool.

Private participation is being solicited at the level of handling, storage and transportation of grains in bulk form.

Firms investing in the project will be offered sops such as FCI guaranteeing compensation for utilisation of 100 per cent capacity of the assets for the first 10 years and 75 per cent capacity for the next 10 years.

This is apart from a five-year tax holiday and 30 per cent deduction of profits for the next five years.

The Government has identified nine locations for creation of fully automated bulk grain handling and storage terminals, of which four are to be set up as `base depots' of three-lakh tonne (lt) capacity each in Barnala and Moga (Punjab) and Sirsa and Kaithal (Haryana).

The remaining five `field depots' are to be located in consuming areas, including New Mumbai (two lt), Chennai, Coimbatore, Bangalore and Hooghly (one lt each).

The identified locations have, in turn, been grouped into two independent circuits.

The first circuit comprises two base depots (Barnala and Moga) and three field depots (Chennai, Coimbatore and Bangalore), with the second linking the Sirsa and Kaithal base depots with the New Mumbai and Hooghly field depots.

The prospective investors are required to bid for an entire integrated circuit — i.e., either Circuit No. 1 or Circuit No. 2, or even both — rather than for just one or two isolated depots.

In addition, they will also have to put in place the necessary rail infrastructure for transporting the grain from the base to the field depots.

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