Cabinet Approves PM-eBus Sewa Scheme to Boost Electric Bus Deployment with Rs. 3,435.33 Crore Outlay

Currently, most Public Transport Authorities (PTAs) operate buses powered by diesel or CNG, which negatively impact the environment.

The Union Cabinet, led by Prime Minister Narendra Modi, has given the green light to the PM-eBus Sewa-Payment Security Mechanism (PSM) scheme. With a financial outlay of Rs. 3,435.33 crore, the scheme aims to support the deployment of over 38,000 electric buses (e-Buses) between FY 2024-25 and FY 2028-29, ensuring their operation for up to 12 years post-deployment.

Currently, most Public Transport Authorities (PTAs) operate buses powered by diesel or CNG, which negatively impact the environment. The shift to e-buses promises to be a more eco-friendly option with lower operational costs. However, the high upfront cost and lower revenue from operations have been obstacles for PTAs in adopting electric buses.

To address this, the scheme introduces a Public Private Partnership (PPP) model under the Gross Cost Contract (GCC). This model relieves PTAs from paying the initial cost, as Original Equipment Manufacturers (OEMs) and operators will procure and run the e-buses, with monthly payments from the PTAs. To mitigate the risk of payment defaults by PTAs, a Payment Security Mechanism has been set up. In case of default, CESL, the implementing agency, will ensure timely payments to OEMs and recover the amount from the PTAs or the respective State/UT governments.

The initiative encourages private sector participation in the deployment of e-buses, which will reduce greenhouse gas emissions and the use of fossil fuels, benefitting both PTAs and the environment across States and Union Territories.