Karnataka to Centre: Enhance subsidy for E-buses under FAME II

The Karnataka government has written to the Centre to cut back on the number of electric buses allowed under FAME-II (Faster Adoption and Manufacture of (Hybrid and) Electric Vehicles) scheme but retain the higher subsidy of ₹1 crore a bus provided under the FAME-I.

The State government wanted this change based on its experience of FAME I bidding when the contract could not be processed due to resistance to the Gross Cost Contract mode of procurement.

In a letter to Prakash Javadekar, the Union Minister for Heavy Industries, Karnataka Deputy Chief Minister and Transport Minister Laxman Savadi said, BMTC has been selected by Department of Heavy Industries to receive the capital expenditure subsidy to procure 300 electric buses through a GCC mechanism under the FAME II scheme.

But in FAME I bidding process, BMTC had received a quote of ₹37 per km for the 80 buses tendered out. The subsidy per bus was ₹1 crore. However, the contract couldn’t be processed at that time due to resistance to the GCC, as conveyed to DHI. “Learning from that experience, it is suggested that DHI increases the per-bus subsidy to ₹1 crore, even under FAME II, to ensure that the GCC price quotes come down as close to the diesel non-AC bus costs as possible,” explained Savadi.

“In view of the above, it is requested to curtail the sanctioned 300 Electric buses under FAME-II scheme and increase the subsidy amount to ₹ 1 crore as in FAME-I scheme,” he added.

BMTC had issued Request for Proposal (RfP) for the e-buses in accordance with the Model Concessionaire Agreement (MCA) issued by NITI Aayog and recommended by the DHI. Due to an unexpectedly high quote for the bid, the RFP was re-issued by making the project more attractive to bidders by extending contract tenure and increasing assured-km of payment to the operators.

However, in the interim the coronavirus pandemic broke out and BMTC’s operations were halted. Before lockdown BMTC was operating 6,500 diesel buses but afterlockdown 2,400 diesel buses were operating.

Source: https://www.thehindubusinessline.com/news/national/karnataka-to-centre-enhance-subsidy-for-e-buses-under-fame-ii/article32206182.ece