"The ministry of consumer affairs, food and public distribution along with the Food Corporation of India (FCI) will issue advertisements inviting EOIs from individual private parties, as well as joint ventures latest by December 31, 2000," official sources said.

Under the bulk grain handling project, a total of around 50 lakh tonne capacity would be created consisting of large silos along with an integrated transport system. The total project would cost upto Rs 6,000 crore and 20 sites had been identified by the government for the project, they said.

The sites, which will be linked to each other, have been identified on the basis of proximity to procurement sites like Khanna, proximity to port towns and strategic areas for distribution, to regions like the north-east, sources said.

The transport system would require construction of specially made railway wagons with facility for top filling and bottom unloading along with use of specially designed trucks.

The above project is in line with the National Storage Policy, cleared by the government earlier this year, which envisages construction of heavy storage silos by private parties, to create additional storage capacity. Sources said that the government will give guarantee of utilisation to the private parties constructing these heavy storage silos. The food ministry along with the FCI would soon invite bids from private parties, for the construction of small capacity godowns of between 5,000-10,000 tonne capacity on a build-own-operate basis.

The government intends to create an additional small storage capacity of up to ten lakh tonne, sources said adding that the government will give a letter of guarantee to the private party, to pay a per bag cost, per month for a period of up to seven years. Sources however, added that no final decision had yet been taken on the price to be given per bag.

On the basis of the letter of guarantee, the private parties can obtain credit from financial institutions like Nabard, they said. In return the government will take a comprehensive insurance and some kind of bank guarantee from the private parties, sources added.

The Minister for Consumer Affairs, Food and Public Distribution Shanta Kumar recently held a review of the storage policy.

As on October 1, 2000 the FCI had a total storage capacity of 26.64 million tonne (owned and hired, and covered area plinth (CAP) against the total stocks of 22.71 million tonne.