Largest tender for 8,000 electric state buses on cards

In an effort to accelerate the shift to clean mobility in public transport, the government is considering its largest-ever tender to purchase nearly 8,000 electric buses for state transport companies (STUs) across the country.

This is the second government tender to encourage STUs to replace aging, polluting diesel buses with electric ones. Earlier this year, Convergence Energy Services Ltd (CESL) – the state-owned company that purchases electric vehicles for central and state government services – launched a tender to purchase 5,580 electric buses. The tender was valued at around Rs 5,500 crore.

Tata Motors won the majority of the contracts to supply approximately 5,000 buses under the scheme. CESL has started deploying 5,450 electric buses in five cities – Delhi, Kolkata, Bengaluru, Surat and Hyderabad.

CeSL director Mahua Acharya told ET the scheme is based on an asset-light model that will enable STUs to deploy cleaner vehicles affordably and at scale.

“We are looking at mobility as a service rather than outright procurement to enable STUs to swap their existing fleet for electric buses. Their balance will remain light. Also, the aggregation of demand will allow for economies of scale and help achieve lower prices,” said Acharya.

Even without incentives, aggregating demand based on a gross cost contract model from all states helped achieve 27% and 23% lower rates for electric buses compared to diesel-powered and compressed natural gas buses in the tender launched by CESL in January 2022. streamlining and mitigation measures helped boost competition, leading to record low prices of Rs.39.21/kilometre for 9m e-buses and Rs.43.49/kilometre for 12m low floor e-buses (including the cost of charging).

Acharya informed: “From different indication levels, there is currently demand for an additional 8000 electric buses. We have asked the STUs to evaluate the required specifications (7m/12m electric buses), consult their board and formally ask an informed question.”

Overall, CESL is working with the Ministries of Finance, Energy, Road Transport, Heavy Industries, Urban Development and Environment to develop a holistic plan to get about 50,000 electric buses on the road in the United States by the end of the decade. under the National Electric Bus Program. “Whether it’s social or environmental, buses are an area of ​​greatest impact. Switching from public transport buses to electric would significantly help reduce fuel bills,” she said.

Acharya said that given the experience of the costs realized in the previous tender, it is no longer necessary to justify the cost of electric buses, which are cheaper even without subsidies. She added: “But STUs are not in the best financial health. They cannot raise rates. What we need is a set of risk mitigation tools to secure payments and ensure the scheme is fail safe.”

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