CESL floats ₹5,500 crore tender for 5.5k electric buses

A PSU under the ministry of power, CESL has floated the single tender for 5,450 single-decker and 130 double-decker e-buses.

New Delhi: The state-run Convergence Energy Services Ltd (CESL) on Thursday launched a ₹5,500 crore tender to procure 5,580 electric buses. A PSU under the ministry of power, CESL has floated the single tender for 5,450 single-decker and 130 double-decker e-buses.

he tender floated was the outcome of the “Grand Challenge” plan for e-buses which was initiated in June last year by the ministry of power and NITI Aayog. (Hindustan Times)

The tender floated was the outcome of the “Grand Challenge” plan for e-buses which was initiated in June last year by the ministry of power and NITI Aayog. It was ideated after several state governments floated tenders with unstructured standards for e-buses and failed to get bidders. Gauging the lack of uniformity in the technical and financial specifications, the Centre decided to aggregate the demand of a few big cities as an experiment, which was then termed as the grand challenge. The grand challenge was open for nine cities with a population of more than 4 million, but ultimately five were able to meet the set requirements in terms of finances and paperwork.

Now under the programme, Kolkata will get 2,000 pure electric buses, Delhi and Bengaluru will have 1,500 e-buses each, while Hyderabad will get 300 and Surat 150 such zero emission buses. The first set of buses will start coming from July this year and the buses will go to cities as per the depot infrastructure readied by them. All the buses will have to be deployed maximum by March 2024, a senior CESL official said on condition of anonymity. Documents seen by HT showed that out of the five cities, Delhi currently is in the most advanced stage of upgrading all its depots with electric charging infrastructure for the buses.

“The real meaning of aggregation across cities under an OPEX model is actually homogenisation. This Grand Challenge Tender is the biggest ever scheme in the world – and is based on an innovative, asset-light model that make it possible for STUs to deploy affordably and at scale. 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,” said Mahua Acharya, MD and CEO, CESL.

This is significant because most buses used for public transport in all these cities run on diesel, with Delhi being the only exception where all buses are CNG propelled. Diesel run buses are heavily polluting. Acharya said this is one important step in the series of initiatives to fulfil the commitments made by Prime Minister Narendra Modi for making India a net zero nation by 2050 and getting closer to achieving energy independence by 2047.

The benefits of participating in the Grand Challenge include lower prices realised due to aggregated demand, high quality benchmarked technology, access to FAME-II incentives, access to state incentives, air quality improvement, and access to domestic and international sources of finances. “The subsidy amount is actually for 3,472 buses, but we got oversubscribed in the grand challenge. After discussions, the concerned state governments agreed that they would pay the balance amount for the remaining buses at the price discovered during the tender process without the subsidy,” said the official.

Amitabh Kant, CEO, NITI Aayog said, “Standardising tendering conditions in diverse cities is a big step towards the transformation of public transport in India. Participation in the Grand Challenge is a commendable effort from STUs, who I am sure will stand to gain from economies of scale through the aggregation of demand by CESL.”

Kailash Gahlot, Delhi’s transport minister said, “Delhi has requested 1500 buses under the Grand Challenge. The national capital stands ready to offer state subsidies where they are required. We are aggressively pursuing electric mobility – and I commend CESL for its efforts to standardize the terms and conditions for how this is delivered.”