Broke BMTC lose 80 cr aid for electric buses

The cash-strapped BMTC has lost at least Rs 80 crore aid from the Centre, thanks to the delay in procurement of electric buses after a change in the state government led to the scrapping of a tender to lease the vehicles.

Under the Faster Adoption and Manufacture of Hybrid and Electric vehicles (FAME) scheme, the Union government had announced grants for state road transport corporations (SRTCs) providing city bus services.

The Union Ministry of Heavy Industries and Public Enterprises on Monday rejected the state government’s demand for an extension of the deadline for the utilisation of central aid to purchase buses for the Bangalore Metropolitan Transport Corporation (BMTC).

“The first phase of FAME is coming to an end on March 31, 2019, and as such, there is no possibility to consider the said request of the BMTC,” the ministry’s letter to the state government said.

The Centre had assured the BMTC of funding 60% of the cost or Rs 1 crore for each of the 150 buses following which tenders were called to lease 80 buses during the previous Congress government. For a corporation burdened with Rs 650 crore cumulative loss, the central aid was a booster in its attempt to reduce emissions.

The current coalition government, which took over the reins days before the lowest bidder was to be awarded the contract, questioned the gross cost contract (lease) model in August 2018. This was followed by six months of inaction.

Last month, the BMTC board decided to scrap the tender to lease the e-buses and float a new tender to buy them, as per the stance of the transport minister, D C Thammanna. The decision was taken despite a letter from the Centre cautioning the scheme will expire in March and funds should be utilised by February 28.

However, the BMTC has now run out of time and cannot utilise the funds for the new tenders. The letter from the Centre, a copy of which has been marked to the BMTC, requests the corporation to refund Rs 18.69 crore it received from the Centre as the first tranche of the aid “along with interest”.

DH could not reach transport minister Thammanna for comment. When asked about the Centre’s letter, BMTC managing director N V Prasad said he will place it in front of the board of directors following which a decision would be taken.

“The board will have to decide on it considering all the matters at hand, including the code of conduct that has come into force,” he said.