News Update

Govt Looks To Monetise Warehousing Assets Worth Rs 28,900 Crores Under NMP

• ByStartupStory     |    August 24, 2021

The Centre plans to monetise warehousing assets worth Rs 28,900 crores under NMP (National Monetisation Pipeline). ‘The potential asset base considered for monetisation under warehousing assets consists of storage depots, warehouses under the central sector agencies, Food Corporation of India (FCI) and Central Warehousing Corporation (CWC),’ NITI Aayog said in its report. Both FCI and CWC operate under the aegis of Department of Food and Public Distribution. The existing storage capacity with FCI and other agencies for central pool stocks as on April 1, 2020 is 755 lakh tonnes. Out of this, 412 lakh tonnes is available with FCI and 343 lakh tonnes with the state agencies. Of the total FCI’s storage capacity of 412 lakh tonnes, only 30 per cent is owned while 70 per cent is hired (through CWC, SWCs, and the private sector). CWC operates 422 warehouses with a total operational storage capacity of 109.72 lakh tonnes. This includes custom bonded warehouses, container freight stations, inland clearance depots, air cargo complexes, etc.

‘The potential assets for monetisation are owned warehouses of FCI and CWC,’ the report said. The aggregate storage capacity with FCI and CWC is estimated to be around 521 lakh tonnes (412 lakh tonnes with FCI and 109 lakh tonnes with CWC). The public distribution system (PDS) is an integral part of India’s food security system, operated by the nodal Ministry of Consumer Affairs, Food, and Public Distribution. The central government, through FCI, has assumed the responsibility for procurement, storage, transportation and bulk allocation of food grains to the state governments, for eventual distribution to beneficiaries through the PDS. The key asset classes under asset monetisation include (i) development of 175 lakh tonnes of wheat silos by FCI, (ii) development of 35 lakh tonnes silos at 45 locations by CWC, (iii) development of cold storage facilities in 190 locations by CWC and (iv) development of 1.16 lakh tonnes storage capacity by Central Railside Warehouse Company Ltd (CRWCL).

 

‘The total value of assets considered for monetisation is estimated at Rs 28,900 crore for FY 2022 to 2025,’ the report said. ‘Multiple structures to monetisation have been evaluated, including InvIT, OMD (Operate, Manage and Develop) model,’ it added. For monetisation of warehousing assets, the report said that suitable PPP models akin to TOT (toll-operate-transfer) model adopted by NHAI for highways and OMD based model for assets where augmentation and capacity expansion is envisaged. ‘The expanding e-commerce space offers a new set of opportunities for the warehousing and logistics players. FCI and CWC have a sizeable number of underutilized warehouses near urban centres. Considering the potential growth in demand for warehouses due to e-commerce growth, monetisation of such assets is expected to bring in significant value from the private sector,’ the report said.

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