(MENAFN- Live Mint)

New Delhi: The government has deferred the deadline to submit tenders under the electric bus incentive scheme for the third time as companies sought an extension, citing the festive season, according to an official in the know.

The electric bus (e-bus) makers now have until 14 November against the earlier deadline of 6 November to submit their bids to supply e-buses for Bengaluru, Hyderabad, Surat, Ahmedabad, and New Delhi, according to a public document released on 4 November and confirmed by officials.

The ₹10,900-crore PM E-Drive scheme targets to deploy 14,028 e-buses in nine cities, with the government offering 40% upfront to state utilities to acquire buses from e-bus makers, who will be paid on a per-kilometre basis. The bidding for this massive tender was set to close in August, and was pushed to 14 October. It was then shifted to 6 November.

Mint reported on 22 October that the tender was delayed a second time due to bus manufacturers finding the contract too expensive and stringent, as well as inadequate infrastructure for e-buses in the states. Tata Motors, JBM Auto, PMI Electro Mobility Solutions, EKA Mobility, Olectra Greentech, and Switch Mobility were interested in supplying the buses, Mint reported.

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Companies have to pay an earnest money deposit of over ₹312 crore to participate in the bidding for all five cities, according to publicly available tender documents. But they can also choose to pay for select“lots" of buses to be delivered in specific cities, lowering the earnest money deposit.

In response to Mint's query, CESL said, "The last date for bid submission has been extended to 14 November following requests from several prospective bidders seeking additional time to complete their submissions. The extension is intended to encourage broader participation and ensure a more competitive bidding process. Additionally, the decision takes into account the intervening holiday(s) during the current period."

CESL said it's“one of the largest tenders" of its kind, involving extensive technical, financial, and operational preparations.“The prospective bidders are required to arrange finances, form consortiums or tie-ups, and complete other essential compliances," it said.“In light of this, it is important to provide adequate time to ensure comprehensive participation and fair competition. The extension of the bidding timeline has therefore been made in the overall interest of the process and to encourage wider industry involvement."

No request received

The agency stated that it has not received any request for extension from state governments.

“The government has received some representations from bidders for extension due to the recent festive season," said the first official quoted earlier on the condition of anonymity as tender information is confidential.

CESL wrote to stakeholders on 30 October that state transport authorities would have to provide the necessary upstream charging infrastructure for the rollout of these buses in depots. This includes power grid networks and transformers to bring electricity to the charging point from power distribution companies.

States have now written to the agency, seeking an amendment to the contract terms for the installation of upstream charging infrastructure in bus depots as they are facing challenges in installing charging infrastructure, according to another official aware of the development, who spoke on the condition of anonymity.

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The ministry of heavy industries, which runs the PM E-Drive scheme, and e-bus makers Tata Motors, JBM Auto, PMI Electro Mobility Solutions, EKA Mobility, Olectra Greentech, and Switch Mobility did not immediately answer the queries emailed on 5 November.

"Public transport is the backbone of any sustainable city - and in today's world, it must be zero-emission," said Amit Bhatt, India director of the International Council for Clean Transportation, speaking about the need for more electric buses to reduce air pollution.“The electrification of public transport requires thoughtful and comprehensive planning. It's essential to have a clear roadmap for having land for bus depots and the development of supporting infrastructure to accommodate electric buses."

Asset-heavy model for bus makers

The PM E-Drive scheme for e-buses aims to reduce the cost of procuring and operating zero-emission public transportation to cut vehicular emissions and reduce the country's dependence on fuel imports.

For electric scooters, bikes, rickshaws and other three-wheelers, the government will pay the incentives directly to manufacturers for selling vehicles at a discount. However, for e-buses, the government will pay state transport authorities, which will pay bus makers for every kilometre of operation, instead of a full upfront payment to buy the buses. This model aims to ease the strain on state transport agencies, which have failed to pay manufacturers in the past.
An electric bus costs about ₹1-1.25 crore, and the central government plans to cover 20-35% of the cost of each bus under the PM E-Drive scheme.
Bus makers are reluctant to enter into these contracts as the ownership of the bus remains with them, making it an asset-heavy model.
A spokesperson for Tata Motors Ltd had earlier told Mint that the company plans to re-enter select tenders through a consortium model, even as full clarity on asset-light mechanisms is awaited. Mint reported earlier on 15 October, citing people privy to the matter that Tata Motors has skipped tenders where the company has to own the e-bus.

Also Read | Govt plans 3,000 electric buses for Mumbai, Pune under PM E-Dr

Mint also reported on 22 October, citing people aware of the matter, that the tender conditions were too stringent and included limitations on exits of investors in the busmakers and operators, preventing changes in ownership.
Tata Motors, Olectra, JBM, PMI, and Switch Mobility held about 88% of the electric bus market share in FY24, a CareEdge Ratings report said.“These companies had an order book of approximately 20,000 electric buses as of September 30, 2024, set to be delivered within the next 1-2 years."
The March 2025 report estimated that, led by incentives, e-bus sales are expected to cross 17,000 units by FY27.

Moreover, large order books are causing supply delays. In May this year, the Maharashtra government cancelled a ₹10,000 crore contract with Olectra Greentech for 5,150 buses after the company failed to supply the buses on time. The contract was reinstated after the state government and the company agreed on a staggered supply plan.

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