Bad deal? Govt may pull plug on e-bus tender

BMTC’s efforts to lease electric buses, described as a cost-effective solution, may not bear fruit as the government sees the offer made by the private company as a “raw deal” that needs to be either renegotiated or scrapped.

In December 2017, Bangalore Metropolitan Transport Corporation (BMTC) had called the tender for leasing 150 buses on ‘Gross Cost Model’. Hyderabad-based Goldstone (now Olectra Greentech) won the bid by offering to run buses at Rs 37.50 per km with an assured operation of 200 km.

Transport Minister D C Thammanna, however, said it was a raw deal where the corporation ends up losing more than it gains. “The draft agreement has anomalies that need to be fixed. On the face of it, the per kilometre cost looks good. But why should we pay so much when the (central) government is paying Rs 1 crore,” he asked.

However, walking back on the deal at this juncture will prove costly for BMTC, which has already received first tranche (Rs 14.95 crore) of nearly Rs 80 crore subsidy from the central government under Faster Adoption and Manufacturing of Electric vehicles scheme. “It will set back the efforts to induct electric buses by a year,” a source said.

Despite repeated attempts, DH could not reach BMTC managing director V Ponnuraj.

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Asked whether the tender will be scrapped, the minister said he will take a decision soon. “I have asked some questions about the cost. If the answers are not satisfactory, we will think of buying buses instead of leasing them,” he said.

The minister explained that the cost will go up exponentially if they add BMTC’s expenditure. “In addition to deploying a conductor and paying for electricity, we are also providing charging stations, space for workshop and depot,” he said.

As soaring diesel prices continue to push the BMTC deeper into a crisis, officials had previously described Goldstone’s offer as “the best deal” as the corporation pays less than the operational cost of a diesel bus at Rs 56 per km.

“The operational cost has now touched Rs 59 per kilometre. The corporation already has a cumulative loss of Rs 650 crore. The switch to electric was aimed at cutting down expenditure on fuel,” sources said.

The transport minister said he was “only being cautious” since signing the agreement will set a precedent for BMTC.