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FG concessions 33 silos, saves N100bn

By on October 17, 2013

The Federal Government is to save N100bn from the concession of 33 silo complexes in 32 states of the federation including the Federal Capital Territory, the Minister of Agriculture and Rural Development, Dr. Akinwunmi Adesina, has said.

Adesina stated this during the signing of a memorandum of cooperation between his ministry and the Infrastructure Concession Regulatory Commission on the concession of the silos.

The MoC, according to the minister in a statement, was the continuation of the process of synergy with the private sector to manage and operate silo complexes across the country.

He said, “Running and managing these huge infrastructures is extremely expensive. At the current guaranteed minimum price rate, about N100bn will be required by the ministry to stock the silo complexes.

“The government does not have the resources to manage them. We therefore want the private sector to lease the huge storage infrastructures to improve their management, efficiency and profitability.”

He noted that the silo complexes were part of the ministry’s storage infrastructure under the Strategic Grains Reserves.

Adesina said the network of the SGR silo complexes was established to provide immediate food relief in times of emergency, provide appropriate mechanism, guarantee minimum price scheme to make farmers earn remunerative prices for their produce, provide a mechanism for price stabilisation and storage capacity for excess production, and reduce post-harvest losses.

He stated that the 13 of the silo complexes with a total storage capacity of 311,000metric tons were in existence and operational before the present government came on board.

According to him, the remaining 20 complexes were completed by the present administration to bring the total to 33, with a total storage capacity of 1.3million metric tons.

Adesina said the concession would be done in a transparent manner and in partnership with the ICRC in line with the extant regulations.

The Director-General, ICRC, Mr. Aminu Dikko, said the MoC would enable due diligence and diagnostic study of the silo complexes and develop appropriate economic models for Public Private Partnership transactions.

The Director, SGR, Dr. Jide Olumeko, said the signing of the MoC would bring the capacity utilisation of the silos, which is currently less than 10 per cent, to about 100 per cent after the concession.

Olumeko said the memorandum between the ministry and the ICRC would spell out the roles and responsibilities of each party to the MoC towards the actualisation of the proposed concession exercise.

 

 

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