FCI Expanding Grain Storage Capacity with 3 Million Tonnes of Wheat Silos By November

In a bid to modernize and enhance its grain storage capacity, the Food Corporation of India (FCI) is on track to complete the construction of 3 million tonnes (MT) of wheat silos across the country by November. These silos are being built under a public-private partnership (PPP) model, with private entities playing a key role in their development.

The FCI has also greenlit the construction of an additional 3 MT of silos, with private bids already received for this expansion. Currently, 2 MT of silos have already been constructed and are operational, while another MT capacity of silos is expected to be handed over to FCI in the coming months. Additionally, the construction of 3.4 MT of silos was sanctioned six months ago and is set to commence soon.

This ambitious project is part of a Rs 9,000-crore endeavor to build wheat silos with a total capacity of 9.4 MT over the next three to four years under the PPP model. These silos will be strategically located across 196 sites in states including Punjab, Haryana, Madhya Pradesh, Uttar Pradesh, Rajasthan, Gujarat, Maharashtra, Bihar, West Bengal, Jammu, Uttarakhand, and Kerala.

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Notable private entities, including Adani Agri Logistics and KCC Infrastructure, have secured contracts for the construction of these silos.

Silos, essentially sub-mandi yards, are expected to streamline the grain procurement process for farmers and significantly reduce logistical costs. These modern storage facilities will offer better preservation of food grains compared to traditional warehouses.

The silos are being constructed using two primary models: design, build, fund, own, and transfer (DBFOT), where the land is owned by FCI, and design, build, fund, own, and operate (DBFOO), where the land belongs to private entities. FCI will lease these silos for storage of wheat for a period of 30 years.

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Under the PPP arrangement, private entities will receive fixed storage charges from FCI based on a per-tonne, per-year basis. These charges will escalate by 70% of the wholesale price index and 30% of the consumer price index.

The move to construct modern silos follows earlier initiatives, including a pilot project in 2005 that modernized storage infrastructure and the construction of silos with railway sidings recommended by a high-level committee in 2015. These silos promise to significantly reduce losses due to theft, pilferage, and transportation compared to traditional warehouses.

As part of a pilot initiative, private entities are currently building two rice silos with a combined storage capacity of 25,000 tonnes in Bihar. The FCI typically stores an average of 40-50 MT of rice and wheat to ensure supplies under the National Food Security Act, making the adoption of silos crucial for better preservation and efficient distribution of food grains.

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