Setback for Punjab as FCI denies nod to Pungrain project for 31 silos
FCI’s decision was conveyed to the state during State Level Committee (SLC) meeting in FCI Zonal Office in Noida on Friday. The state government has given its dissent note on the decision.
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With the FCI’s refusal, the state has faced a setback. (Representational photo)
The Food Corporation of India (FCI) has refused to give post-facto approval to Punjab State Grains Procurement Corporation’s (Pungrain) project to set up 31 wheat silos worth crores with a capacity of 17 lakh metric ton (LMT).
The FCI, the central procurement agency, has refused to stand guarantee for the 31 road-fed silos stating the FCI could only lift stock from rail-sided silos. With FCI’s refusal, the state would have to terminate the tenders allotted to the companies for the project. If it goes ahead with the project it would have to pay crores for storing grains.The cost of transport from a rail-sided silo was much cheaper compared to road transport. FCI’s decision was conveyed to the state during State Level Committee (SLC) meeting in FCI Zonal Office in Noida on Friday. The state government has given its dissent note on the decision.
The state, that procures grains for the central pool, needs FCI guarantee in the absence of which it would have to pay the rent of the silos from its own pocket. The rental amount at Rs 104 per MT every month, which would run into crores. The state’s argument is it should not be made to suffer financial burden for safekeeping the grains procured for the central pool.
While the state has been arguing that the wheat to Himachal Pradesh and J&K was transported from road, the FCI has been stating the amount of wheat sent to these two states has been very less.
With the FCI’s refusal, the state has faced a setback. Sources in the government said they would have no storage space for wheat procured in April 2019. Punjab produces, on an average, 120 LMT of wheat. About 60 LMT is stored in open on plinths and in the next season, there was no plinth space available either as the granaries are already overflowing. They said the FCI was not transporting wheat as fast as it used to after production of wheat by Uttar Pradesh and Madhya Pradesh.
The state government has already issued termination notices to the companies allotted tenders for silos during the previous regime in January 2016.
The Department of Food will now take the matter to the Cabinet meeting asking the state government to stand guarantee for the silos. The companies, after signing the agreements, depositing performance security and finalising the locations have been left high and dry. They included LT Agri Services, GTM Agro, Lord Venkateshwara Storage, Unipro Techno Infra, Shree Bala Storage, Malbros, Adani Agri Logistics and Baba Naga Agro.
When the tenders were allotted, the prior approval from FCI was not sought. The FCI had refused to give a post-facto approval then following which the project worth crores was put in cold storage.
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