Oriental Insurance to cover FCI transit losses

The Food Corporation of India (FCI) has roped in the Oriental Insurance Company to provide insurance cover to foodgrains against transit losses through rails or road. The measure is intended to cut down transit losses of about Rs 125 crore a year.

Under a memorandum of understanding (MoU) signed between the FCI and the insurer, the latter would provide cover for grains from the weighing point at the stock dispatching station to the weighing point at the receiving end.

The portion of transit of stocks by road from the weighing point to the rails head would also be insured against losses.

According to the FCI, the measure has been necessitated by the Railways' reluctance to issue clear documents (RRs), absolving itself of the responsibility to compensate for transit losses.

This has also been adversely affecting carriers of the concerned FCI employees, as they have to face disciplinary action even for the Railways' lapses.

The FCI moves foodgrains worth nearly Rs 2,772 crore annually through rails. Although the transit losses in physical terms are less than one per cent of the total movement, these amount to over Rs 125 crore a year.

The Oriental Insurance would now take necessary steps, including appointment of surveyors, to prevent these losses. The FCI expects considerable saving of foodgrains, which would be reflected in lower food subsidy and better operational efficiency of the organisation.