Urban agenda | The nuts and bolts of e-bus rollout in India's smaller cities
The PM-eBus Sewa scheme aims to deploy 10,000 electric buses in tier-II and tier-III cities by the end of the year. What's the catch
With half of India’s population projected to live in cities by 2050, policy experts have been advocating increased investment in public transport for sustainable urbanisation. Currently, only a handful of Indian cities have formal public transport systems making pollution and congestion synonymous with cities.
In a bid to fill this void, the Union government announced the PM-eBus Sewa scheme to provide 10,000 air-conditioned electric buses for tier-II and tier-III cities in a public-private partnership (PPP) model. The scheme was announced by finance minister Nirmala Sitharaman in her 2021-22 budget speech; it received a cabinet nod only in August 2023.
Despite the lag, the scheme has so far progressed swiftly, with the first of the buses poised to hit the roads before the end of 2024, according to officials. "If things go well, before the end of this year, we may see deployment in some cities," an official at the ministry of housing and urban affairs (MoHUA) said.
“While initially there was a lag of two years due to cabinet approval, we have worked at a remarkable pace since then. We have onboarded more than 50 cities after holding stakeholder consultations in each of these cities,” he added.
The scheme
As per the scheme guidelines, 10,000 e-buses will be deployed in the gross cost contract (GCC) or leased for specified services on a PPP model in cities that do not have existing organised public transport systems. In addition, the scheme will aid in associated infrastructure, bus depots, ticketing facilities, intelligent transport management systems (ITMS) and behind-the-meter power infrastructure.
The scheme is pegged at a total cost of ₹57,613 crore, out of which the Centre's funding component is ₹20,000 crore. The expenditure will also include upto 100% of upstream power infrastructure and 60% of civil infrastructure costs for bus depots.
The process
So far, tenders for a total of 5,262 buses of three sizes — standard (12 metres), midi (9 metres) and mini (7 metres) for a total of 70 cities spread across 16 states and Union territories have been floated in two packages as of date.
Maharashtra (1,503) followed by Madhya Pradesh (552), Rajasthan (500), Gujarat (425) Odisha and Bihar (400 each) have the highest number of buses allotted so far.
In addition to the sanction of buses, electrical infrastructure worth ₹120 crore at 14 depots in 13 cities have been approved. The ministry has also approved civil works worth ₹68 crore for building depot infrastructure.
A part of the first package of the tender has been awarded for more than 1,300 buses and the rest was retendered owing to pricing and technical issues, the MoHUA official said. The official added that once the general elections are over, the second set of tenders will be awarded, and states and cities will be pushed to execute the civil and electrical works.
An industry stakeholder, on condition of anonymity, said that Convergence Energy Services Limited (CESL), a public sector unit under the power ministry, which is conducting the tendering process on behalf of MoHUA, has not released the cost of operations of the buses yet. The goal is to figure out the best price for operating these buses.
CESL refused to comment on the tendering process.
The stakeholder also said that, so far, 15 states have also agreed to the payment security mechanism, which was a major hurdle for the implementation of the scheme. In absence of such a guarantee, electric bus suppliers have been apprehensive about timely payouts as most transport undertakings under the state governments are financially unhealthy.
Are 10,000 buses enough?
Aditya Rane, senior associate, transport system and electric mobility, at the Institute for Transportation and Development Policy (ITDP), said that 10,000 buses are not enough even though it might seem a large number. “In India for urban areas, the requirement of buses is close to 2.5 lakh, considering 50 buses are necessary for 100,000 people. But right now, we only have around 40,000 buses,” he said.
While the scheme may fall short in numbers and may be quite late in execution, Rane said that the scheme is a major improvement from previous bus procurement schemes of the Union government like the Jawaharlal Nehru National Urban Renewal Mission (JNURM) and the Faster Adoption and Manufacturing of Electric Vehicles (FAME) schemes. “The eBus Sewa scheme will help in the electrification of the public system and help in introduction of state-of-the-art system which can be comparable to metro rail systems,” Rane added.
He said unlike previous Central schemes, this scheme looks at not only funding the procurement of buses but is focused on installing a holistic system, which will make the scheme viable. He cited previous examples when smaller cities in Maharashtra could not sustain the operation of JNURM buses beyond two years.
"Currently, in most tier-II and tier-III cities, public transport needs are met informally by old, polluting vehicles," said Amit Bhatt, managing director at the International Council on Clean Transportation. “So, the scheme not only pushes for public transport but also for zero tailpipe emission public transport in cities where over the years there has been no investment in public transport. This scheme is helping cities to understand the technology in advance, make them better prepared for electrification,” he said.
