CESL tender finds 29% cheaper price for e-buses versus diesel buses | The Financial Express

CESL tender finds 29% cheaper price for e-buses versus diesel buses

CESL was mandated by NITI Aayog under the then CEO, Amitabh Kant, to implement a national programme of 50,000 e-buses.

PMI Electric Bus
Image for representational purpose only.

Convergence Energy Services (CESL), a wholly-owned subsidiary of Energy Efficiency Services (EESL) has announced prices discovered for the biggest non-subsidised demand for 6,465 electric buses. The unified tender constitutes demand for electric buses from six Indian states & UTs – Delhi, Telangana, Haryana, Surat (Gujarat), Kerala & Arunachal Pradesh.

This is the first tender under the National Electric Bus Programme (NEBP), which found the lowest price discovered for a 12-metre bus (intra-city) at Rs 54.3/km, & 12-metre bus (inter-city) at Rs 39.8/km. For a 9-metre bus, the price discovered is Rs 54.46/km and a 7-metre bus at Rs 61.92/km. The prices do not include a subsidy and are 29 percent lower than what it costs to operate diesel buses.

The e­-buses will be deployed both within city limits and on intercity routes, with the latter being able to do 325km on a single charge. The contract will benefit from terms and conditions standardised through the Grand Challenge process and will be eligible to gain from a payment security fund currently under consideration by the government of India.

The tender is valued over Rs 30,800 crore, wherein the buses are expected to operate around 5,718 million kilometres over 12 years, saving 1,842 million litres of fossil fuel. This will result in 4.62 million tonnes of CO2e from tailpipe emissions, a major step towards mitigating climate change. Under the Gross Cost Contract (GCC) model, the private operator will be responsible for the bus and operation for a period of 10- and 12-years against pre-determined conditions as set out in the tender. STUs on their part pay a fee for the bus service.

Mahua Acharya, MD & CEO, CESL said “This is a remarkable step in helping to transform our state transport authorities and build out a new market for electric mobility in India. Of course, a tender such as this is also witness to the commitment of the country in achieving the goals set by the Prime Minister to mitigate climate change and better the quality of life of our citizens.”

“This tender is a part of the central government’s vision to deploy 50,000 electric buses on the roads in the next few years, whilst strengthening, modernizing and greening public transport in India,” added Acharya.

The National Electric Bus Programme, which aims to effect the deployment of 50,000 e-buses across the country, is envisioned to aggregate demand, support state transport undertakings to integrate electric buses into their operations, and work with states and DISCOMs alike to support the creation of charging infrastructure at their depots.

The prices realised set a benchmark for public transport, the price point for which may encourage even the smaller cities to adopt electric vehicles. This price discovery represents ‘electric mobility as a service’, a relatively new and emerging business model that makes it affordable for state transport undertakings to adopt electric buses.

CESL was mandated by NITI Aayog under the then CEO, Amitabh Kant, to implement a national programme of 50,000 e-buses. The mandate came after CESL managed a 10-month long process that gave rise to a unified tender of 5,450 e-buses – the Grand Challenge with homogenised terms and conditions under the FAME-II subsidy programme and discovered prices that were 27 percent and 25 percent lower than diesel and CNG respectively, without considering the subsidy.

The process of homogenisation started in July 2021, following a Gazette of India notification dated June 11, 2021 issued by the Ministry of Heavy Industries.

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First published on: 03-01-2023 at 14:24 IST