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Grain Terminals of FCI & Anticipated Problems therein

Updated: Jul 30, 2018

Food Corporation of India (FCI) has a target of converting 100 Lakh MT of Food grain storage from Bagged storage to silo storage by 2020. FCI is working hard to award Grain Storage Terminals of Capacity 25000 MT to 100000MT at various places under PPP mode to Concessionaires who would actually be executing these projects under Design Build Operate and Own or Design Build Operate and Transfer basis.

Grain Silo of Food Corporation of India
Biggest Grain Storage Terminal of India

There are many corporate houses that are interested to invest in these projects on VGF (Viability Gap Funding) and Non-VGF modes. Since these projects are very different from what FCI has executed in 2006 to 2008 through M/s Adani Agri Logistics Ltd., concessionaires may face some difficulties while operating these grain terminals.

M/s Adani Agri Logistics during 2006 to 2008 had executed a pilot project consisting of Seven grain-terminals on Design Build Operate and Own basis with a concept of Base Depots and Field Depots for Food Corporation of India. In this concept, FCI was the real owner of the grains and Adani was only acting as a custodian of grains. Grain transportation from Base Depot to Field Depot too was responsibility of M/s Adani. So everything was between two parties M/s Adani and M/s FCI.

This system was perfect, as there were fewer problems and even if problems were there the resolution was fast as only two parties were involved i.e. Adani and FCI. Moreover, while executing the projects M/s Adani mitigated all operation related issue during design and equipment purchase stage by inducting high precision equipment in the system itself so that they face much lesser problems.

After successfully implementing and testing Grain Storage in Silo terminals FCI initiated a plan to execute more such terminals on PPP mode. Bids were invited from interested bidders to execute more such grain-terminals. However in the new concept all terminals would act as a stand alone Grain Terminals and grains can be moved from Grain terminals of producing state to Grain Terminals of Consuming State as per FCIs despatch order. This is where the problems or conflict may arise as both may not agree to each other’s quantity / quality specifications.

Since FCI has not laid down much technical specification in their tender, hence everyone is free to choose their own specifications keeping the input & output capacities same as mentioned by FCI in the tender. But the concessionaire has to keep the terminal in good operating condition for 30 years as specified by FCI.

Since most of the concessionaires would be executing these projects for the first time and are not having any previous experience of operating such Grain Terminals, they might go wrong in finalising technical specifications of their upcoming grain terminals and may face a lot of problems while operating the terminal later. Some of the problems that concessionaires could face during course of time are highlighted as mentioned below;

Service Life of Grain Terminal

FCI is happy that they have received very competitive prices for Grain Storage and Handling from the concessionaires whom they have finally awarded the contract. However, Concessionaires are now finding it difficult to stay within their budgeted costs due to unanticipated increase in land costs and railway siding costs due to various practical reasons. Due to this reason, most of the concessionaires are now trying to reduce their expenditure on plant and machinery. This is what they should have never done as they have to keep their plant and machinery in a good working condition for next 30 years. In case they go for substandard equipment they probably would be spending lot of money on its repairs and maintenance eventually, which would eat up most of their profits.

Material of Construction of Grain Silos

Although FCI in their specifications has asked for Galvanised Steel Silos with minimum galvanisation of 350 gsm, yet concessionaires must go for better material of construction as service life of GI 350 gsm is not more than 23 years in Indian atmosphere. A 350 gsm GI silo may have to be painted from inside and outside probably after 15 to 18 years so as to increase its service life. This painting process may have to repeated after every 3 to 4 years which is a big cost as it involves setting up of scaffoldings inside and outside the silo to paint it. Concessionaires must go for either 600 GSM Galvanised steel or may look for better materials like Magnelis or Zincalume to get the required service life of 30 years.

Grain Weight Loss due to Solar Heat Absorption

Galvanised steel silos start absorbing approximately 22 to 26% solar just after 2 years of operation when its silver colour turns dull grey in this time period. As long as the silo colour is white or silver it reflects more solar heat but as it turns dull grey solar heat absorption increase to 26% which increases the average temperature inside grain silo and results in moisture loss. This moisture loss tis approximately 1% in a year, due to this moisture loss there would be a weight loss of 500Tons in a terminal of 50000 MT. Concessionaires may have to go for rewetting of grains at high humidity periods by running aeration fans which again is a big cost. Concessionaires must choose materials, which has high solar heat reflectivity so as to minimise grain loss.

Problems’ in Terminal Operation

Grain Receipt: FCI has not laid out any specifications as to how grains are to be received and what kind of standard operating procedures to be followed. This will result in total chaos, as all concessionaires will follow their own system of keeping records of all the grain receipts. FCI probably will get different formats from different concessionaires, which might be incomplete or incorrect. With this incomplete or incorrect information, concessionaires too with no previous experience of grain management might find it difficult to reconcile quality and quantity of grains.

Grain Terminal Operation and Mangement
Safe Storage Period of Wheat

Hydraulic Sampler: Hydraulic Truck Sampler, which is a very important equipment for bulk grain receiving, is missing from the FCI specifications hence most of the concessionaires will go for manual sampling probes which will result in following problems;

1. Manually samples cannot be drawn from the bottom of trucks, which might result in inaccurate quality reports.

2. Manual sampling will result in delays in overall quality check process and waiting time of trucks will increase.

3. Although, SOPs can be framed for Sample Collection but still there would be chances of incorrect sample drawing.

4. Manual collection of sample will increase the requirement of supervision in the system

Laboratory: There are no clear guidelines about the specifications of equipment that should be available in the Grain Laboratory for quality checks; hence every concessionaire will follow its own specifications while purchasing laboratory equipment. Different equipment with different accuracy levels will give different results and hence lot of undue conflicts will arise. For example cost of a Moisture meter varies from Rs. 25,000/- to Rs. 6,00,000/-. Price difference is only because of their different accuracy levels. Due to non-availability of any FCI guidelines people will go for the cheaper ones only and may get inaccurate moisture readings of grains. Even a small variation of 0.5% in moisture means a loss / gain of 250 tons of grain in a lot of 50000MT, which is approximately Rs. 40 Lakhs in monetary terms. All concessionaires will say that their results are more accurate. FCI probably would be busy full time sorting out the disputes.

Dicky John
Commercial Legal for Trade Moisture Meter

Pre-Storage Silos

Pre-Storage silos are very important to ensure that no infested grain goes inside the silo storage system. In case a bug or infestation is detected during quality checks of received grains, a smaller lot of grains could be fumigated in pre-storage silos before transferring them to main storage silos. The equipment that is used to check if there is any bug in the grain sample is called Berlese Apparatus. Berlese Apparatus takes 6 hours to confirm if there is any bug or insect in the grain sample. Hence we should receive and hold grain in pre-storage silo for 6 hours after filling it completely and once it is confirmed that there is no bug in the grain only then it should be transferred to main storage silo. However, while sizing the pre-storage bins FCI has probably not considered this aspect. Sizing of pre-storage bins should be as mentioned below;

Rate of Receipt of grain = 150 TPH

Time Taken by Berlese Appratus to check Infestation = 6 Hours

Hence, Capacity of one Pre-Storage Silo = 150 X 6 = 900 MT

If Maximum hours of Grain Receipt = 12 Hours

Hence, Nos of Pre-Storage Silos = 150 x 12/900 = 2 Nos

This calculation suggests that there should be a minimum of 2 Pre-storage silos of 900 MT each. An additional pre-storage silo is always beneficial so that in case one silo is busy in fumigation other two can be used as pre-storage silos.

Now, since total capacity of pre-storage silos in FCI specifications is only 250 x 2 = 500 MT hence they can only be used as buffer bins not as pre-storage silos. Hence most of the fumigation will happen in Main Storage Silo, which will increase the quantity of fumigation required.

Berlese Apparatus for Pest Detection

Grain Management: Grain Management of 50000MT of grain is the most critical aspect, as not many people in the industry understand how to manage grain inside silo. Grain Management requires complete understanding of Representative Samples, Psychrometric Chart, Equilibrium Moisture Content of Grain, De-Coring Principles, Induced air movements inside silo, Aeration requirements, Moisture migration, Condensation in silo headspace and silo floor, Fumigation & Pest Management, and last but not the least understanding temperature figures and drawing inference out of it. Selecting right kind of people for grain management would be a difficult task for the concessionaires as there are not many in the industry. Grain Spoilage if occurred inside silo will result in huge losses, as grains are very expansive.

In view of all above mentioned expected problems, concessionaires must try to mitigate all above-mentioned problems during design and purchase stage to have peace of mind later.

Cloud Based Grain Management system

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