"Cabinet gave its clearance to the setting up of the centre last month. We have now begun all the work for it," Sifa chairman Hemant K Jalan told PTI.

The marketing-cum-auction centre will be set up jointly by the Agricultural and Processed Food Export Development Authority (APEDA), Karnataka Agro-industries Corporation (KAIC) and Sifa.

"APEDA would hold 50 per cent equity in the venture," Jalan said. The centre will come up at an initial cost of Rs 18.52 crore and of this APEDA would foot Rs 9.6 crore.

The marketing-cum-auction centre is part of the centre's plan to set up auction centres for floriculture in various growing areas of the country.

"The centre here will have 40 growers as members. They will be able to tap the export potential for Indian flowers,"Jalan said.

The marketing-cum-auction centre will come up in two stages with a facilitative company being set up in the first phase and an operating firm in the second, commerce ministry sources said in New Delhi.

Apart from here, APEDA planned to set up auction centres in Mumbai and New Delhi, sources said. On its part, KAIC would allocate land worth Rs five crore for setting up the centre.

Sifa would contribute Rs one crore for the venture, while the rest was expected to be pooled in by the Karnataka government. Sifa was likely to take control of the centre once the operating company was incorporated, the sources said.

The move to set up auction centres follows a demand from the floriculture industry to tap the sector's vast export potential. Earlier, a technical feasibility report had fixed Rs 24.5 crore as initial sum required for the first phase of setting up the marketing-cum-auction centre.

However, after KAIC pleaded for cutting down the estimates, the initial outlay was revised to Rs 18.52crore. Bangalore is the gateway of Indian floriculture exports with roses forming a major part of the shipments. Currently, floriculture exports from India are worth Rs 60 crore.