CESL issues Rs 5,500 crore tender to procure 5,580 e-buses

Giving a big thrust to the adoption of electric buses for public transport in the country, Convergence Energy Services (CESL), a wholly-owned subsidiary of Energy Efficiency Services (EESL) has floated a request for proposals (RFP) for what is said to be the world’s biggest ever demand for electric buses, under the ‘Grand Challenge’ – a set of homogenised demand for electric buses aggregated across five major cities.

The tender estimated to be valued at Rs 5,500 crore aims to procure 5,450 electric buses and 130 e-double-decker buses. The grand challenge scheme aims to reduce the operating costs for cities, removing bottlenecks of procuring e-buses by State Transport Undertakings (STUs), instituting best in class practices, and operating standards and enabling operational and passenger efficiencies by evolving into a platform for modernisation of city bus.

The cities to be covered under this ‘Grand Challenge’ are Bangalore, Delhi, Surat, Hyderabad, and Kolkata in the first phase. The first lot of e-buses are expected to hit the roads by July this year. 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.

Mahua Acharya, MD and CEO, CESL said ‘The real meaning of aggregation across cities under an OPEX model is actually homogenisation. This Grand Challenge Tender represents efforts by so many people – STUs, OEMs, financiers, NITI Aayog, DHI and of course my colleagues. This 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.’’

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.”

Kant further highlighted that while India has low vehicle penetration of 20 cars per 1,000 people, compared to 800 per 1,000 in the USA, vehicle growth cannot follow the US market. “Public transportation remains key which needs to be inclusive, safe and zero emissions. The drive towards e-mobility should not be just through private mobility; the focus should be on moving people and not vehicles. This can only be done through public transportation.”

He said, India has taken a lot of initiatives including Rs 10,000 budget outlay for the FAME II scheme, which sees 35% of the budget allocated to e-buses procurement. The idea behind Grand Challenge is to converge and integrate the demand to reduce the prices of e-buses. He commended CESL for taking up the biggest challenge in the world, which was unprecedented as no one has standardised the tender up to this extent. This he says will help attaint COP26 target in the stipulated time limit.

Interestingly, he said OEMs like Tata Motors, Ashok Leyland, JBM, Olectra and companies from South Korea were expected to participate in this.

Kailash Gahlot, Transport & Environment Minister of Delhi said, “I am pleased to announce today that Delhi has requested 1,500 buses under the Grand Challenge and stands ready to offer state subsidies where they are required. We are aggressively pursuing electric mobility – and I commend CESL for its efforts to standardise the terms and conditions for how this is delivered.”