CESL discovers lowest ever prices for 5,450 buses: Power Ministry

The benchmark price point for public transport may encourage even smaller cities to adopt electric vehicles

Convergence Energy Services Limited (CESL), a public sector undertaking (PSU) under the Ministry of Power, has announced the “lowest ever” prices discovered for ₹5,000, ‘The Grand Challenge’ tender comprising demand for 5,450 buses across five major Indian cities — Kolkata, Delhi, Bangalore, Hyderabad and Surat.

Prices discovered set a benchmark for public transport — the price point which may encourage even smaller cities to adopt electric vehicles — an official statement said.

“Prices discovered are the lowest ever and more importantly, at par with or very close to the operational cost of diesel buses. The lowest price discovered for a 12-meter bus is ₹43.49/km, and a 9-m bus is ₹39.21/km. This includes the cost of electricity for charging of the buses,” the Power Ministry said in a statement.

It said that the prices discovered represent electric mobility as a “service”, a relatively new and emerging business model that makes it affordable for State transport undertakings to adopt electric buses, adding that the tender homogenises the demand for electric buses, making this a step closer to the standardisation of modern public mobility.

“The value of the tender is over ₹5,000 crore. The buses are expected to operate around 4.71 billion kilometers over twelve years saving 1.88 billion litres of fossil fuel. This will result in 3.31 million tonnes of CO2e from tailpipe emissions, a major step towards mitigating climate change,” it added.

At least 25,000 people will be employed through this tender, of which 10% will be women. This does not include new employment created through new manufacturing facilities.

“The process of homogenization started in July 2021, following a Gazette of India notification dated 11th June 2021 issued by the Ministry of Heavy Industries. 9 cities are eligible to receive subsidy under the remodeled FAME II Scheme. Of these, 5 have participated in this tender. All major bus manufacturers participated in the tender,” the Ministry’s statement added.