PRESENTATION ON STEEL SILOS PROJECT IN MADHYA PRADESH GOVT. OF - - PowerPoint PPT Presentation

PRESENTATION

ON

STEEL SILOS PROJECT

IN MADHYA PRADESH

• GOVT. OF MADHYA PRADESH

1

The Need - Wheat

Growth in Production, Procurement & PDS requirement

Wheat Production PDS requirement Surplus Stock

20

Procure- ment (19)

10

2009-10 2010-11 2011-12 2012-13

Procurement (49) 40

11

Procurement (35) 30 24 LMT PDS Requirement

• 5

90

92 88 61

Procurement (85) 80 70 60 50

25

170 160

161

150 140 130

127

120 110 100

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

• f

procurement at the Procurement Centres.

• To

gain the trust and confidence

• f

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

Purchase Center Farmer

Farmer Registration Wheat Procurement

Procurement Center

Slip with Registration Code is given to Farmer Advance SMS alert sent to Farmer intimating about the Date of Procurement Farmer goes to Procurement Center on Date

Farmer

Procurement Transaction Performed and Receipt is given to Farmer

Bank

Amount is credit to Farmers Account

1 2 3 4 5 6

e-procurement - – Process Snapshot

7

e-procurement - – Key Indices

• 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)

Rabi 2013-14

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

• 1. Available Storage capacity in State

i) MPWLC / Other Govt. Agencies ii) Private 2013 40 LMT 51 LMT 2014 50 LMT 65 LMT Total 91 LMT 115 LMT

• 2. Proposed creation of Additional

Storage capacity 35 LMT

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

• 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 Total 40.0 LMT

(2) Govt.Resoures

20.0 LMT

Grand Total

60.0 LMT

Strategy (1) Private Investment

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

• ver 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 management, 1/3rd 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
• f 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
• utcomes, 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. No. REVENUES INR/QTL INR/MT/ YEAR (YEAR 2013) REMARKS 1 Receipt & Dispatch Charges 9.12 91.20 Reimbursement at actual expenses incurred 2 Commission Charges 1% On value

• f

actual quantity handled under central pool system. Storage Charges INR/QTL/M ONTH INR/MT/YEAR 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

Descrip iptio tion INR Lakhs Land & S & Site Develop

• pme

ment 0.70 Building g and C Civil Works 1445.63 .63 Plant & M Machineri ries es 966.95 .95 Electri trica cal, l, Automati mation & o

• ther

er Utilitie ties 287.50 .50 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 Financial indicato tors rs Value Unit Project ct IRR 12.14 .14%

• Equity

ity IRR 14.05 .05%

• DSCR

1.00 Times Pay Back Period 9.96 Year

Notes: Capita ital stru ruct cture re - 30 30% Equity ity & 70 70% Debt ebt of

• f the

he total al project ject cost. VGF – 0% for evaluatio uation in in the he base case se. Utiliz ilizat atio ion of

• f facilities

ities after er 10 10year ars of

• f guar

arante anteed perio riod - 100%

• Projec

ject Cost

• Financi

ncial al Indicator icators

19

FINANCIAL ANALYSIS

• Sensit

sitivi ivity Analysis sis

Availability ility of VGF Base se Case se 10% 10% 20% 20% 25% 25% 30% 30% 35% 35% 40% 40% Total al Project ject Cost

3063.52 2757.17 2450.81 2297.64 2144.46 1991.29 1838.11

Amount nt of VGF

0.00 306.35 612.70 765.88 919.06 1072.23 1225.41

Proje ject ct IRR

12.14% 13.23% 14.55% 15.34% 16.21% 17.19% 18.32%

Equity IRR

14.05% 15.85% 18.23% 19.75% 21.57% 23.83% 26.68%

DSCR

1.00 1.11 1.24 1.31 1.40 1.50 1.61

WACC – 9.97% Project IRR > WACC Utiliz ilizat atio ion n & VGF Availability ility of VGF Equity IRR 14.0 .05% 10% 10% 20% 20% 25 25% 30% 30% 35% 35% 40% 40% Utiliz ilizat atio ion n after er 10 Year ars 100%

15.85% 18.23% 19.75% 21.57% 23.83% 26.68%

90% 90%

14.87% 17.27% 18.80% 20.64% 22.93% 25.82%

80% 80%

13.77% 16.16% 17.69% 19.55% 21.87% 24.83%

70% 70%

13.12% 15.52% 17.07% 18.95% 21.29% 24.29%

60% 60%

10.75% 13.19% 14.77% 16.70% 19.13% 22.28%

WACC – 9.97% Equity IRR > 12.00%

20

Procurement Process

Two Stage bidding process has been adopted for selection of developer for Steel Silos. RFQ for Pre Qualification issued in the month of March 2013. Pre-Qualification Requirements are:

FINANCIAL CAPACITY

The Applicant shall have a minimum Net worth of Rs. 30 Cr at the close of the preceding Financial Year (March 2012).  TECHNICAL CAPACITY Only those projects (over the past 5 years) which have payments/receipts of more than Rs.6 Cr considered for evaluation purpose such that total sum of payments/receipts of the projects considered is more than Rs 45 Cr

• Bidders allowed to bid as a Consortium. For Consortia, the scores are

calculated using the sum of scores of members holding more than 26% stake in consortium

21

Projects considered for Evaluation of Technical Capacity

Category –I Category –II Category –III Category -IV

Sector PPP projects in Warehousing /Storage Sector PPP projects in Core Sector EPC projects in Warehousing/ Storage Sector EPC projects in Core Sector Sector Contribution Payment for development/ Revenues received Payment for development/ Revenues received Payments /Receipt for construction work Payments/ Receipt for construction work

• Warehousing/Storage sector would be deemed to include warehousing/ Storage,,

whether modern or

• therwise, including cold storage, storage for food processing,

grain/paddy/millets etc.

