CESL says Delhi Government paying higher price for e-buses

8 Jul 2022 , 12:42 PM

According to news reports, Convergence Energy Services Ltd (CESL), the business in charge of managing the purchase of electric vehicles under central programmes, discovered in a tender that Delhi’s transport department is buying electric buses at a price significantly higher than that in the .

In comparison to the lowest bid of Rs47.49 per km in a CESL tender published in January of this year for 5,450 buses, the Delhi government will pay over Rs61.15 per km for 330 vehicles, both including power rates.

The tariff for the Delhi tender rises to over 68 per kilometre after accounting for a greater bus subsidy. At this rate, compared to the price discovered in the CESL tender, the cost of operating these buses over a ten-year period would be Rs500 crore more.

Kailash Gahlot, the minister of transport for Delhi, claimed that the reason for the pricing discrepancy was the magnitude of the orders, with CESL’s order being far bigger than that of the Delhi Transport Corporation.

In reality, the central programme, Faster Adoption and Manufacturing of Hybrid & Electric Vehicles, was approved by the Delhi cabinet last week, and as a result, 1,500 electric AC buses will be purchased at a cost of Rs47.49 per kilometre (FAME). These buses, which are part of CESL’s larger tender, are the same size as those in the 330-bus order that was placed as part of a Delhi government programme.

The firms who provide and maintain the buses receive a subsidy as a result of the procurements. Under the 330-bus order, the Delhi government will pay Rs75 lakh for every bus. Delhi would pay Rs45 lakh per subsidy under the CESL tender, which also applies to the 1,500-bus contract. Based on CESL’s formula of Rs0.25 per km for every Rs1 lakh of additional subsidies, the effect of the greater subsidy will be around Rs7.50 per km.

The Delhi government may severely damage the exchequer if the order is granted at these increased charges. This will reportedly cost the government an additional Rs500 crore over the course of ten years, the news reports claimed.