Govt plans rice silos on pilot basis

The Government is considering setting up modern silos for rice at Buxar and Mohania in Bihar on a pilot basis.

At least four storage bins, each with 3,125 tonnes capacity, will come up in the pilot project for which the Department of Economic Affairs (DEA) under the Finance Ministry has prepared a standard document.

“The documents will now be scrutinised by the inter-ministerial group before the Food Corporation of India, as the nodal agency of the project, is permitted to float tenders. All this could happen in 2-3 months,” said Munishwar Vasudeva of Eco Agri Forum Consulting Services.

“The Centre is serious about silos for rice. It has asked a private firm to prepare a project report,” said an executive with a logistics firm, not wishing to identify.

Vasudeva said the Centre had decided to set up wheat and rice silos in Buxar and Mohania. For every four kg of wheat that is stored, one kg of rice will be stored at these sites.

Three storage bins of 12,500 tonnes each will be set up for wheat.

For rice, the height of silos is being reduced to handle various problems which could crop up, he said.

The Asian Development Bank has funded the project consulting for the silos plan.

It had asked for separate norms for silos that are being set up on build, own, operate (BOO) and build, own, transfer (BOT) basis under the public-private partnership programme.

Under BOT, State Governments will have to provide the land, while the private sector will have to bring in technical expertise, including equipment. Under BOO, the private sector will have to arrange for everything from scratch.

Since the BOT arrangement involves FCI, the Centre has now chosen to go the BOO way, sources said.

“The DEA has suggested two types of viability gap funding for the BOO project. One is on the technical front, including equipment, computers etc and the other is for buying land,” said Vasudeva, who is on the technical advisory panel of FCI and DEA for the project, over phone.

The Government is also trying to draw strength from a similar initiative in Bangladesh, where rice silos are being set up in two phases. In the first phase, the concept and designs have been prepared. The next stage is implementing and monitoring the progress in setting up the storage bins.

Bangladesh is setting up silos with a total capacity of 5.28 lakh tonnes. Of this, two silos are coming up in Chittagong and a nearby place to store 1.25 lakh tonnes and 75,000 tonnes of wheat. Rice will be stored in six silos of 40,000 tonnes capacity each.

The Centre is keen on setting up silos for wheat and rice since they help in saving costs on labour for loading and unloading (in mandis, warehouses and at the user end), packaging and transportation. It will also help save mandi taxes, which are nearly 15 per cent in Haryana and Punjab.

Silos will also help curb post-harvest losses that are estimated at nearly 20 per cent of the total foodgrain procurement by the Government in a year.

This year, the Government procured four lakh tonnes of wheat in bulk for storage in silos that have been set up by Adani Logistics on a pilot basis. About 25 per cent of the cost has been saved through this procurement.

In the pilot project, Adani has two base depots at Moga in Punjab and Kaithal in Haryana to store two lakh tonnes of wheat each.

Besides, it has field depots at Tada near Chennai, Coimbatore, Bangalore and Hoogly with a storage capacity of 25,000 tonnes each. It also has a depot at Navi Mumbai to store 50,000 tonnes of wheat.

On the other hand, the Centre is likely to float tenders for setting up 42 silos to store about 20 lakh tonnes of wheat soon.

The tenders were scheduled to be floated in July last year but had to be put off due to problems in the documentation process. The problems have been rectified, said sources at the International Wheat Seminar.