• Core sector would be deemed to include includes Road, Highways, Bridges, Power,

Telecom, Ports, Airports, Railways, Metro rail, Industrial park, Real Estate, Logistics, Park, Pipelines, Irrigation, Water Supply, sewerage and Real estate Development

22

Evaluation of Technical Capacity

• The applicant shall, over the past 5 financial years have:
• Paid for, or received payments for, construction of eligible project(s);

and /or (i.e. Role as Construction Contractor)

• Paid for, development of eligible project(s) in category 1 and/or

category 2; and/or (i.e. Role as Project Developer)

• Collected and appropriated revenues from eligible project(s) in

category 1 and/or category 2 (i.e. Role as Project Operator)

• The experience score for an eligible project in a given category would

be the eligible payments and/or receipts divided by one crore and then multiplied by the applicable factors in as stated below: Category Factors Category –I 1.5 Category –II 0.8 Category –III 0.9 Category –IV 0.4

23

Procurement Process – Bid Evaluation

• Tremendous response shown by bidders & for all ten locations total

168 proposals were received from 31 bidders.

• The evaluation has been carried out on the basis of Technical &

Financial capability of the bidders as per requirement set forth in bidding documents.

• On the basis of financial proposal submitted by Technically Qualified

Bidders the Developers have been selected successfully for all ten locations.

• Financial Proposal were invited for the Project on the basis of the lowest

financial grant required by a Bidder for implementing the Project. OR

• Bidders instead of seeking a Grant, may offer to pay a premium in

the form of annual payment to MPWLC over the full tenure of the Concession Period. (In case of premium being offered by applicant, such Premium shall be determined by increasing the amount for the respective year by 10% as compared to the immediately preceding year)

24

Financial Proposals of Bidders - Grant / Premium (All Figure in Crores)

Location Dewas Harda Hoshangab ad Raisen Satna Sehore Ujjain Vidisha Bhopal Indore Sr. No Applicant Name/ Financial Quote

VGF Reqd. VGF Reqd. VGF Reqd. VGF Reqd. VGF Reqd. VGF Reqd. VGF Reqd. VGF Reqd. VGF Reqd. VGF Reqd.

1

Pristine Logistics

10.25 9.11 9.71 10.00 10.75 8.74 9.99 10.51

2

Adani Enterprise

2.11 2.91 2.41 2.31 3.11 2.21 2.41 2.21 3.51 3.11

3

LT Foods Limited

6.26 12.20 11.30 11.46 6.26 5.77 6.11 11.70 0.05 Premium 0.05

4 Techno Electric

& Engineering

• 8.42
• 5.82

9.85

5

Veerprabhu Marketing

10.70 11.38 10.70 9.41

• 7.95
• 9.41

6

Sri Avantika Contractors (I)

• 9.00
• 9.00

7

Total Shipping & Logistics

• 5.25
• 0.01

Premium

• 8

Oakridge Energy

• 8.99
• 9

Vishandas Asnani

1.65 1.45 LOWEST BIDDERS

Adani Enterprise Adani Enterprise Adani Enterprise Adani Enterprise Adani Enterprise Total Shipping & Logistics Adani Enterprise Adani Enterpris LT Foods Limited LT Foods Limited 25

.

• Signing of Storage Agreement with successful bidders is under process

for all ten locations.

• Successful bidders is required to complete the Financial Closure of the

project within 60 days from the date of signing of Storage Agreement

• Scheduled Completion period for each project has been set as 1 Year

(365 Days) from the date of Financial Close.

• The Successful bidders is also required to construct additional facilities

like Vehicle parking area; Reception, cafeteria and rest rooms & Public address system etc.

Present Status of Project

26

Milestones/Achievement

• Warehousing

& Logistics Policy formally launched : August, 2012

• Road shows : September / October, 2012
• Global Investors Meet : November, 2012
• EOIs signed : November / December, 2012
• VGF

Model formulation under Planning Commission’s guidance

• State Government approval (in principle) :

October, 2012

• Selection of Technical Consultant : Nov. 2012
• Feasibility Study in 10 Districts : Dec. 2012 to

February, 2013

27

Proposal submitted for In Principal approval to DIF 04.03.2013 RFQ floated 15.03.2013 In Principle approval accorded by SLEC 06.04.2013 Pre-Bid Meeting (NIC Studio, Vindhyachal Bhavan, Bhopal) 08.04.2013 Concession Agreement finalized May, 2013 RFQ received (142 Bids by 25 firms for 08 locations) 01.06.2013 RFP issued (18 firms) 15.07.2013 Proposal submitted to DEA, GoI for In Principal approval to grant VGF 19.07.2013 First Pre-Bid Meeting (Madhyanchal Bhavan, New Delhi) 13.08.2013 Pre Appraisal Meeting in Planning Commission, GoI 22.08.2013 Second Pre-Bid Meeting (M.P. Bhavan, New Delhi) 07.09.2013 In Principle approval accorded by DEA, Ministry of Finance, GoI 29.10.2013 Final Concession Agreement Issued to Pre Qualified Bidders 15.11.2013 Third Pre-Bid Meeting (H.O. MPWLC, Bhopal) 30.11.2013 RFP received and opened (38 Nos. for 8 locations) 16.12.2013

Milestones achieved for 08 locations

Contd…..

28

Way forward

It is expected to store Wheat of Rabi, 2015 in the Steel Silos at 10 locations in

Madhya Pradesh

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