The Food Corporation of India (FCI) on Monday rejected allegations of favouritism and promotion of monopoly in the award of silo projects, asserting that the tendering process was open, transparent and conducted in accordance with established procurement norms.
The statement comes on the heels of a Newslaundry investigative report that claimed the department of economic affairs and Niti Aayog pushed the FCI to drop an "anti-monopoly" clause from tenders under its "Hub and Spoke" silo modernisation programme, enabling Adani Agri Logistics Ltd and Leap India Food & Logistics Pvt Ltd to secure 110 of the 134 contracts awarded across two phases of the nearly Rs 20,000-crore scheme.
The report alleged that the “duopoly” dominates India's largest modern grain storage programme. Similar concerns were raised by the All India Kisan Sabha (AIKS), which claimed the project had resulted in significant market concentration and increased corporate control over public food security infrastructure.
In a joint statement, AIKS president Ashok Dhawale and general secretary Vijoo Krishnan said that the FCI had originally proposed an anti-monopoly clause but that it was later removed during a public private partnership appraisal committee (PPPAC) meeting in May 2022 at the behest of the department of economic affairs and Niti Aayog.
Rejecting the allegations, the FCI said the fact that Adani secured projects in Phase I but did not win any project in Phase II, while other bidders were successful in subsequent phases, demonstrated that there was no preferential treatment, exclusionary practice or bias in the tendering process.
The decision not to impose any restrictions on participation was taken collectively in view of the growth potential of the sector, the FCI said, adding that all eligible bidders were allowed to participate through a transparent bidding process.
"The allegation that the bidding process was restrictive, non-transparent, or designed to favour any particular bidder is unfounded," the corporation said.
The procurement process was open, transparent and competitive, and provided equal opportunity to all eligible participants, it added.
The FCI said its silo development programme was launched to promote scientific warehousing through the creation of modern storage infrastructure under the public-private partnership (PPP) model while encouraging greater participation by private sector entities in the development and management of foodgrain storage facilities.
The corporation explained that the silo sector is a "sunrise sector" with significant growth potential and argued that restricting participation in bidding to a limited set of entities could reduce competition, discourage innovation and constrain investment.
According to the FCI, tender notices for both Phase-I and Phase-II silo projects were widely publicised through multiple channels in line with procurement procedures. It maintained that the tender conditions were uniformly applicable to all bidders and that no special preference or relaxation was extended to any particular entity.
"These measures ensured broad participation and competitive price discovery in the public interest," the statement said.
The FCI further said project awards were determined solely based on competitive bidding outcomes and quoted rates.