Q&A with Mahua Acahrya, MD & CEO, Convergence Energy Services Ltd (CESL)
Convergence Energy Services Ltd (CESL) is today planning to launch a mega Rs 5,450 crore tender for procuring electric buses for five cities. The EESL subsidiary has received demand for 5,450 buses from their State Transport Utilities (STUs) and is hopeful of participation from large OEMs and financial institutions in the bidding, Managing Director & Chief Executive Officer Mahua Acharya told ETEnergyworld in an exclusive interview.
Edited excerpts:
CESL is today going to release the Request for Proposals (RFPs) for the mega procurement of electric buses under a "Grand Challenge". What is this tender all about?
This is to implement the FAME-II subsidy for electric buses for nine cities. And our job is to aggregate demand across these nine cities. This may seem easy to do, but here the STUs are not buying buses, they are buying a service. So, our job was to homogenize the demand. We have been working with these nine cities since June 2021 and we have now arrived at a set of common criteria or bidding conditions among these nine cities. We have asked them how many buses they would like to procure based on these bidding criteria. We have received demand or 5,450 buses and the DHI subsidy is available for a minimum of 3,472 buses. We have states who are really keen to put electric buses on their roads but because these buses are expensive, there is still a gap in viability and to meet that we have states that are taking a step forward to put in their own subsidy, too.
So, the RFP to be released is a request for bidders to quote a price for these five participating cities, including Delhi, Bengaluru, Hyderabad, Kolkata, Surat. And we will be asking bidders, who are largely OEMs with their operators and financial institutions, to quote a rate for providing transportation services using electric buses.
So, in this model, how would the buses be procured?
The buses will be procured via the RFP that will be floated tomorrow. CESL is the programme manager for this exercise. We are the procurement and implementation agency; we conduct the procurement on behalf of the five participating STUs.
What is the tender valued at, assuming we are able to procure 5,450 buses? And what kind of companies are likely to submit bids?
The value of the tender is approximately Rs 5,450 crore. Standard bus manufacturing companies are expected to participate in this - companies like Tata, JBM, Ashok Leyland, Volvo Eicher, Olectra etc. We are also hopeful that financial institutions and/or investors participate in this tender.
What would happen in the next stage of this programme?
We open the RFP in 40 days, a price is discovered, we go back to the STUs and we seek their final approval on that price and the STUs then get into a contract with the bidder -- which is the OEM or the operator or the financial institution - and the first bus is to be delivered within 3 months of the signing of the contract.
Any thoughts on how you would plan to expand this programme to more cities in the next phase?
We have not conceived that so far. At present, we are just focusing on the subsidy that is available from DHI under FAME II.
You said you have managed to homogenize the demand across these cities? Can you explain?
We standardized the public transit criteria -- the technical specifications of the bus, the depot development and their standards, quality and efficiency standards, safety, minimum number of kilometers, assets used etc. The most important aspect is bankability of the contract. Some STUs have two months escrow, some have three months escrow. We have standardized that and also the budgetary provisions, alternative sources of revenue etc. It was tough to standardize this; this is because each city is different and unique when it comes to parameters like traffic density, road width, road conditions, commuter behavior etc. So, while it has been a challenging task, it has been rewarding too. The STUs have been really cooperative. Some of them have even dropped their special needs or criteria in the interest of a national agenda.
Do you think a lack of charging infrastructure can become a constraint?
It is not a constraint in the case of buses, because they charge in depots. When the shift is done, these buses go back to the depot in the evening and charge. They will also be able to charge enroute in the afternoons or whenever in the day. This will be provided by the STUs – and conditions have been standardized and specified in the Grand Challenge.
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