• Page last updated on: 21 September 2023
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Private Entrepreneurs Guarantee (PEG) Scheme

Construction of godown in PPP mode:

To take care of increasing levels of production/procurement of foodgrains and to reduce the dependence on Cover And Plinth (CAP) type of open storage for foodgrains, the Department is implementing a scheme, namely Private Entrepreneurs Guarantee (PEG) Scheme, for augmenting the storage capacity of FCI in PPP mode. The scheme was started for non-DCP states in 2008 and then extended to DCP states. Construction of godowns is done by private investors or CWC/SWCs without any investment by the Government. Return on investment is earned by the parties through rent, as FCI hires the godowns for a guarantee period of 10 years for private parties. 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 Other Welfare Schemes (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.

The scheme is in operation in 20 states. As on 30.04.2017, capacity of 150.49 lakh MT has been sanctioned for construction and 137.40 lakh MT has been completed. Further 8.37 LMT is under various stages of construction.