CWC plans to offer its vacant land, godowns for creation of cold storages on PPP mode
New Delhi: The Central Warehousing Corporation (CWC) has identified 45 locations across 17 states where it plans to offer its vacant land or existing godowns/warehouses for creation of cold storages, controlled/modified atmosphere storages on public-private partnership (PPP) mode.
Of these, 16 locations are bundled into two each while 29 are individual locations where private operators will be asked to construct new buildings or retrofit existing structures (whose age is less than 30 years) for commissioning the cold storage.
The time given for construction or redevelopment would be nine months from the appointed date whereas for retrofitting it would be six months. The PPP model would be Design, Build, Finance, Operate and Transfer with operators getting a concession period of 15 years excluding construction, redevelopment or retrofitting period.
An investor may also develop these cold storages on Build to Suit basis where it would get a longer concession period if it decides to demolish the existing warehouse and construct a new facility.
A bidder could be a company, proprietorship, partnership, foreign investment fund, alternate investment fund, cooperative, society or trust, and the successful bidder would have the freedom to finance the project by itself or through debt or shareholder loan for which it could approach the financial institutions.
The bidding parameter would be the annual concession fee where the bidders would quote the percentage increase over and above the existing base deadweight tonnage rates for the first year. The bidder offering the highest assessed annual concession fee shall be selected as the concessionaire. “Concessionaire would be free to charge or fix the user fee which shall be determined by it as deemed appropriate as per market conditions and fair market practices,” says the CWC concept note. The returns have been assessed for a threshold equity return of 12 percent per annum and there would be no viability gap funding or Government of India guarantees, it adds.
CWC said that while it had projected an estimated cost for each location, it had left it on the bidders to decide on the technology, capacity and specifications considering that most investors are keen on setting up low-cost units to make it more economically viable. The aim was to reduce the time in commissioning of a project, which was a tedious process.
