Biggest electric bus tender brings down operational cost at par with diesel buses

CESL has floated a collective tender of 5,450 electric buses for five cities, national capital Delhi, Kolkata, Hyderabad, Bengaluru and Surat, which was one of the biggest ever tenders for electric buses anywhere in the world.

New Delhi:The biggest ever electric bus tender floated by a public sector undertaking for the purchase of more than 5400 electric buses for five major Indian cities has resulted in the discovery of lowest ever price for electric buses under the central government's Faster Adoption and Manufacturing of Electric and Hybrid Vehicles in the country. Convergence Energy Services Limited (CESL), a PSU under the ministry of power, Tuesday announced that the price of electric buses discovered under its grand challenge scheme is the lowest ever price under the FAME-II scheme.

Operational cost comparable to diesel buses

CESL has floated a collective tender of 5,450 electric buses for five cities, national capital Delhi, Kolkata, Hyderabad, Bengaluru and Surat, which was one of the biggest ever tenders for electric buses anywhere in the world. “Prices discovered are the lowest ever and more importantly, at par with or very close to the operational cost of diesel buses,” CESL said on Tuesday.

While the lowest price discovered for a 12-meter bus is Rs 43.49 per kilometre, the price for a 9-meter bus is Rs 39.21 per kilometre. It includes the cost of electricity for charging the buses. Mahua Acharya, MD and CEO, CESL said that the rates we have witnessed today make electric buses extremely competitive across the country. “These rates are based on the terms and conditions of the tender and the sheer number of buses that cities have requested. The Grand Challenge will certainly encourage the faster transition to green mobility across the country while creating a synergy between private operators and state governments,” Acharya told reporters.

According to officials, this price will set a benchmark for public transport which will also encourage even the smaller cities to adopt electric vehicles. In this tender, the price of electric buses which has been discovered represents electric mobility as a service rather than electric bus as a vehicle, a relatively new and emerging business model that makes it affordable for state transport undertakings to adopt electric buses.

Green Mobility

According to officials, the value of the tender is over Rs 5,000 crores. And the buses are expected to operate around 4.71 billion kilometers over twelve years saving 1.88 billion liters of fossil fuel. This will result in 3.31 million tonnes of CO2e from tailpipe emissions, a major step towards mitigating climate change. Over 5450 electric that will be procured in a single tender for five cities will benefit from the central government subsidy offered under the remodelled FAME II scheme implemented by the ministry of heavy industries.

Officials said due to the extremely low price for electric buses, over Rs 360 crore could be saved in payment of the national subsidy which can be utilized for purchasing additional buses. As reported earlier by ETV Bharat in January this year, one of the biggest ever tenders for electric buses anywhere in the world, it included standardization of specifications for electric buses, depots and charging stations in the country. The contract term for operating electric buses is 12 years, with assured mileage of 1 million (10 lakh) kilometers per bus and a credible payment security system.

Make in India electric buses

Officials said that there will be special emphasis on the use of local content in the manufacture of these buses which will create employment for 25,000 people, and 10% of them will be women. This does not include new employment created through new manufacturing facilities. According to officials, a total of 9 cities are eligible to receive subsidies under the remodelled FAME II scheme and five of the nine cities participated in this tender.