• Page last updated on: 22 September 2023
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Construction of modern silos

    The salient features of construction of steel silos are as under:-

  • Construction of steel silos is implemented through private investors as well as Central Warehousing Corporation (CWC)/ State Warehousing Corporations (SWCs)/other State agencies.
  • Investment, construction and operation of silo is done by the private party in case of PPP mode of construction and by CWC/State Government/Agencies in case of EPC mode of construction. As return for investment FCI guarantees hiring of the silos constructed by a private party/CWC/SWCs for 30 years.
  • Construction may be undertaken in the following models:

    1. Viability Gap Funding (VGF) model: On land of FCI/CWC/State Agencies in PPP mode

    2. non-VGF model: On land of private parties

    3. VGF-DEA model: on land of private parties transferred to the Government on payment of cost of land.

  • Construction may also be undertaken by CWC/SWCs in Company Owned Company Operated (COCO) model at places where land is available with them. The responsibility of construction and operation lies with CWC/SWCs.
  • In VGF model, grant upto 20% of Total Project Cost may be sought as VGF from the Government while bidding.
  • Bidding parameter is highest premium/lowest grant in case of VGF model and lowest storage charges in case of Non-VGF model.
  • The location and capacity for godowns are identified as per storage requirements by State Level Committees and finally approved by the High Level Committee (HLC) headed by Chairman & Managing Director, FCI.
  • Standard capacity of silos is 50,000 MT, but capacity may also be other multiple of 25,000 MT depending on requirement.
  • Selection of the private party is done through open advertisement and two stage tendering process.
  • The silos must be constructed as per the specifications stipulated by FCI
  • The period of construction is about two years, as stipulated in the tender document.
  • The private party may be an individual or partnership firm or a company or trust.
  • The land parcel of about 11 acres is required for a capacity of 50,000 MT comprising about 7 acres for silos and 4 acres for railway siding.
  • After the expiry of concession period in VGF model, the facility is transferred to the Government. However, in non-VGF model the ownership lies with the private party.
  • The payment of storage and other charges are made as per the terms and conditions of the concession agreements.