Convergence Energy Services floats biggest ever tender for electric buses

Aims to deploy 5450 single decker buses and 130 double decker buses through the scheme

Convergence Energy Services (CESL), a wholly owned subsidiary of Energy Efficiency Services (EESL), on Thursday announced the floating of a request for proposal for the biggest-ever demand for electric buses (e-buses) under the Grand Challenge scheme.

Through the Rs 5,450-crore tender, CESL aims to deploy 5,450 single-decker buses and 130 double-decker buses. It will include a set of homogenised demand for e-buses aggregated across five major cities.

From working on financing electric vehicles (EVs) and setting up a charging infrastructure (infra) to floating tenders for EVs, the EESL subsidiary has been playing a pivotal role in pushing electrification in the public transport space. EESL recently closed a tender for 150,000 electric three-wheelers, at prices 18-20 per cent lower than the retail price.

The 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, enabling operational and passenger efficiencies by evolving into a platform for modernisation of city buses, CESL said in a statement on Thursday.

STUs are no longer buying buses as they don’t have the financial wherewithal to buy regular models, let alone EVs which are a lot more expensive than internal combustion engine-powered models, said Mahua Acharya, managing director and chief executive officer (CEO), CESL. The buses are financed either by bus makers or financial institutions.  

"They (public transit companies/STUs) are now moving towards a gross cost contracting model, wherein they procure service based on the terms and conditions defined in the tender document. Based on that, price is discovered in the market," said Acharya.

"This is the biggest-ever scheme in the world and is based on an asset-light model that makes it possible for STUs to deploy affordably - and at scale," she added.

"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 will stand to gain from economies of scale through the aggregation of demand by CESL,” said Amitabh Kant, CEO, NITI Aayog, in a statement.

Transport and Environment Minister of Delhi Kailash Gahlot said his government has sought 1,500 buses under the Grand Challenge and is ready to offer subsidies where required. “We are aggressively pursuing electric mobility. I commend CESL for its efforts to standardise the terms and conditions for how this is delivered,” he said.

The cities to be covered under Grand Challenge are Bengaluru, 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 scheme include lower prices realised due to aggregate demand, high-quality benchmarked technology, access to FAME-II/state incentives and domestic and international sources of finances, and air quality improvement.