January 6, 2025

 

India to build nine million tonnes of wheat silo capacities over next three years

 

 

India is aiming to build nine million tonnes of wheat silos capacities over the next three years, from a current level of 2.8 MT of state-of-the-art grain storage facilities.

 

The Food Corporation of India (FCI) has invited bids for the construction of 2.5 MT of modern wheat storage facilities under through a public-private partnership (PPP) model. Sources told Financial Express that by February 2025, contracts for building a state-of-the-art grain storage facility would be awarded while 35 silos with a cumulative capacity of over 2.8 MT have been in operation.

 

In addition, contracts for constructing over 3.5 MT of modern storage facilities across 80 locations have been awarded to private entities. These will be likely to be ready over the next two years. 

 

"In the next couple of years, total wheat silos capacity would be close to 9 MT," an official said. This is part of a Rs 9,000 crore (US$1 billion) project to build wheat silos with 9 MT of capacity, where FCI would store grain. These silos are spread around 250 locations across Punjab, Haryana, Madhya Pradesh, Uttar Pradesh, Rajasthan, Gujarat, Maharashtra, Bihar, West Bengal, Jammu, Uttarakhand, and Kerala.

 

Sources said several private entities, including Adani Agri Logistics, KCC Infrastructure, National Collateral Management Service, and Om Metals Infra, have been awarded the contracts.

 

The corporation will use these silos for storage of wheat through a lease of 30 years with private entities. Bidding parameters include fixed storage charges by the FCI to private entities on a per-tonne, per-year basis.

 

Currently, the silos are being built under the ‘design, build, fund, own, and transfer' (DBFOT) mode, under which the FCI owns the land, and via the design, ‘build, fund, own and operate' (DBFOO) model, under which land belongs to private entities.

 

In 2005, under a pilot project to modernise storage infrastructure, the construction of 0.5 MT of wheat silos at 20 locations under the 'build, own and operate' (BOO) model was carried out by Adani Agri Logistics.

 

The estimated cost of construction of 1 MT silos is around Rs 1,000 crore (US$116.41 million). Silos are sub-mandi yards, which could bring ease of procurement of grains for farmers and lead to a significant reduction in logistical costs.

 

- Financial Express