Cabinet approves PM-eBus Sewa PSM scheme for 38,000 e-buses • EVreporter

The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the “PM-eBus Sewa-Payment Security Mechanism (PSM) scheme” to facilitate the procurement and operation of electric buses (e-buses) by Public Transport Authorities (PTAs). The scheme has an allocated budget of INR 3,435.33 crore and aims to support the deployment of over 38,000 e-buses between FY 2024-25 and FY 2028-29. It will ensure the operation of these buses for up to 12 years from the date of deployment.

Currently, most buses operated by PTAs use diesel or CNG, which contribute to environmental challenges. In contrast, e-buses are seen as having lower operational costs. However, the higher upfront costs of e-buses and revenue constraints present challenges for PTAs in adopting them.

Under the scheme, PTAs will procure e-buses through the Public Private Partnership (PPP) model, specifically using the Gross Cost Contract (GCC) approach, where Original Equipment Manufacturers (OEMs)/operators will supply and manage the buses, while PTAs will make monthly payments. To address concerns about potential payment defaults, the scheme establishes a fund managed by CESL, the implementing agency, to ensure timely payments to OEMs/operators. In cases of payment defaults, the scheme allows CESL to cover the payments, which will be recouped later by PTAs, states, or Union Territories (UTs).

The initiative is intended to encourage private sector involvement in the adoption of e-buses and aims to reduce greenhouse gas emissions and fossil fuel consumption. The scheme will be available to PTAs in all states and UTs that choose to participate.

Also read: 10,000 e-Buses to be deployed in 169 cities under PM-eBus Sewa