Thank You CESL : for that OPEX model

 

Context :

CESL launches tender for over 5K electric buses    /   TOI   /  21 Jan 2022

Extract :

Through this Grand Challenge, CESL aims to deploy 5450 single decker buses and 130 double decker buses

 

Mahua Acharya, MD & CEO, CESL said,

 

“ The real meaning of aggregation across cities under an OPEX MODEL, is actually homogenization .

 

This is the biggest ever scheme in the World – and is based on an INNOVATIVE , ASSET-LIGHT model that makes it possible for STUs, to deploy AFFORDABLY and at scale.

 

The GRAND CHALLENGE will certainly encourage the faster transition to green mobility across the country , while creating a synergy between private operators and State Governments “

Amitabh Kant, CEO NITI Aayog said,

 

“ Standardizing tendering conditions in diverse cities is a big step towards the transformation of public transport in India.

 

Participation in the Grand Challenge is a commendable effort from STUs , who I am sure will stand to gain economies of scale through the aggregation of demand by CESL “

 

 

MY  TAKE  :

 

   

For over 4 YEARS, I have been advocating that EESL ( at that time CESL subsidiary was not even launched ) take EVs on WET LEASE , rather than OUTRIGHT PURCHASE

Following are my 20 e-mails in this regard :

2017 ( 2 )

EESL : Lease cars , do not Buy !                        [ 18  Aug  2017  ]

 

To Buy or not to Buy?                                        [ 11  Oct  2017   ]

 

2018  ( 13  )

Logical to Lease                                                                  [ 06 Mar 2018 ]

Scam ? #EESL #NDA #BJP #MNRE                                       [ 08 Mar 2018  ]

Buy or Lease ?                                                                    [ 03 April 2018 ]

Do  they  have  an  option ?                                                 [ 14 April 2018 ]

Evidence  is  piling  up  !                                                      [ 13 May 2018 ]

EESL :  a  wake  up  time  ?                                                 [ 27 June 2018 ]

EESL : Grab this chance !                                                     [ 01 Aug 2018 ]

EESL : Put it off indefinitely !                                                [ 19 Aug 2018 ]

EESL : Getting Away from Straitjacket ?                                [ 26 Aug 2018 ]

If China can , so can We                                                      [ 27 Aug 2018 ]

Cars on Subscription ? Convenience Redefined                       [ 10 Sept 2018 ]

EESL : It is your move now !                                                [ 12  Oct  2018 ]

Thank You , Shri Jaitleyji,                                                    [ 25 Dec 2018 ]

2019  ( 2 )

E- Bus : without ETA [ Expected Time of Arrival ] ?              [ 04  Apr  2019 ]

    Congratulations, Shri Saurabh Kumarji ……………………………………[ 13 Nov 2019 ]

 

2021 ( 3 )

     CESL : Carpe Diem ( Seize this Opportunity ) ………………………[ 18 June 2021 ]

     A Vindication ?  ……………………………………………………………………….[ 04 Sept 2021 ]

     Thank You, Smt Mahua Acharyaji,  …………………………………………[19 Oct 2021 ]

 ==================================================

Once again,

Thank You, Smt Acharyaji ( mdcesl@eesl.co.in  ),

 

I urge you to follow the same WET LEASE tender system, when CESL floats the

GREAT CHALLENGE for replacing government fleet of 500,000 Petrol / Diesel

 vehicles with Electric Vehicles

WET LEASING model ( as per “ cost per Km” calculations shown in my earlier e-

mails ), has following advantages :

#   Enormous saving in UP-FRONT investment ( Capital Cost ) running into

     thousands of crore of rupees

#   Huge saving in OPERATING / MAINTENANCE / MANPOWER costs ( borne by

     the lessors )

#   Much higher daily UTILIZATION ( since lessors earns lease-rent on “ per

     km “ basis , he will ensure that buses keep running )

#   Very little DOWNTIME due to battery dis-charge ( lessors will set up no of

      battery charging stations )

With regards,

Hemen Parekh / hcp@RecruitGuru.com / 21 Jan 2022  

==============================================

Added on  05  May  2022 :

CESL discovers lowest ever prices for 5450 Electric buses under FAME II Scheme

   

 Extract :

Convergence Energy Services Limited (CESL), a PSU under the Ministry of Power today announced prices discovered for the biggest ever demand for electric buses.

The Grand Challenge tender comprises demand for 5450 buses across five major Indian cities – Kolkata, Delhi, Bangalore, Hyderabad, and Surat. 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 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.

