There is no other option under phase II of a central government subsidy scheme

After cancelling tenders for the long-awaited electric buses, which were to be operated with central subsidy, as it wanted to own and not lease the fleet, the Bangalore Metropolitan Transport Corporation (BMTC) finds itself in a conundrum. If it wants to run e-buses under phase II of the Centre’s Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India), the corporation may have no option but to lease the buses.

The notification issued by the central government states that incentives will be provided to State-run transport corporations to operate e-buses under phase II based on an operational expenditure model. Put simply, this means that the BMTC may have no option but to lease buses.

This was the bone of contention which resulted in the plan to introduce e-buses in Bengaluru under phase 1 of the FAME India falling through. The Corporation initially wanted to operate buses on a lease basis using the subsidy. However, the decision became mired in controversy after Transport Minister D.C. Thammanna publicly opposed the move on the grounds that it would prove disastrous for the cash-strapped BMTC. At the time, it was decided to directly procure buses using the subsidy.

However, the delay in taking a decision on the matter resulted in the BMTC missing the central subsidy as it could not utilise the funds within the stipulated time.

The BMTC has not given up on plying e-buses. “We are planning to running 300 e-buses by availing the central subsidy. The board of the Corporation will take a decision at its next meeting,” said BMTC Managing Director N.V. Prasad.

The central government had announced an outlay of ₹10,000 crore for phase II of FAME. The scheme is proposed to be implemented over a period of three years starting April 1, 2019. The Centre is providing incentives for 7,090 e-buses across the country.

Principal Secretary of Transport Department B. Basavaraju said, “As per the phase-I scheme of FAME, there were options for either leasing or directly procuring electric buses. Phase-II talks of only leasing buses. Earlier, the State government had taken a decision to drop leasing of buses after the BMTC got a detailed study done by IISc. experts on the merits and de-merits of leasing. We had also written to the central government seeking extension of deadline to use the subsidy. Now, the BMTC will take a decision on availing subsidy under phase II..”

How BMTC missed the bus

In January 2018, the BMTC chose a Hyderabad-based company to operate 150 electric buses, which were to be introduced in a phased manner. The Corporation had agreed to pay ₹37.50 per kilometre to the operator, which did not include the cost of power consumption, conductors’ salaries and taxes.

After the Congress-JD(S) government came to power in the State, Transport Minister D.C Thammanna opposed the decision accusing officials involved of corruption. He argued that the decision would be a financial burden on the Corporation. After a long delay, in February 2019, BMTC decided to cancel tender. It decided to buy the buses instead, but by then it missed the deadline for the ₹75 crore subsidy from the Centre.