Telangana cancels paddy tenders, calls for fresh bids

Upset over the poor response to the global tenders it called for selling 25 lakh tonnes of rabi paddy from the 2022-23 season, the Telangana government has cancelled the process. It has called for fresh bids, significantly tweaking the norms to make smaller traders join the fray.

The rates that were quoted were less than the procurement costs and would have left the government with losses.

With the kharif season progressing well and the new crop expected to arrive over the next few weeks, the Government wants to clear the warehouses of old stocks to make way for fresh arrivals.

In a marked difference, the State government has drastically reduced the size of the lots and eased norms, allowing local millers and traders to take part in the bidding process.

Seeing poor response last time, the government has divided the stocks into over 160 lots against just six lots (five lots of four lakh tonnes each and the sixth with five lakh tonnes) in the previous tenders. Each lot carries 15,000 tonnes, requiring the bidders to deposit ₹87.75 lakh each as EMD (earnest money deposit).

Norms tweaked

Keeping in mind the criticism that it faced last time for keeping the turnover eligibility very high at ₹1,000 crore, the State Government reduced it to just ₹ 10 crore to make even local traders and millers take part in the tender process. The EMD size, too, has been reduced to just under ₹90 lakh this time against ₹29 crore last time.

Rice millers in the State were unhappy as the eligibility criteria set for the e-auction was not inclusive. 

The last date for submitting the bids is October 17. “We will open the technical bids the same day and the financial bids on October 20,” an official said.

Stocks overflowing

The Civil Supplies Department had procured 65 lakh tonnes of paddy in the rabi season last year by spending over ₹14,000 crore. It, however, faces a daunting task to clear the stocks as the Union Government is insisting on procuring only raw (white) rice and not parboiled rice.

Millers wanted the State to increase the milling charges as the recovery rate from the rabi rice would be less if they were to deliver raw rice. They generally go for parboiled rice to address the challenge of brittleness of the grain exposed to harsh temperatures in the summer.

In order to avoid yet another tussle with the Centre, the State Government had decided to sell the stock through global tenders.

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