PRESENTATION ON STEEL SILOS PROJECT IN MADHYA PRADESH GOVT. OF MADHYA PRADESH 1
The Need - Wheat Growth in Production, Procurement & PDS requirement 170 160 150 140 130 161 120 110 100 127 90 80 70 92 60 88 61 Procurement (85) 50 25 Procurement (49) 40 11 Procurement (35) 30 24 LMT PDS Requirement -5 20 ment (19) Procure- 10 0 2009-10 2010-11 2011-12 2012-13 Wheat Production PDS requirement Surplus Stock 2
The Need - Paddy Growth in Production, Procurement & PDS requirement 3
E-procurement Computerization of Food grain Procurement System in Madhya Pradesh __ Department of Food, Civil Supplies and Consumer Protection, Government of Madhya Pradesh 4
Inefficiencies prior to e-procurement Long waiting queues of farmers for selling their crop Manual cheque payments to farmers (delay, loss, malpractices) Below optimum functioning of Procurement Centres Poor Decision Support System/ Irregular Forecasting Less-efficient Monitoring and Control of procurement processes Absence of transparency and citizen interface Malpractices 5
e-procurement - Objectives To enable smooth, regulated and efficient process of procurement at the Procurement Centres. To gain the trust and confidence of farmers through simplification of procedures and transparency of operations, from ‘purchase to payment’ . To weed out malpractices. To develop a near real-time reporting mechanism of the field level operations, such as forecasting, purchase, transportation, storage, payment etc, to enable better planning, monitoring and management. 6
e-procurement - – Process Snapshot Wheat Procurement Farmer Registration Advance SMS alert sent to 3 Farmer intimating about the Farmer goes to Purchase Center 4 Date of Procurement Procurement 2 Center on Date Procurement Center Farmer Slip with Registration Code is given 1 to Farmer Farmer Procurement Transaction 5 Performed and Receipt is given to Farmer 6 Bank Amount is credit to Farmers Account 7
e-procurement - – Key Indices Rabi 2013-14 1.42 Million Farmers registered after physical verification. 9.8 Million SMS sent to farmers to intimate dates for selling their wheat. 6.4 Million of wheat procured through the e-procurement System from 0.90 Million farmers through 1.3 Million transactions . Rs. 95300 Million transferred to farmers bank account as payments. Computer Hardware worth Rs. 33 Million given to Procuring Agencies 3,500 people given Hands-on Training organized at State and District level for all stakeholders. Employment of 2,852 Data Entry Operators and 714 Runners. Total Cost , including Application design, development, Implementation, Trainings, Support & Maintenance, Hardware and temporary man-power; Rs 196 Million 33.3 Million – Non Recurring+162.5 Million – recurring exp.) Rec. exp(Data entry operation+runner 6 month salary +runner conveyanc) 8
e-procurement – Successful Outcomes Decision Support System Near-elimination of corruption and malpractices existing in the procurement processes. Unified database of genuine farmers SMS alert mechanism Monitoring and Tracking Transparency and citizen interface E-Capacity Enhanced Digital Inclusion Prompt and full payment to farmers, through direct bank transfer ensuring that farmers actually received the Minimum Support Price (MSP) for their food grains, and saving them from the clutches of middlemen. 9
e-procurement – Recognitions and Awards Officials from Uttar Pradesh, Rajasthan and Bihar have visited the Madhya Pradesh to have an understanding of the eUparjan Project. The e-procurement Project has been awarded as the “ Best IT initiative” in Madhya Pradesh for the year 2011-12. Awarded “CSI - Nihilent eGovernance Award 2011-12 ” in the Projects Category – G2B by the Computer Society of India - Nihilent. Awarded “Best Government Project in Social Inclusion in the Horizontal Category” in the IT Innovation Awards presented by Lenovo and powered by NASSCOM and CNBC-TV18. Short-listed by United Nations for Public Service Award 10
