CESL discovers lowest ever prices for buses under the FAME II Scheme

NEWS: Convergence Energy Services Limited (CESL), a PSU under the Ministry of Power announced prices discovered for the biggest ever demand electric buses. The Grand Challenge tender comprises demand for 5450 buses across five major Indian cities – Kolkata, Delhi, Bangalore, Hyderabad, and Surat.

Utility: UPSC, JPSC, BPSC Prelims & Mains
Section: Economy: Infrastructure / Transportation / | Science & Tech: Electric Vehicles

Key Points

  • Prices discovered are the lowest ever and more importantly, at par with or very close to the operational cost of diesel buses.
  • The lowest price discovered for a 12-meter bus is Rs. 43.49/km, and a 9-m bus is Rs. 39.21/km.
  • This includes the cost of electricity for charging of the buses.
  • Prices realized set a benchmark for public transport, the price point for which may encourage even the smaller cities to adopt electric vehicles.
  • The buses are expected to operate around 4.71 billion kilometers over twelve years saving 1.88 billion liters of fossil fuel.
  • This will result in eliminating 3.31 million tonnes of CO2e from tailpipe emissions, a major step towards mitigating climate change.
  • Buses will benefit from the central Government subsidy offered under the remodeled FAME II scheme administered by the Ministry of Heavy Industries.

About FAME scheme

  • Faster Adoption and Manufacturing of Hybrid & Electric Vehicles in India is the Initiative of the Government to reduce the use of Diesel and Petrol Powered Vehicles in the country.
  • The project is an integral part of the Government’s National Electric Mobility Mission Plan (NEMMP).
  • The scheme is being implemented and overseen by the Ministry of Heavy Industries and Public Enterprises.
  • The scheme aims to encourage progressive induction of reliable, affordable, and efficient electric and hybrid vehicles (xEV).
  • The First Phase of the scheme was initially approved for a period of 2 years, commencing on 1st April 2015.

About FAME II scheme

  • Government has approved Phase-II of FAME Scheme with an outlay of Rs. 10,000 Crore for a period of 3 years commencing from 1st April 2019.
  • Out of total budgetary support, about 86 percent of the fund has been allocated for Demand Incentive so as to create demand for EVs in the country.
  • This phase aims to generate demand by way of supporting 7000 e-Buses, 5 lakh e-3 Wheelers, 55000 e-4 Wheeler Passenger Cars (including Strong Hybrid), and 10 lakh e-2 Wheelers.
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