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Months after First Family ‘spat’, Adani group makes bid for silo project

The bid by Adani Enterprises Limited has come up for pre-qualification scrutiny before the Punjab State Warehousing Corporation (PSWC) and, sources say, final award of allotment would be done before this weekend.

Written by Kanchan Vasdev | Chandigarh |
August 5, 2015 9:01:23 am

Two months after Punjab Deputy Chief Minister Sukhbir Singh Badal and his brother-in-law, Food Minister Adesh Pratap Singh Kairon, disagreed over the Adani group setting up grain silos in the state, the private firm has now bid for 11 silos.

The bid by Adani Enterprises Limited has come up for pre-qualification scrutiny before the Punjab State Warehousing Corporation (PSWC) and, sources say, final award of allotment would be done before this weekend.

Apart from the Adanis, LT Foods Limited, Star Agriwarehousing and Collateral Management Limited and Surat Good Transport Private Limited have also bid to construct the silos.

The project worth Rs 130 crore and funded by NABARD and PWSC on (90:10) basis, was advertised by the corporation last month and bids were called through e-tendering. There was controversy, however, as the silos were divided into four groups and interested companies had to bid for all four groups. This had prompted some smaller agri-logistics players to level allegations that the tenders were tailor-made to suit only major companies.

The silos, to be constructed under Engineering, Procurement and and Construction (EPC) model, would come up at Nurmahal, Chheharta, Bhulath, Macchiwara, Chawa Payal, Mullanpur, Patran, Sirhind, Sangrur, Bathinda and Jalalabad and would create storage space of 5.75 lakh metric tonnes.

The company that would set up the silos would construct it for the state and operate it for 20 years to recover its cost. The PWSC would pay them operation and maintenance cost. Later, these would be handed over to the state, sources said.

While the tenders under the EPC model have been called by dividing the silos in groups, the PWSC has also floated tenders for six more silos in Ajnala, Banga, Ajitwal, Phagwara, Balachaur and Ropar. These silos would be set up under the PPP model. Adanis have not shown any interest in these silos.

PWSC’s decision to go ahead with setting up the silos saw Kairon opposing the move since PUNGRAIN, a state government agency under his charge, has already signed a memorandum of understanding (MOU) with NABARD for constructing 10 silos at different locations.

Sources close to Kairon had argued that the state has only 22 lakh metric tonnes of wheat lying in uncovered grounds against a yield of 100 lakh metric tonnes this year. So 10 silos with 5 lakh metric tonne capacity each would suffice and those being constructed by warehousing would not be needed.

Adani Agri Logistics already has silos with a capacity of 2 lakh metric ton in Dagru village in Moga district.
The controversy between the brothers in law was sparked off after a meeting on April 30, in which Adani group representatives met Chief Minister Parkash Singh Badal, expressing their interest to set up more silos in the state.

The chief minister later convened a special meeting on May 20 in which the setting up of steel silos was discussed and a proposal for allotting the contract to the Adani group under the ‘Swiss channel’ was mooted that would have helped alloting of tenders to Adani group. Kairon opposed the project, and the meeting turned
it down.

On May 21, a Cabinet meeting was called with an agenda on these silos added at the last minute. Kairon stayed away from the meeting sending a written note that no agenda on silos should be discussed. Sukhbir chaired the meeting since the CM was said to be unwell and he pushed the agenda through with all other cabinet ministers passing it.

PSWC was made the executing agency while PUNGRAIN was allowed to go ahead with the construction of silos having 5 lakh tonne capacity at ten different places in the state.

Additional Managing Director of PWSC, H S Brar brushed aside the row, saying they were following a very transparent and fair process of allotment of e-tenders. He said everything was computerised and the allottee would have to meet with all the conditions to deserve the project. “Since it is all computerised, there is no scope of any hanky panky in the process,” he said.

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