delhi: Delhi govt buying e-buses at higher rate than price discovered in tender

Delhi’s transport department is procuring electric buses at a price much higher than that discovered in a tender by Convergence Energy Services Ltd (CESL), the company that handles the acquisition of electric vehicles under central schemes, a person in the know said.

The Delhi government will be paying almost ₹61.15 a km for 330 buses against the lowest quote of ₹47.49 a km in a CESL tender floated in January this year for 5,450 buses, both including electricity charges.

Accounting for a higher subsidy for the buses, the rate under the Delhi tender increases to almost ₹68 per km.

At this rate, the cost of operating these buses over a 10-year period would be ₹500 crore higher compared with the price discovered in the CESL tender, the person said.

Delhi transport minister Kailash Gahlot said such a price difference was because of the order size, with CESL’s order being several times larger than that of the Delhi

.

In fact, last week, the Delhi cabinet approved the procurement of 1,500 electric AC buses at a rate of ₹47.49 per km under the central scheme, Faster Adoption and Manufacturing of Hybrid & Electric Vehicles (FAME). These buses, from the larger tender floated by CESL, are of the same size as those in the 330-bus order, which is under a Delhi government scheme.

The procurements involve a subsidy payment for the companies that supply and maintain the buses. The Delhi government will be paying ₹75 lakh per bus under the 330-bus order. The subsidy under the CESL tender is ₹45 lakh each, which is what Delhi will pay for the 1,500-bus order as well. The impact of the higher subsidy will be about ₹7.50 a km, based on CESL’s formula of ₹0.25 per km for every ₹1 lakh of extra subsidy.

If the Delhi government awards the order at these higher prices, it could result in a huge dent to the exchequer. Over a 10-year period, this is expected to cost the government ₹500 crore extra, the person said.