Swiss e-bus contract: Govt to spend Rs 2934 cr, to face loss of Rs 540 cr annually


B Ajith Raj

The cabinet had decided to ply 3000 e-buses by 2030. Soon after this, the Switzerland headquartered company Hess expressed interest to invest in the project.

Photo: YouTube screengrab

Thiruvananthapuram: By signing the contract with Swiss company Hess to manufacture electric buses, the Kerala government will have to face a huge financial liability. The government will have to provide 5 acre land owned by KSRTC for the manufacturing unit and also grant Rs 2934 crore as government's share. KSRTC will have to provide at least Rs 6000 crore to buy e-buses. A loss of Rs 540 crore is expected every year, which also should be managed by the government.

The cabinet had decided to ply 3000 e-buses by 2030. Soon after this, the Switzerland headquartered company Hess expressed interest to invest in the project and submitted an application at the transport department. Also a draft agreement was prepared. As it causes huge financial loss, the finance department opposed the project. Later, the project estimate and liability on the government was assessed in a meeting convened by the chief minister.



3000 buses in 4 years

As per the agreement, 3000 e-buses will be manufactured within four years. But 100 buses have to be fully imported from Switzerland in the first year. In the later years, the vehicle parts will be assembled at the manufacturing unit in Thevara. