FCI reduces storage capacity, cancels contracts with godown owners

Anirudh Gupta

Ferozepur, January 4

With the Food Corporation of India (FCI) cancelling contracts with godown owners in Ferozepur and Fazilka districts, several entrepreneurs are unhappy. The FCI has reduced its cumulative capacity by 70,000 MT. The Punjab State Warehousing Corporation (PSWC) had helped the FCI sign a contract with the entrepreneurs.

While the FCI officials claim that the godowns were no longer required as the FCI had enough storage capacity, the entrepreneurs say the corporation was renting new godowns at much higher rates.

Sources said a decade ago, these godowns were rented by the FCI at the rate of Rs 2.40 per square foot. The PSWC was the nodal agency to rent the godowns. Later, the government introduced “PEG” (private entrepreneurs guarantee) scheme to rent godowns in the PPP mode and Pungrain was made the nodal agency.

The FCI officials said they had created a storage capacity of over 40 lakh MT through PEG scheme and so they did not need to rent several private godowns. “We purchase 20 per cent of wheat for which the FCI has enough storage space. The remaining 80 per cent is procured by state agencies,” said Manjeev Kumar Goyal, District Manager, FCI.

Karundeep Singh, District Manager, PSWC, admitted they were cancelling their contracts with certain godowns.