Switch Mobility becomes L1 bidder for 3 of 8 mega electric bus tenders

Makes bids for 2,500 e-buses, PMI second with 2,080 electric buses

Switch Mobility, an Ashok Leyland group company, has been adjudged the highest bidder (L1) in three of the eight lots of orders for electric buses, floated by state-owned Convergence Energy Services Ltd (CESL).

This is the largest order ever for electric buses -- of 6,450 vehicles -- for state transport undertakings across the country.

It won top spot for 1,900 buses for Delhi, ordered by the Delhi Transport Corporation; 500 for Telangana; and 200 for Kerala.

The L1 bidder was determined by the company that offered the lowest per kilometre price.

PMI Electro Mobility Solutions, which has concentrated only on Delhi, is the highest bidder for 2,080 buses -- the largest single order. This included DTC as well as the department of transport in one lot. It is, however, L2 in the second Delhi lot of 1,900 buses, behind Switch.

Collectively the Delhi order accounts for nearly half the total.

As part of the bidding rules, in order to ensure that the original equipment manufacturer (OEM) orders and their consortiums are able to deliver the buses on time, the order in Delhi has been divided among two players provided the L2 player matches the price of L1. If they do, the order will be divided in the ratio of 60 per cent to the highest bidder and 40 per cent to the L2 bidder.
If the L2 bidder does not take the offer, a chance is given to the L3 bidder and it also has to match the price. In all the others the second-highest bidder only is given a chance to match the winner’s price. If that happens, the order is again divided in the same ratio.

The other players that have made it in the bid include Gurugram-based JBM, which was the highest bidder in three lots with the number of electric buses being around 1,781 buses. This includes Telangana for inter-city usage.

The fourth player in the game is Pinnacle, which is the highest bidder for Arunachal Pradesh.

The tender was based on the requirements of various states, which were aggregated by CESL. They include Delhi, Telangana, Haryana, Arunachal Pradesh, and the city of Surat in Gujarat.

The requirement ranges from 7-metre to 12-metre buses, air-conditioned and non-air-conditioned.

Under the “gross cost contract”, the bus is owned and maintained by the service provider (an OEM or a consortium of OEMs and the bus providers) for a specific rate or per kilometre fees discovered through competitive bidding to the service provider.

After 12 years, in accordance with the bid conditions, the bus asset is given to the state transport undertaking for Rs 1.

For CESL this is its second order for electric buses through an aggregation of state transport authority requirements. Last year it floated an order for 5,450 electric buses under the remodelled FAME 2 scheme. This was won by Tata Motors across categories.
Yet for the tender was for 6,450 buses. The Tatas, one of the most aggressive players in the segment, have kept away this time. So has Olectra, which has a technology partner­ship with Chinese giant BYD.
 
The size of the contract can be gauged from the fact that there are only 2,000 electric buses on the road and each bus costs Rs 1.2 crore. To meet the requirements of this large order, the companies will have to raise over Rs 7,500 crore to manufacture and assemble them.