PRESENTATIONON
STEEL SILOS PROJECT
IN
MADHYA PRADESH
GOVT. OF MADHYA PRADESH
1
The Need - WheatGrowth in Production, Procurement & PDS requirement
Wheat Production PDS requirement
Surplus Stock
20
Pro
cure
-
men
t (1
9)
10
0
2009-10 2010-11 2011-12 2012-13
Pro
cure
men
t (4
9)40
11
Pro
cure
men
t (3
5)
30
24 L
MT
PD
S
Req
uir
emen
t
-5
90
9288 61
Pro
cure
men
t (8
5)
80
70
60
50
25
170
160
161
150
140
130
127
120
110
100
2
The Need - PaddyGrowth 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
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
ProcurementCenter on Date
Farmer
Procurement TransactionPerformed and Receipt is
given to Farmer
Ban
k Amount is credit to Farmers Account
1
2
34
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
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
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
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 CrBuilding & 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 of 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
Description INR Lakhs
Land & Site Development 0.70
Building and Civil Works 1445.63
Plant & Machineries 966.95
Electrical, Automation & other Utilities 287.50
Preliminary & Pre-Operative Expenses 218.77
Contingency 135.04
Total Block Cost 3054.58
Margin Money 8.93
Total Capital Cost 3063.52
Financial indicators
Value Unit
Project IRR 12.14% -
Equity IRR 14.05% -
DSCR 1.00 Times
Pay Back Period 9.96 Year
Notes:
Capital structure - 30% Equity & 70% Debt of the total project cost.
VGF – 0% for evaluation in the base case.
Utilization of facilities after 10years of guaranteed period - 100%
• Project Cost • Financial Indicators
19
FINANCIAL ANALYSIS
• Sensitivity Analysis
Availability of VGF Base Case 10% 20% 25% 30% 35% 40%
Total Project Cost 3063.52 2757.17 2450.81 2297.64 2144.46 1991.29 1838.11
Amount of VGF 0.00 306.35 612.70 765.88 919.06 1072.23 1225.41
Project 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
Utilization & VGF Availability of VGF
Equity IRR 14.05% 10% 20% 25% 30% 35% 40%
Utilization after 10 Years
100% 15.85% 18.23% 19.75% 21.57% 23.83% 26.68%
90% 14.87% 17.27% 18.80% 20.64% 22.93% 25.82%
80% 13.77% 16.16% 17.69% 19.55% 21.87% 24.83%
70% 13.12% 15.52% 17.07% 18.95% 21.29% 24.29%
60% 10.75% 13.19% 14.77% 16.70% 19.13% 22.28%
WACC – 9.97%Equity IRR > 12.00%
20
Procurement ProcessTwo 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 CAPACITYThe Applicant shall have a minimum Net worth of Rs. 30 Cr at the close of
the preceding Financial Year (March 2012).
TECHNICAL CAPACITYOnly 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 otherwise, 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 0.423
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 HardaHoshangab
adRaisen Satna Sehore Ujjain Vidisha Bhopal Indore
Sr.
No
Applicant Name/
Financial QuoteVGF
Reqd.
VGF
Reqd.
VGF
Reqd.
VGF
Reqd.
VGF
Reqd.
VGF
Reqd.
VGF
Reqd.
VGF
Reqd.
VGF
Reqd.
VGF
Reqd.
1Pristine
Logistics10.25 9.11 9.71 10.00 10.75 8.74 9.99 10.51
2Adani
Enterprise 2.11 2.91 2.41 2.31 3.11 2.21 2.41 2.21 3.51 3.11
3LT Foods
Limited6.26 12.20 11.30 11.46 6.26 5.77 6.11 11.70
0.05
Premium0.05
4Techno Electric
& Engineering - - 8.42 - - 5.82 9.85
5Veerprabhu
Marketing 10.70 11.38 10.70 9.41 - 7.95 - 9.41
6Sri Avantika
Contractors (I) - - 9.00 - - 9.00
7Total Shipping
& Logistics - - 5.25 -
0.01
Premium-
8Oakridge
Energy - 8.99 - - -
9Vishandas
Asnani1.65 1.45
LOWEST
BIDDERSAdani
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, 201327
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 locationsContd…..
28
Way forward
It is expected to store Wheat of
Rabi, 2015
in the Steel Silos
at 10 locations
in
Madhya Pradesh
29