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State-run Convergence Energy Services (CESL) on Tuesday said that it has discovered the lowest ever prices for the biggest ever demand for electric buses in the country.
“Grand Challenge tender comprises demand for 5,450 buses across five major Indian cities – Kolkata, Delhi, Bangalore, Hyderabad and Surat. Prices discovered are the lowest ever and more importantly, at par with or very close to operational cost of diesel buses. The lowest price discovered for a 12-meter bus is ₹43.49 per km, and a 9-m bus is ₹39.21 per km. This includes the cost of electricity for charging the buses,” said the Power Ministry in a statement.
Prices realised set a benchmark for public transport, the price point for which may encourage even smaller cities to adopt electric vehicles (EVs), it added.
Limiting CO2 emissions
The value of the tender is over ₹5,000 crore and the buses are expected to operate on around 4.71 billion kilometers over twelve years, saving 1.88 billion liters of fossil fuel. This will result in a reduction of around 3.31 million tonnes of CO2 from tailpipe emissions, a major step towards mitigating climate change.
“Prices discovered represent electric mobility as a ‘service’, a relatively new and emerging business model that makes it affordable for state transport undertakings to adopt electric buses. In an industry first, the Grand Challenge tender homogenises demand for electric buses, making this a step closer to standardisation of modern public mobility,” the ministry said.
Buses will benefit from the Central government subsidy offered under the remodelled FAME II scheme administered by the Ministry of Heavy Industries. With the very low discovered prices under the Grand Challenge, a savings of approximately ₹361 crore of national subsidy can be realised which, in turn, may be utilised for additional buses, it added.
Employment generation
The challenge constitutes best-in-class tender conditions, including standard specifications for buses, depots and charging stations. The contract term is 12 years with assured kilometers of 10 lakh per bus, and a credible payment security system. Special emphasis was paid to the requirement for domestic content, specifications for which are the highest to date.
At least 25,000 people will be employed through this tender, of which 10 per cent will be women. This does not include new employment created through new manufacturing facilities.
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. Nine cities are eligible to receive subsidies under the remodeled FAME II scheme. Of these, 5 have participated in this tender. All major bus manufacturers participated in the tender.
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