BMTC cancels tender to lease 80 e-buses, to lose central subsidy

BENGALURU: Your wait for electric buses is set to get longer. The Bangalore Metropolitan Transport Corporation (BMTC) board meeting on Saturday decided to cancel the earlier tender to lease e-buses. The cash-strapped corporation will now float a new tender to purchase 80 e-buses costing Rs 1.5-Rs 2 crore each.
As reported by TOI, BMTC is likely to lose about Rs 74 crore subsidy from the Centre. The deadline for phase 1 of the FAME India (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India) scheme, initiated by the department of heavy industry (DHI), will expire on March 31. Last week, the Centre issued an ultimatum to the BMTC to issue supply order to the bidder to induct e-buses in the city by February 28, failing which it will miss out on the subsidy. BMTC will also have to return the Centre’s incentive (about Rs 15 crore) that had been released to it for the e-bus project.

Sources say the Centre is unlikely to extend the deadline as the second phase of FAME India will be launched in March-April. BMTC, which registered a cumulative loss of Rs 384 crore (till November 2018), is not in a financial position to purchase buses. And the state government which announced a loan waiver for farmers, may also not chip-in to fund the purchase of buses.

Now, with the BMTC cancelling the tender, the project is set to be delayed by another six months to one year. BMTC chairman NA Haris told TOI that they have decided to cancel the earlier tender of gross cost contract (lease model) and go for outright purchase model. “Purchasing electric buses is a more viable option than leasing out in the long run. We don’t want to go with the lease model because we want to outright purchase buses. We have a work force of about 34,000 people and we have to look at their future too. With these 80 electric buses, we could start training our staff”.

Haris said they will write to the Centre to extend the deadline for the subsidy by another six months. “We will invite a global tender and finalise a firm and use the subsidy. In fact, an IISc report stated purchasing buses will be more viable than leasing from a private firm,” he added.

The Centre had launched phase 1 of FAME scheme in 2015, offering subsidy up to 60% of the cost or Rs 1 crore (whichever is lower) for e-buses to be acquired by transport undertakings. The subsidy for BMTC to induct 80 e-buses amounts to Rs 74.8 crore (Rs 60 crore subsidy for 12m 60 AC e-buses and Rs 14.7 crore for 9m non-AC 20 e-buses).

BMTC was the first state road transport undertaking (SRTU) in the country to conduct trial runs of electric buses in 2014 and its board even approved the proposal in 2016 .However, the project got delayed after DC Thammanna, who’s been pushing for the purchase of these buses over the more feasible lease option, took charge as transport minister. Former BMTC managing director V Ponnuraj, who advocated the procurement of e-buses on lease, like in most cities, was eased out.