Vision 2013 2014 1. Available Storage capacity in State i) MPWLC / Other Govt. 40 LMT 50 LMT Agencies ii) Private 51 LMT 65 LMT Total 91 LMT 115 LMT 2. Proposed creation of Additional 35 LMT Storage capacity In the year 2013 the available capacity with the state was 91 LMT. It was planned in 2013 been to increase this capacity by another 60 LMT in next two years. 11
Mix of Storage Solutions 1. Conventional Godowns 2. Silo Bags 3. Steel Silos 12
Strategy (1) Private Investment Investment – Incentives 15.0 LMT Business Guarantee 13.0 LMT Rural Godowns 03.5 LMT Steel Silos (VGF) 05.0 LMT Steel Silos (BG) 03.5 LMT 40.0 LMT Total ( 2) Govt.Resoures 20.0 LMT Grand Total 60.0 LMT 13
Need for Setting up Steel Silos Frequent upward revisions of the Minimum Support Price (MSP) for procurement of food grains have led to a rise in the level of procurement over the last few years. Due to this, the state faces the problem of managing large stocks of food grains. It is estimated that post-harvest losses are round 10% due to lack of modern storage facilities. This constitutes a huge national waste in terms of food as well as public money. Therefore, it becomes necessary to create additional modern storage facilities on a large scale. Silos are better option for bulk storage of grains due to their various benefits like assured shelf life of grain for 2-3 years, easier grain 1/3 rd management, land requirement compared to traditional warehouses and no risk of pilferage. 14
Why PPP Approach in Storage Management The investments required are large compared to available public resources, and private capital could, therefore, enable an accelerated roll out of modern storage capacity. Functional efficiency of private entities would enable early delivery of quality services. Risk of project completion and delivery of agreed outputs would be transferred to the private entity. Public funds would be expended only upon delivery of agreed outcomes, and Private sector efficiency in the context of a long-term agreement is expected to optimize on life-cycle costs and improve on quality of grain storage. 15
Silo Project in M.P. – VGF Model DBFOT Model 10 Locations 50,000 MT Capacity at each location Land by State Government (8 acres). VGF : 20% by GoI 20% by GoMP Storage Charges same as Conventional Godowns 10 Years Business Guarantee 30 Years Concession Period Bidding on VGF 16
Project Cost & Project Financing Total Project Cost – Rs 31 Cr Building & Civil works – Rs 14 Cr Plant & Machinery – Rs 13 Cr Other/IDC/Contingencies- Rs 4 Cr Sources of Financing: Equity from the Concessionaire. Central VGF (Maximum of 20% of the Project Cost) VGF from GoMP (Maximum of 20% of the Project Cost) * Senior Debt *VGF from GoMP , if any, will be provided as “O&M Support” to the project 17
Major Sources of Revenue S. REVENUES INR/QTL INR/MT/ REMARKS No. YEAR (YEAR 2013) 1 Receipt & 9.12 91.20 Reimbursement at actual Dispatch Charges expenses incurred 2 Commission 1% On value of actual Charges quantity handled under central pool system. Storage Charges INR/QTL/M INR/MT/YEAR ONTH 3 Variable Charge 0.5 67.30 As on April 1 ’ 2012 4 Fixed Charge 5.75 723.46 As on April 1 ’ 2012 18
FINANCIAL ANALYSIS • Financi ncial al Indicator icators • Projec ject Cost Descrip iptio tion INR Lakhs Financial Value Unit indicato tors rs Land & S & Site Develop opme ment 0.70 Project ct IRR - Building g and C Civil Works 12.14 .14% 1445.63 .63 Equity ity IRR - Plant & M Machineri ries es 966.95 .95 14.05 .05% Electri trica cal, l, Automati mation & o other er DSCR Times 1.00 Utilitie ties 287.50 .50 Pay Back Period Year 9.96 Preliminary ary & Pr Pre-Operativ ative e Expenses es 218.77 .77 Contin ingency cy 135.04 .04 Total al Block Cost 3054.58 .58 Margin Money 8.93 Total al Capital al Cost t 3063.52 .52 Notes: Capita ital stru ruct cture re - 30 30% Equity ity & 70 70% Debt ebt of of the he total al project ject cost. VGF – 0% for evaluatio uation in in the he base case se. 19 Utiliz ilizat atio ion of of facilities ities after er 10 10year ars of of guar arante anteed perio riod - 100%
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