Waiting to be proved wrong !

In my earlier blog :

(  EESL:  Lease Cars /  Do not Buy  / 

https://myblogepage.blogspot.in/2017/08/eesl-  lease-cars-do-not-buy.html  )  ,

I had assumed following figures :

·         ALL government departmental cars are driver driven

·         Run ( max ) of 100 km per day ( 20,000 km in 200 working days )

·         At 12,000 km / year , total cost ( fixed + variable ) per km works out to Rs 22 , for a self driven petrol car ( no salary of a chauffer ) -  CRISIL Research Study

·         It would be safe to assume that this would be Rs 25 / km for an Electric car

·         As against this , cost of hailing a UBER / OLA works out to Rs 19 / km  !

Now consider these assumptions in light of the following :

·         Two days back , EESL placed a order for purchase of 10,000 electric cars , at Rs 11.2 lakh each ( Total Value = Rs 1,120 crore )

·         EESL will lease out these cars to Government Departments / Agencies , at a lease rent of Rs 45,000 per month ( Rs 540,000 per year ) – which , I assume , does not include a driver ( Hindustan Times / 30 Sept )

·         So , that works out to Rs 27 per km ,( for 20,000 km / year ) , for the leasing department , without the salary of the driver

·         If the salary of that “ departmental driver “ is ( say ) Rs 300,000 per year ( Rs 25,000 per month , inclusive of all perks / retirement benefits / leave etc ) , then that would add another Rs 15 / km for annual 200,00  km

·         So , the total cost to the government department leasing the car from EESL , adds up to Rs 42 / km ( Rs 27 + Rs 15 )

QUESTIONS :

If my assumptions are correct ( I look forward to EESL proving me wrong ! ), then following questions arise :

#   Why should government departments incur a cost / km of Rs 42 , when it could

     hire a UBER / OLA , for Rs 19 / km ?  An extra of Rs 23 / km !

#   Eventually , when EESL manages to replace existing 500,000 government owned

    ( petrol / diesel ) cars with Electric Cars , this extra cost could add up to Rs

     2,300 Crore/year (5 Lakh cars * 20,000 km per year * Rs 23 / km difference )

      

     Is this justified by saying : Since EESL is a government-owned company , this is

     only transferring the money from one pocket to another :  ?

#   As per report in Hindustan Times ( 30 Sept ) , Government departments are

     currently paying Rs 50,000 per month for leasing cars from private agencies

    ( about 150,000 cars , out of a total of 500,000 cars )

    Is it not entirely possible – and nearly certain – that , if EESL tender was for “

    Leasing  instead of Buying “ , TATA and M&M , would have quoted Rs 15 per

    km ( inclusive of a driver ) , thereby saving the government , Rs 2,700 crore per

    year   ( 5 lakh cars * 20,000  km/year * Rs 27 / km : :  Rs 42 – Rs 15 )  ?

#   Cost of Lithium-ion Battery constitutes between 50 % - 70 % of the Selling Price

    of an Electric car . And this cost is dipping by approx. 20 % per year

    So , the cost of that battery ( to TATA ) must be around Rs 6 lakh today , out of

   its quoted price of Rs 11.2 lakh per car

   Now , if  5,000 cars are likely to be delivered in 2018 and remaining 5,000 in 2019

   then the battery costs would drop to below Rs  5 lakh by 2019

   Did the EESL incorporate a “ PRICE   DE-ESCALATION  CLAUSE “ , in its tender ?

I hope Arnab Goswami ( or anchor of any other TV Channel ) gets to read this and then say :

NATION  WANTS  TO  KNOW  !

01    Oct  2017

  www.hemenparekh.in / blogs