Soumya Chatterjee is part of the HT Urban Affairs team, which brings to you each week a story about where we live and how it affects the way we live
With half of India’s population projected to live in cities by 2050, policy experts have been advocating increased investment in public transport for sustainable urbanisation. Currently, only a handful of Indian cities have formal public transport systems making pollution and congestion synonymous with cities.
In a bid to fill this void, the Union government announced the PM-eBus Sewa scheme to provide 10,000 air-conditioned electric buses for tier-II and tier-III cities in a public-private partnership (PPP) model. The scheme was announced by finance minister Nirmala Sitharaman in her 2021-22 budget speech; it received a cabinet nod only in August 2023.
Despite the lag, the scheme has so far progressed swiftly, with the first of the buses poised to hit the roads before the end of 2024, according to officials. "If things go well, before the end of this year, we may see deployment in some cities," an official at the ministry of housing and urban affairs (MoHUA) said.
“While initially there was a lag of two years due to cabinet approval, we have worked at a remarkable pace since then. We have onboarded more than 50 cities after holding stakeholder consultations in each of these cities,” he added.
The scheme
As per the scheme guidelines, 10,000 e-buses will be deployed in the gross cost contract (GCC) or leased for specified services on a PPP model in cities that do not have existing organised public transport systems. In addition, the scheme will aid in associated infrastructure, bus depots, ticketing facilities, intelligent transport management systems (ITMS) and behind-the-meter power infrastructure.
The scheme is pegged at a total cost of ₹57,613 crore, out of which the Centre's funding component is ₹20,000 crore. The expenditure will also include upto 100% of upstream power infrastructure and 60% of civil infrastructure costs for bus depots.
The process
So far, tenders for a total of 5,262 buses of three sizes — standard (12 metres), midi (9 metres) and mini (7 metres) for a total of 70 cities spread across 16 states and Union territories have been floated in two packages as of date.
Maharashtra (1,503) followed by Madhya Pradesh (552), Rajasthan (500), Gujarat (425) Odisha and Bihar (400 each) have the highest number of buses allotted so far.
In addition to the sanction of buses, electrical infrastructure worth ₹120 crore at 14 depots in 13 cities have been approved. The ministry has also approved civil works worth ₹68 crore for building depot infrastructure.
A part of the first package of the tender has been awarded for more than 1,300 buses and the rest was retendered owing to pricing and technical issues, the MoHUA official said. The official added that once the general elections are over, the second set of tenders will be awarded, and states and cities will be pushed to execute the civil and electrical works.
An industry stakeholder, on condition of anonymity, said that Convergence Energy Services Limited (CESL), a public sector unit under the power ministry, which is conducting the tendering process on behalf of MoHUA, has not released the cost of operations of the buses yet. The goal is to figure out the best price for operating these buses.
CESL refused to comment on the tendering process.
The stakeholder also said that, so far, 15 states have also agreed to the payment security mechanism, which was a major hurdle for the implementation of the scheme. In absence of such a guarantee, electric bus suppliers have been apprehensive about timely payouts as most transport undertakings under the state governments are financially unhealthy.
Are 10,000 buses enough?
Aditya Rane, senior associate, transport system and electric mobility, at the Institute for Transportation and Development Policy (ITDP), said that 10,000 buses are not enough even though it might seem a large number. “In India for urban areas, the requirement of buses is close to 2.5 lakh, considering 50 buses are necessary for 100,000 people. But right now, we only have around 40,000 buses,” he said.
While the scheme may fall short in numbers and may be quite late in execution, Rane said that the scheme is a major improvement from previous bus procurement schemes of the Union government like the Jawaharlal Nehru National Urban Renewal Mission (JNURM) and the Faster Adoption and Manufacturing of Electric Vehicles (FAME) schemes. “The eBus Sewa scheme will help in the electrification of the public system and help in introduction of state-of-the-art system which can be comparable to metro rail systems,” Rane added.
He said unlike previous Central schemes, this scheme looks at not only funding the procurement of buses but is focused on installing a holistic system, which will make the scheme viable. He cited previous examples when smaller cities in Maharashtra could not sustain the operation of JNURM buses beyond two years.
"Currently, in most tier-II and tier-III cities, public transport needs are met informally by old, polluting vehicles," said Amit Bhatt, managing director at the International Council on Clean Transportation. “So, the scheme not only pushes for public transport but also for zero tailpipe emission public transport in cities where over the years there has been no investment in public transport. This scheme is helping cities to understand the technology in advance, make them better prepared for electrification,” he said.
Soumya Chatterjee is part of the HT Urban Affairs team, which brings to you each week a story about where we live and how it affects the way we live
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