Private Entrepreneurs Guarantee (PEG) Scheme


Higher MSP coupled with better outreach led to higher procurement in the past few years. As a result of higher procurement of foodgrains, the Central Pool stock had increased from 196.38 lakh MT as on 1.4.2008 to a peak level 823.17 lakh MT as on 1.6.2012.  Hence, necessity was felt to augment the storage capacity for foodgrains.


The Department is implementing a scheme, namely Private Entrepreneurs Guarantee (PEG) Scheme, for augmenting the storage capacity in the form of covered godowns and to reduce the dependence on CAP storage. 


Under the PEG Scheme, which was launched in 2008, godowns are constructed in PPP mode through private parties, as well as various agencies in Public Sector for guaranteed hiring by FCI. 


Guarantee period for private parties is 10 years whereas for Public Sector agencies it is 9 years. In case of private parties, state wise tenders are invited by designated nodal agency under a 2 bid system. At the technical bid stage, sites are inspected and bids in respect of only those sites which are found suitable,  are processed further. Tenders are allotted to the lowest bidders. Non railway siding based godowns are to be constructed in one year whereas godowns with railway siding are allowed two years construction period. This period can be extended by one year at the request of the investor. After completion of the godown, final inspection is carried by a joint committee of FCI and the Nodal agency and godowns completed in all respects and as per specifications are taken over on guarantee basis.


Locations for construction of godowns was identified by the FCI on the basis of recommendations of State Level Committees (SLCs) to meet the storage gaps.   For consuming areas, the storage gap is assessed on the basis of 4 months requirement of PDS and OWS while for procuring states the storage gap has been assessed based on the highest stock levels in the last three years, and keeping in view the potential of procurement.


Accordingly, approximately 200 lakh MT capacity creation was planned with construction of godowns at various locations in 19 states. As on 30.06.2014, capacity of 153.16 lakh MT has been sanctioned for construction and 120.30 lakh MT has been completed.   


The Government has also approved construction of modern storage facilities in the form of silos of 20 lakh MT capacity within the overall approved capacity for PEG Scheme. Each silo will have capacity of 25,000 or 50,000 MT.  FCI has identified the locations of silos in 10 States.  Construction is being planned in the PPP in both Viability Gap Funding (VGF) and non-VGF modes.  The status of various models of PPP for Silos is given below :


·         Non-VGF Mode (17.50 Lakh MT):  Tenders floated in November, 2013 did not get adequate response. Hence, Bid documents are being revised.  Fresh Tenders are to be launched shortly.

·         VGF Mode (Planning Commission) (1.50 Lakh MT):  Bid documents under finalization.  FCI is exploring the possibility of including sites within FCI godowns and having railway siding.

  •    VGF Mode (DEA) (1.00 lakh MT): Bid documents being prepared by DEA.