The Maharashtra State Road Transport Corporation (MSRTC), which awarded one of the world’s largest e-bus supply contracts for 5,150 electric buses in July 2023, has received just 20 buses from Olectra Green Tech Limited and Evey Trans Private Limited — subsidiaries of Megha Engineering and Infrastructure Limited (MEIL), with which it had entered an agreement for supply of electric buses.
This represents less than two per cent of the total fleet expected to be received by the MSRTC over the past eight months. The company was supposed to supply 215 buses to the MSRTC every month over 24 months, and in eight months between November 2023 and June 2024, the MSRTC was to receive over 1,700 buses as per the agreement. The transport corporation, operating one of the largest inter-city bus systems in India, has now issued a notice to the consortium, imposing a penalty of Rs 2.2 crore as per contractual clauses.
Earlier, The Indian Express reported that the Brihanmumbai Electric Supply and Transport (BEST), an autonomous body under the city’s civic corporation, received only 185 electric buses out of the 2,100 promised by MEIL subsidiary Evey Trans Private Ltd before August 2023.
“We issued a notice to the contractor in June and imposed penalties as per contract clauses. The contractor cited production issues. They have supplied 20 buses and committed to delivering an additional 50 buses by the end of July,” Madhav Kusekar, vice-chairman and managing director of MSRTC, told The Indian Express.
The contract was signed between MSRTC and a consortium comprising Olectra Green Tech Limited (Olectra) and Evey Trans Private Limited (EVEY) — subsidiaries of Megha Engineering and Infrastructure Limited (MEIL) — on November 1,2023.
MEIL, promoted by Pamireddy Pichi Reddy and PV Krishna Reddy, was the second largest purchaser of electoral bonds, acquiring bonds worth Rs. 966 crore, with Rs 584 crore directed to the BJP between April 2019 and October 2023.
In July 2023, the MSRTC awarded the contract to the consortium for supplying, operating and maintaining 5,150 electric buses. Evey Trans was tasked with procuring these buses from Olectra and was to oversee their delivery over 24 months, with the contract valued at approximately Rs 10,000 crore. The corporation serves approximately 53 lakh commuters daily across Maharashtra’s remote areas and a few services in other states, maintaining a fleet of 15,945 buses.
As per contract terms, delivery of these 5,150 electric buses was expected within 24 months from the prototype inspection, with 215 buses (approximately 4% of the total) to be delivered monthly starting three months after agreement signing. The prototype inspection reportedly took place in November 2023, but since then, only 20 buses were delivered in February this year.
These 20 electric buses were flagged-off by Chief Minister Eknath Shinde in February this year and they are operating on the Borivali-Thane-Nashik Route route.
According to the Letter of Intent (LoI) accessed by The Indian Express, the consortium was expected to deliver about 1,700 buses in the past eight months since November 2023, which has not materialised.
The delay in bus supply poses a significant setback to MSRTC’s financial recovery plan, as the corporation has faced financial strain in the recent years, relying on monthly state government aid to pay its 90,000 staff salaries.
The companies have, however, attributed the delay to disruptions in the global supply chain, particularly affecting imports such as lithium-ion battery cells from China, which constitute about 50 per cent of the electric bus cost.
“Although chassis and bus bodies are manufactured locally, reliance on imported components presents challenges.
Global supply chain disruptions, exacerbated by the pandemic, have hindered timely bus deliveries. Manufacturers have struggled to meet order demands,” Olectra stated.
The company acknowledged a Rs 2.2 crore fine imposed by the MSRTC for contract non-compliance.
“We have initiated an automated production plant near Hyderabad in Seetharampur, expected to be fully operational in the coming weeks. This facility will enhance our annual production capacity to 10,000 buses,” the company added.
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