As of January 2024, there was a robust order e book of greater than 20,000 e-buses, that are to be delivered within the subsequent 24 months. Greater than 6,500 e-buses are plying on Indian roads with 2,739 e-buses registered within the present monetary 12 months until January 24, 2024, says India Scores and Analysis.
The State transport undertakings (STUs) have to date led the e-bus adoption, primarily pushed by its deployment beneath the gross price contract (GCC), which helps overcome the upfront price drawback and demand creation by way of FAME subsidies. On this GCC mannequin, STUs are finish clients, that are procuring the service somewhat than incurring capex.
Nonetheless, there was a poor response from OEMs for the third e-bus tender after some enthusiastic participation within the first two tenders. The rationale was OEMs had doubts over the cost capability of the STUs, as a majority of them are beneath monetary stress.
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Demand for PSM
Therefore there was a requirement for the institution of a cost safety mechanism (PSM), which is described as a funded capital reserve that can give interest-free working capital within the case of a default occasion.
So PSM is seen as essential for bettering the danger profile of undertaking builders to satisfy the upgradation and enlargement wants of STUs at aggressive costs, given the STUs are loss-making on an combination degree.
“Implementation of a PSM that might assist handle counterparty danger and enhance the bankability of initiatives that would offer the much-needed steadiness sheet flexibility to the OEMs/operators and an additional enchancment in value contracted beneath GCC. New builders and buyers are more likely to be focused on e-bus concessions, thus additionally bettering alternatives for fairness launch for builders,” says Divya Charen C, Affiliate Director – Infrastructure, India Scores.
The upcoming bids of the federal government for e-bus concessions to learn from all or a mix of PSMs reminiscent of cost safety fund, direct debt mechanism from State authorities’s account, and State assure for funds, topic to the consent of States.
NEBP scheme
The Centre has introduced the Nationwide Electrical Bus Programme (NEBP) in 2022 and PM-eBus Sewa schemes in 2023 with a goal of deploying 50,000 and 10,000 e-buses, respectively, by 2030. Moreover, the aggressive value found in NEBP 1 bids for six,465 buses in January 2023 within the absence of any subsidy augurs the period of STUs preferring e-buses over diesel buses.
Tata Motors’ Government Director Girish Wagh just lately indicated that the corporate was working with the federal government and made good progress on the PSM. “This PSM is kind of agreed upon. I feel there are some things which can be remaining which must be sorted out which can be sure that our steadiness sheet stays lighter and which can assist us to get into this enterprise very, very aggressively, he added.
The corporate operates over 2,000 e-buses, of which it bagged orders for 1,000 buses as a part of the CESL (Convergence Vitality Companies Ltd (CESL) tender 1.
Dheeraj Hinduja, Government Chairman of Ashok Leyland, additionally stated in a latest interplay that although the corporate was awaiting extra particulars on PSM, there have been enhancements on charges just lately.
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