- It is the second tender under the National Electric Bus Programme (NEBP)
- The deployment of 4,675 e-buses will significantly cut down air pollution while also saving around 15 lakh kilolitres of fuel every year
State-owned Convergence Energy Services Ltd (CESL) announced the floating of a tender for 4,675 electric buses worth ₹5,000 crores. Opening bids on behalf of various state transport undertakings, the company mentioned that it is the second tender under the National Electric Bus Programme (NEBP). Interestingly, Ashok Leyland-promoted Switch Mobility, PMI Electro Mobility, JBM, and Pinnacle became the highest bidders.
Notably, in a dry lease, the operator provides the buses to state transport corporations (STCs) without drivers or conductors. Such a model has been enabled in NEBP to maintain employment in STCs.
The CEO & MD of CESL, Mahua Acharya remarked, “I am thrilled to be launching yet another tender under the National Electric Bus Program. This just speaks of the leadership of states to transition over to electric. This tender was also uniquely designed in consultation with the participating states of Delhi, Telangana and Kerala, to whom I remain grateful for their collaboration.”
It is noteworthy that this tender covers Delhi, Kerala and Telangana. While Delhi will deploy 2,400 buses, Kerala and Telangana will deploy 775 and 1,500 electric buses respectively.
Acharya firmly believes that the government’s target to put 50,000 electric buses on the road in three years can be crossed much earlier. She said: “Demand for electric buses from STUs is not an issue. It’s a no-brainer because we have demonstrated that running electric buses reduces operating costs by 30 per cent (and that is without taking into consideration subsidies given under FAME II to buses) compared to a diesel bus. We have also cracked the business model.”
It must be noted that the tender includes three types of electric buses: 9-m standard floor AC, 12-m low floor & standard floor non-AC, and AC electric buses. While the service providers will own these buses for 10 years and maintain them for a period of 12 years, they will be operated by the STCs. Service providers will get a monthly fee for each bus.
Acharya termed India’s National eBus program as an international case study. “For us domestically, this program demonstrates the commitment of the Prime Minister to mitigate climate change, reduce fuel bills and address air pollution. The economic value of a 50,000-eBus program is huge – and I look forward to seeing the market realize this value.”
However, she opined that there exist two major challenges to the electrification of buses: the lack of adequate finance for manufacturing buses and the fear of financially strained STUs defaulting.
As per the company, the above-mentioned tender is valued at around ₹5,000 crores and majorly involves the cost of the bus. Bidders and STCs alike are mandated and encouraged to employ women and create opportunities for a safe environment for them to work, added the company.
A wholly-owned subsidiary of Energy Efficiency Services Ltd (EESL), Convergence Energy Services Ltd (CESL) was set up in 2020 to bridge gaps in the energy renewable ecosystem.