The Cabinet on Wednesday approved a bus scheme called “PM-e-Bus-Sewa” under which 10,000 e-buses will be rolled out on public-private partnership model, according to a government press release.

This scheme was announced by the Finance Minister, Nirmala Sitharaman, in her 2021-22 budget speech, on February 1, 2021.

She said, “We will work towards raising the share of public transport in urban areas through expansion of metro rail network and augmentation of city bus service. A new scheme will be launched at a cost of ₹18,000 crores to support augmentation of public bus transport services. The scheme will facilitate deployment of innovative PPP models to enable private sector players to finance, acquire, operate and maintain over 20,000 buses.” 

The release said the scheme “would have an estimated cost of ₹57,613 crore for 10,000 buses”. The central government would chip in with a “support” of ₹20,000 crore, spread over 10 years.

Not many details are available now, but sources say that this scheme is different than the one that is rolled out by the government-owned company, Convergence Energy Services Ltd (CESL), the e-mobility subsidiary of Energy Efficiency Services Ltd (EESL).

Under the model announced today, the government will pay the bus operator a fixed sum per km of operation. When the scheme was mooted two years back, a government subsidy of ₹21 per km of run, for 12 years, was envisaged.

EESL’s Chief Executive Officer, Vishal Kapoor, told businessline today that CESL would like to be involved in the PM-e-Bus-Sewa program, for demand aggregation, but said he did not know for sure if the company would have a play in it.

CESL has so far rolled out three tenders, of which the first two resulted in an award of mandate for e-bus manufacture and deployment. The third was cancelled. The CESL program would be implemented on a different model, for which a payment security mechanism is being worked out.

Businessline reported on June 18 that a $150 million payment security fund would be set up, in collaboration with the US. The Biden-Modi joint statement issued by the White House at the end of Prime Minister Modi’s US visit in June mentioned the plan “to create a payment security mechanism that will facilitate the deployment of 10,000 made-in-India electric buses in India.” 

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