CESL's “GRAND CHALLENGE” contract update

Mumbai– Convergence Energy Services Ltd (CESL)¹ has announced the lowest bidders of the floted tender of “Grand Challenge” for the 5,450 electric buses (Tender details covered in TBB India February’2022 Edition). Tata Motors Ltd. of Mumbai had become the lowest bidder for the 5,450 electric buses contract, valued at USD 625mn.

The Grand Challenge tender comprises demand for 5450 buses across five major Indian cities –Kolkata, Delhi, Bangalore, Hyderabad and Surat.

Prices discovered are the lowest ever, price discovered for a 12-meter bus is $0.55/km (₹43.49/km), and a 9-m bus is $0.49/km (₹39.21/km).This includes the cost of electricity for charging of the buses.

With the lower discovered prices under the Grand Challenge, a savings of approximately USD 47.20mn (INR 361Crores) of national subsidy(FAME scheme) can be realized, which in turn may be utilized for additional buses.

CESL stated “The buses are expected to operate around 4.71 billion kilometers over twelve years saving 1.88 billion liters of fossil fuel. This will result in 3.31 million tonnes of CO2 from tailpipe emissions, a major step towards mitigating climate change.”

The contract term is 12 years, with assured kilometers of 10 lacs per bus, and a credible payment security system. Special emphasis was paid to the requirement for domestic content, specifications for which are the highest to date. Atleast 25,000 people will be employed through this tender, of which 10% will be women. This does not include new employment created through new manufacturing facilities.

Other bidders were Switch Mobility (the electric vehicle arm of Ashok Leyland), Evey Trans of the Olectra Group and VECV (a joint venture between Volvo Group and Eicher Motors).

In the context of the above, Delhi Transport Corporation (DTC) has released an order for the supply of 1,500 electric buses of the above mentioned 5,450 Nos, other STU’s will release the orders soon.

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