Press Release

Companies backed by China bid for DTC’s electric bus tender

China backed firms have bid for Delhi Transport Corporation’s (DTC) marquee order for 300 electric buses, which is to help fight one of the biggest health emergencies due to severe levels of air pollution, said three people aware of the development.

India’s Tata Motors is the third bidder for the contract for supplying and running buses for 11 years in the national capital.

While India’s PMI Electro Mobility Solutions Pvt Ltd has partnered with China’s Beiqi Foton Motor Co.; bus coach manufacturing company Azad Group has collaborated up with Xiamen Golden Dragon Bus Co. to bid for these contracts, to be awarded under India’s Faster Adoption and Manufacturing of Hybrid and Electric Vehicles, or FAME 2, scheme having a ₹10,000 crore subsidy outlay.

These bids for the selection of bus operator for supply, operation and maintenance of low-floor electric buses comes in the backdrop of Chinese border transgressions and India restricting bidders from countries with which it shares land border from participating in tenders for government procurement, without approval from competent authorities on the ground of defence and national security.

“PMI Electro is an originalequipment manufacturer having a technology tie-up with Beiqi Foton Motors. As a part of its endeavor to manufacture electric buses in India by following the phased manufacturing programme issued by the department of heavy industries, which mandates localization of key components, including the battery, motor, chassis, axle, suspension, etc.,” said Manvi Jain, head corporate affairs, PMI Electro, and director, Foton PMI Bus India Pvt. Ltd, in an emailed response.

“PMI is committed to manufacturing these components in India. As a part of its bid to DTC, it has already committed to delivering buses complying to the aboveguidelines and localization. Therefore the question of assembly of components received from Foton does not arise,” Jain added.

With mounting tensions along the India-China border, India has put curbs on import of tyres and other auto components from China and also barred Chinese apps, including Bluehole’s PUBG, Bytedance’s TikTok and Alibaba’s UC Browser, citing national security concerns.

A Tata Motors spokesperson, in an emailed response, said, “Tata Motors has been proactively supporting the Government of India’s electrification drive and its vision of bringing down the emission levels in the country, while focusing on sustainable mobility. As India’s biggest player in the electric bus industry, Tata Motors develops vehicles with technological advancements to redefine mass transportation in the country. Tata Motors continues to participate in all the tenders depending on the terms and conditions therein that complement the company’s product and services portfolio.”

The bids will be evaluated on the basis of the lowest per kilometre charge per bus, with the plan to eventually deploy 1,000 electric buses.

The tender comes in the backdrop of the Arvind Kejriwal-led Delhi government unveiling its electric vehicle policy in July that envisages electric bus fleet to form at least 50% of the total fleet with the city state.

Queries emailed to the spokesperson of DTC on Wednesday remained unanswered. Queries sent via email to spokespersons of Golden Dragon and Azad Group on Thursday morning also did not elicit any response.

The buses are to be run on an operation expense or OPEX model wherein the selected bus operator will have to build-own-operate and transfer (BOOT) this fleet after the completion of the contract under FAME 2 scheme. Under the FAME 2 scheme, the government plans to support around 7,000 e-buses, with a total outlay of around ₹3,500 crore.

“The average price of the busses will be around ₹1.43 crore each and technical bids have already been received by the DTC,” said the first person cited above requesting anonymity.

According to the tender documents reviewed by Mint, every bus will have to run 65,700km annually and 95% of this electric bus fleet must be available in the morning and 90% in the evening around the week. These buses should also be capable of running minimum 140km on single charge and minimum 120km with passengers. It will also be the operator’s responsibility to set up the charging infrastructure for the same. While the bus operator will have to initially bear the cost, the subsidy will be subsequently transferred.

The tender also assumes significance given Delhi’s weather conditions, with the temperature varying from 0°C to 50.0°C and dust storms during the summer months. Also, the national capital receives an average annual rainfall of 660mm, resulting in water logging as was recently witnessed. DTC has a current fleet of 3,781 buses across 34 depots and the plan is to increase the bus strength to 5,500 buses.

India is planning more tariff and non-tariff barriers to check Chinese imports. A case in point being India’s proposed power sector overhaul, wherein the government plans to put more tariff barriers, subsidized financing for encouraging domestic equipment usage, rigorous testing of foreign equipment and prior permission requirements for imports from adversary countries.

This hardening of stand comes in the backdrop of fresh tensions between India and China, even as the earlier issues that led to clashes along the Line of Actual Control (LAC) between India and China in Ladakh, which left 20 Indian soldiers dead, remains unresolved.

In October, the Union home ministry had raised concerns about potentially sensitive investments in critical sectors from “certain countries”, given the blurred ownership lines between state-owned and privately-held companies in China.

As part of Atma Nirbhar Bharat or self-reliant India strategy, the government has also made it compulsory to provide purchase preference to local suppliers for promoting the manufacturing and production of goods and services in India, with a view to enhancing income and employment. Along with leveraging its growing market to ready an economic retaliation against China, India also wants to play a larger role in global supply chains.

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