CESL launches tender for 5,500 electric buses in 5 cities

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Convergence Energy Services (CESL), a wholly-owned subsidiary of Energy Efficiency Services (EESL), on January 20 announced a tender for 5,500 electric buses in five cities — Delhi, Kolkata, Surat, Bengaluru and Hyderabad.

CESL aims to deploy 5,450 single decker buses and 130 double decker buses as support for state governments to achieve their electric mobility targets and build infrastructure for it in India. This is part of the ‘Grand Challenge’ scheme – a set of homogenised demand aggregated across five major cities for electric buses in India, as per a statement.

Tender value is estimated to be Rs 5,500 crore and the first lot of e-buses are expected to hit the roads by July this year, it added.

“This Grand Challenge Tender represents efforts by so many people … (it) is the biggest ever scheme in the world – and is based on an innovative, asset-light model that make it possible for STUs to deploy affordably and at scale,” said Mahua Acharya, MD & CEO, CESL.

It aims to reduce the operating costs for cities, remove bottlenecks of procuring e-buses by State Transport Undertakings (STUs), institute best-in-class practices and operating standards, and enable operational and passenger efficiencies by evolving into a platform for modernisation of city buses.

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

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CESL will later expand support to more cities keeping in mind climate change related issues and the focus on energy independence.

Benefits of participating in the Grand Challenge include lower prices realised due to aggregate demand; high quality benchmarked technology; access to FAME-II incentives, state incentives and domestic and international sources of finances; and air quality improvement.

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

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The scheme spearheads the government’s Atmanirbhar Bharat initiative and the Azadi Ka Amrit Mahotsav and is being viewed as a ‘big step’ in a series of initiatives to fulfil commitments made towards making India a Net Zero nation by 2050, the release added.

CESL’s Grand Challenge Tender scheme:

• Aims to deploy 5,450 single decker and 130 double decker electric buses for State Transport Units (STUs) under the scheme for five cities
• Tender value is estimated to be Rs 5,500 crore
• STUs to pay for these buses, CESL is the procuring agency
• Eligible for incentives under FAME II
• States may wish to include top-up subsidies
• Cost reduction in operation of public transport system in cities
• Significant improvement in air quality

CESL is a subsidiary of EESL, a joint venture (JV) of public sector companies under the Power Ministry, focused on delivering clean, affordable and reliable energy solutions that lie at the confluence of renewable energy, electric mobility, and climate change.