Prices discovered represent electric mobility as a “service”, a relatively new and emerging business model that makes it affordable for state transport undertakings to adopt electric buses. In an industry first, the Grand Challenge tender homogenizes demand for electric buses – making this a step closer to standardization of modern public mobility.

The value of the tender is over Rs. 5000 Crores. 

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 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. With the very low discovered prices under the Grand Challenge, a savings of approximately Rs. 361 Crores of national subsidy can be realized, which in turn may be utilized for additional buses.

The Grand Challenge constitutes best-in-class tender conditions, including standard specifications for buses, depots, and charging stations. 

The contract term is 12 years, with assured kilometers of 10 lacs per bus, and a credible payment security system. Special emphasis was paid to the requirement for domestic content, specifications for which are the highest to date. 

At least 25,000 people will be employed through this tender, of which 10% will be women. This does not include new employment created through new manufacturing facilities.

The process of homogenization started in July 2021, following a Gazette of India notification dated 11th June 2021issued by the Ministry of Heavy Industries. 9 cities are eligible to receive subsidies under the remodeled FAME II Scheme. Of these, 5 have participated in this tender. All major bus manufacturers participated in the tender.

Announcing the discovered prices, Mahua Acharya, MD & CEO, CESL said that the rates we have witnessed today make electric buses extremely competitive across the country. 

These rates are based on the terms and conditions of the tender and the sheer number of buses that cities have requested.  The Grand Challenge will certainly encourage a faster transition to green mobility across the country while creating a synergy between private operators and state governments, she added.

================================================

Added on 31 May 2022 :

How demand aggregation halved the cost of running buses

Extract :

The recently-concluded tender for 5,450 e-buses — the country’s largest to date — has thrown up a pleasant surprise. The cost of running a bus service has been brought down to less than ₹45 per km for an e-bus from ₹75–90 for a regular, diesel-powered bus. 

Tata Motors has won 5,000 buses, Olectra (part of the Megha Engineering group) 300 buses, and VolvoEicher 150.  

=================================================================

Added  on  02  June  2022 :

CESL plans mega tender of 50,000 e-buses over 5 years /  ET  / 02 June 2022

Extract :

Company’s managing director, Mahua Acharya, said after such mega tenders are set to lower costs, she expects state transit utilities to eventually put an end to polluting diesel buses.

The tenders would not be backed by subsidy from the Central government and are likely to be issued in phases, the first one likely to be kick-started this month end, she said.

CESL recently completed a 5,450 e-bus tender that discovered 40% lower prices compared with diesel buses.

The discovered prices are based on a gross cost contracting model payable on rupees per km basis for 12 years. 

The tender process was started in July 2021 under which nine cities are eligible to receive subsidy under the remodelled FAME II Scheme. Of these, five participated in this tender with standardised terms and conditions.

“The tender showed that demand aggregation is doable and results in better prices. Cities are better off putting their demand into a larger bucket than tendering alone ..

=======================================================================

Added on 16 June 2022 :

CESL looks to supply Electric 3 Wheelers, later this month  /  BL  / 07 June 2022

Instead of CESL buying the electric three-wheelers directly from manufacturers and selling them to the customer, complete with the Centre-funded subsidy under the Faster Adoption and Manufacturing or Electric Vehicles (FAME) scheme, it will now act as a facilitator between the customer and financier, a top official of CESL said.

As per estimates each of these electric three-wheelers cost in the range of ₹300,000- ₹325,000, taking the entire value of the 100,000 units to Rs 3,000 crore to Rs 3,250 crore

“We are not doing the financing but somebody else will. "

=========================================================

Switch Mobility bets on low TCO-driven model to make e-bus adoption viable 

Lower TCO has driven faster electric vehicle adoption in three-wheelers. Similarly, we are focusing on TCO for the electric bus, too. Because the e-mobility as a service (eMaaS) model has only 20-22 per cent cash outflow due to the cost of the electric bus

Our e-buses today are operating at 98 per cent uptime (as against the business case of 95 per cent), which allows more collections and revenue

The company will offer different business models such as eMaaS, wet lease, etc., depending on the customer segment requirements.  

============================================================

CESL’s e-bus tender: Competition charge to match Tata Motors’ L1 bid price / BL / 15 June

Independent Analyst Mahantesh Sabarad said, “CESL has long-term plans that envisage procuring 50,000 buses over 10 years. By bidding low prices, Tata Motors stands a good chance to grab a major share of those 50,000 buses providing a solid base to absorb associated fixed costs. High volumes ensure they cross breakeven volumes comfortably. That’s one reason why they could be profitable.”