Will Bengaluru miss out on central govt subsidy to acquire electric buses once again?

While the deadline was already extended by more than two months, BMTC is unhappy with the price quoted by the lowest bidder.
Will Bengaluru miss out on central govt subsidy to acquire electric buses once again?
Will Bengaluru miss out on central govt subsidy to acquire electric buses once again?

For the second time, Karnataka is likely to miss the deadline for availing central government subsidy to induct electric public buses under ‘Faster Adoption and Manufacturing of (Hybrid and) Electric vehicles (FAME)’ scheme. And this time, it’s likely to happen because the state government is unhappy with the prices quoted by bidders who are willing to provide electric buses on lease. 

Karnataka was one of the first states to start a pilot programme of electric public buses way back in 2014. But since then, despite many promises by the state government, there has been no progress on the ground.

The FAME scheme is part of the National Electric Mobility Mission Plan under the Ministry of Heavy Industries & Public Enterprises to promote the reduction of greenhouse gases and dependence on fossil fuel. 

First, it was the HD Kumaraswamy government which had delayed on availing the FAME-1 scheme where the state lost Rs 75 crore of central government subsidy as the deadline of March 31, 2019, could not be met. This delay was caused due to lack of decisiveness and conflict between the bureaucracy and the political class. While the then BMTC MD had initially mooted the idea of leasing electric buses, owing to the low financial burden, then Transport Minister DC Thamanna pushed for purchasing the buses, which led to a conflict within the organisation in November 2018. 

FAME-2 had a deadline of November 15, 2019, which was extended to February 15, 2020 citing the model code of conduct which was in place in the state due to bye-elections in December 2019. The subsidy would cover Rs 1 crore for every AC bus, and Rs 75 lakh for every non-AC bus.

However, as the new deadline approaches, the government might miss the subsidy this time as well, since the state has not been able to get bidders for the cost that they’re looking to pay for these buses. 

In October 2019, TNM had reported that the state transport department had floated a tender to induct 300 electric buses for Bengaluru, 50 for KSRTC long journeys, and another 50 for Hubli-Dharwad on a lease model. Officials in the know said that they were looking for a cost of around Rs 40 per kilometre for a single bus.

But now, sources say the bidders have quoted a 30-40% higher price per kilometre. An official who wishes to remain anonymous says that if the bidders do not agree for a price closer to Rs 40/km then the BMTC and KSRTC will have no option but to go for retendering. In this process, the subsidy scheme is also likely to be missed.

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