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M.R. Subramani

CHENNAI, April 12

RELIANCE Industries and public sector Central Warehousing Corporation (CWC) are among the 11 parties which have expressed interest in being short-listed as prospective bidders for the Food Corporation of India (FCI) bulk foodgrain handling, storage and transport project.

"About 65 parties had bought the application forms and of this, 11 have expressed interest," official sources told Business Line.

The deadline for submission of the request for qualification (RFQ) was March 31. Initially, the last date was February 18 but following a request from many bidders, who sought clarifications on a host of issues, the deadline was extended. The bids for RFQ were called by the public sector consultancy, RITES Ltd, on behalf of FCI.

The project envisages private investors to build, own and operate infrastructure for bulk handling, storage and transportation of wheat procured by FCI.

Under the proposed scheme, FCI will continue to be the nodal agency for procurement of foodgrains from farmers for the Central pool. Private participation is being solicited at the level of handling, storage and transportation of grains in bulk form.

To make this an attractive proposition, the investors have been offered sops such as FCI guaranteeing compensation for utilisation of 100 per cent capacity of the assets for the first 10 years and 75 per cent capacity for the next 10 years. This is apart from a five-year tax holiday and 30 per cent deduction of profits for the next five years.

The bidders sought clarifications on the corporation's guarantee in view of the Government declaring its intention to substantially pare FCI's procurement operations.

When asked about the guarantee given by the Government, a bidder said: "We are satisfied (with the guarantee given by the Government)." He, however, declined to divulge further details.

The bidders are likely to be shortlisted by the middle of next month. The successful applicants are expected to submit their detailed request for proposal by September, to be followed by the technical and financial bids and finally, the issue of letter of intent and signing of the concession agreement with the selected investor.

The Government has presently identified nine locations for creation of fully automated bulk grain handling and storage terminals, of which four are to be set up as `base depots' of three lakh tonnes (lt) capacity each in Barnala and Moga (Punjab) and Sirsa and Kaithal (Haryana).

The remaining five `field depots' are to be located in consuming areas, including New Mumbai (two lt), Chennai, Coimbatore, Bangalore and Hooghly (one lt each).

The identified locations have, in turn, been grouped into two independent circuits.

The first circuit comprises two base depots (Barnala and Moga) and three field depots (Chennai, Coimbatore and Bangalore), with the second linking the Sirsa and Kaithal base depots with the New Mumbai and Hooghly field depots.

The prospective investors are required to bid for an entire integrated circuit — i.e., either Circuit No. 1 or Circuit No. 2, or even both — rather than for just one or two isolated depots.

In addition, they will also have to put in place the necessary rail infrastructure for transporting the grain from the base to the field depots.

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