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Cash-starved transport utilities, rigid rules hit bidding for e-buses

In some states, the transport utilities have allegedly paid salaries to their staffers out of the subsidy given by the Centre for electric buses. The Delhi transport utility has asked for a bank guarantee of Rs 20 lakh for each electric bus for 10 years as against Rs 2-3 lakh claimed by other states.

, ET Bureau|
Nov 26, 2019, 06.24 AM IST
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The government official said the tenders for electric bus procurement by Delhi is also likely to get high quotes as it demands high bank guarantees.
NEW DELHI: The government’s electric mobility drive seems to be on a bumpy ride with the state transport department coffers running dry and rigid tender rules choking the bidding process.

In some states, the transport utilities have allegedly paid salaries to their staffers out of the subsidy given by the Centre for electric buses. The Delhi transport utility has asked for a bank guarantee of Rs 20 lakh for each electric bus for 10 years as against Rs 2-3 lakh claimed by other states. This is leading to low participation from original equipment manufacturers or high bids in many tenders floated under the Phase-II of Faster Adoption and Manufacturing of Electric (& Hybrid) Vehicles (Fame) scheme.

Armed with a Rs 10,000-crore budget, Fame-II is designed to push the government’s e-vehicle drive. Public transportation fleets, registered commercial buses, four-wheelers, three-wheelers and privately owned two-wheelers are eligible for subsidy under the scheme.

States need to finalise tenders within three months to ensure delivery of e-buses in 12 months to avail the subsidy. A senior government official said the state transport utilities that have poor payment credibility have received very high bids. Some transport companies had also misused the subsidy received under Fame-I by not passing it to the successful bidders. “The status will be clear when they will submit the certificate of utilisation of the funds, but such instances lead to lower participation or exorbitant bids by companies that factor the risks in the bid cost,” he said.

The government official said the tenders for electric bus procurement by Delhi is also likely to get high quotes as it demands high bank guarantees. Clauses like no inflationlinked escalation in some tenders raised bids while some transport departments also sought luxury bus-like added features that are not used in city buses.

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