DTC’s foreign bus plan could hit Tata, Leyland

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SummaryTata Motors and Ashok Leyland could lose orders for about 600 low-floor buses to be purchased by the Delhi Transport Corporation (DTC) to Chinese, Polish and Swedish manufacturers.

In what could spell fresh trouble for the commercial vehicle industry caught in a slump, Tata Motors and Ashok Leyland could lose orders for about 600 low-floor buses to be purchased by the Delhi Transport Corporation (DTC) to Chinese, Polish and Swedish manufacturers.

Ramakant Goswami, transport minister for Delhi, told FE: “The price and maintenance costs quoted by Tata were unrealistic; so, we have asked a few foreign companies to run buses, on a trial basis, on Delhi roads.” Goswami said foreign manufacturers were willing to sell the buses cheaper, though he did not spell out the price difference. Safety and quality issues with the current fleet also prompted the government to invite foreign manufacturers for the bus tender. The DTC had acquired the current fleet in the run-up to the Commonwealth Games in 2010.

A DTC spokesperson said Tata Motors, which had quoted R51 lakh per bus in 2009, is now asking for R76 lakh, or 50% more. Maintenance costs too have soared from the initial R3/km to R75/km.

“The higher price quoted by Tata Motors is because the engines need to be more powerful than they were earlier,” the spokesperson added.

The 600-bus lot will be the first part of a 1,725-unit order under the JNNURM scheme this year.

The latest tender was cancelled and fresh bids invited, since the only bidder in the first round was Tata Motors, which quoted high prices. A foreign player agreeing to sell buses cheaper, at lower maintenance costs and with a promise of better quality, could win the tender.

A Tata Motors spokesperson said the company was working with the government to finalise bus specifications for city conditions including additional power requirements. “In spite of DTC floating a global tender, Tata Motors was the only manufacturer to respond. Tata Motors' competitive position also comes from its more than five years of experience in Delhi in maintaining their bus fleet of over 2,500 buses, ensuring on-road fleet availability of more than 95%. Tata Motors has not yet been officially informed on cancellation of the tender. The prices quoted were in line with the additional

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