Government Seeks Proposals from States for 5,000 Electric Buses

Maximum subsidy for states fixed at 40%


The Department of Heavy Industries (DHI) under the Ministry of Heavy Industry and Public Enterprises has invited expressions of interest from state transport departments for the deployment of 5,000 electric buses.

This procurement under the second phase of Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME-II) program and the deployment of electric buses will be on an operational cost model basis. The Union Cabinet recently approved the proposal for the implementation of this program aimed towards the promotion of electric mobility in the country. The program has a total budget of ₹100 billion ($1.41 billion), which is expected to be deployed over three years with effect from April 1, 2019. The program is an extension of FAME India, which was launched on April 1, 2015, with a total outlay of ₹8.95 billion (126.2 million).

The focus of the government in this phase is on the electrification of public and shared transportation, with the government planning to support 5,000 e-buses at a total outlay of ₹350 million ($5.05 million).

The EoI has been issued to invite proposals from state and union territories, government departments, state or city transport utilities, municipal corporations, and any other public utility interested in the deployment of e-buses for public transport.

The primary objective is the reduction in vehicular pollution in Indian cities.

The government notification has stipulated that initially, proposals will be invited from cities that fulfill any one of the following criteria in order to be eligible: a million plus population as per census 2011, smart cities as notified by the government, and satellite towns connected to metros like Delhi, Mumbai, Kolkata, Chennai, Hyderabad, Bangalore, and Ahmedabad.

It also adds that apart from these criteria, capital cities of states and union territories, and intercity bus operations connecting these cities are also eligible to apply.

At the time of submission of the EoI, the cities are required to provide guarantees for the allotted e-buses to be running at least 500,000 kilometers during the contract period.

The maximum demand incentive under the FAME-II has been categorized as: for standard length e-buses ₹5.5 million ($79,374), for midi e-buses ₹4.5 million ($64,942) and for mini e-buses ₹3.5 million ($ 50,510).

The selection parameter of the EoI states that the deployment of EV in a state requires developing the entire ecosystem including the relevant policies, affordable power availability, EV charging infrastructure, parking space, concession in registration fees. Therefore, the applicant must furnish all these relevant details along with the application.

For intercity, a separate EV policy of the concerned states, their registration fees, road tax applicable for EVs, the state’s policies for preferential permit regime for commercial EV, if any, need to be furnished.

Once the cities qualify for funding, the final selection will be based on the weighted average of the total assured run in kilometer per e-bus, during the entire contract period.

The deadline for submission has been set for July 18, 2019, with each state transport undertakings (STUs) having a mechanism for online monitoring of performance.

As per the EoI, the STUs need to work out a model concession agreement as prepared by NITI Aayog. The bidding will be based on gross cost contract (GCC), and the entities are to complete the procurement within three months from the approval of the order.

The government will form a screening committee, and the recommendations of the committee will be sent to the project implementation and sanctioning committee (PISC). The PISC then forwards it to the DHI for approval, along with the internal finance wing’s, after which the STUs will be intimated for initiating and completing the procurement process.

The eligibility for this proposal is for an Indian company with a manufacturing facility in India; with Central Motor Vehicle Rules 1989 certification and approval of at least one type of model of e-bus (100% battery operated).

Recently, Kerala State Road Transport Corporation (KSRTC) issued a tender to lease 1,500 electric buses.  It has issued three separate tenders for 500 (500*3) electric buses for ten years. The three tenders pertain to three different zones: Thiruvananthapuram, Kozhikode, and Ernakulam. The tender calls for 12-meter non-AC electric buses (Battery Powered) on wet or dry lease.

Other states like Goa and Delhi have also issued tenders for the procurement of electric buses in the recent past.

Soumik is a staff reporter at Mercom India. Prior to joining Mercom, Soumik was a correspondent for UNI, New Delhi covering the Northeast region for seven years. He has also worked as an Asia Correspondent for Washington DC-based Hundred Reporters. He has contributed as a freelancer to several national and international digital publications with a focus on data-based investigative stories on environmental corruption, hydro power projects, energy transition and the circular economy. Soumik is an Economics graduate from Scottish Church College, Calcutta University.