TATA Motors bags CESL tender for 5450 e-buses worth over INR 5,000 crores

Convergence Energy Services Limited (CESL), a PSU under the Ministry of Power has announced prices discovered for its biggest ever demand for electric buses.

The lowest price of 12m low floor AC buses is quoted at INR 47.49 Rs per km, 12m low floor Non-AC at INR 43.49 per km, 12m standard floor Non- AC at INR 44.99 per km, 9m standard floor AC at INR 41.45 per km and 9m standard floor Non-AC at INR 39.21 per km. This includes the cost of electricity for charging the buses. TATA Motors won the tender in all categories, Amitabh Kant (CEO – Niti Aayog) shared on Twitter. All major bus manufacturers participated in the tender.

– The Grand Challenge tender comprises demand for 5450 buses across five major Indian cities – Kolkata, Delhi, Bangalore, Hyderabad and Surat. Prices discovered are the lowest ever and very close to the operational cost of diesel buses, said a government release.

– The value of the tender is over Rs. 5000 Crores. The buses are expected to operate around 4.71 billion kilometres over 12 years saving 1.88 billion litres of fossil fuel. This will result in 3.31 million tonnes of CO₂ from tailpipe emissions.

– The contract term is 12 years, with assured 10 lakh kilometres per bus, and a payment security system.

– Prices discovered represent electric mobility as a “service”, a business model that makes it affordable for state transport undertakings to adopt electric buses.

– Buses will benefit from the central Government subsidy offered under the remodelled FAME II scheme administered by the Ministry of Heavy Industries.

– With the very low discovered prices under the Grand Challenge, a savings of approximately Rs. 361 Crores of national subsidy can be realized, which in turn may be utilized for additional buses – added the statement.

The process of homogenization started in July 2021, following a Gazette of India notification dated 11^th June 2021issued by the Ministry of Heavy Industries. 9 cities are eligible to receive subsidy under the remodeled FAME II Scheme. Of these, 5 participated in this tender.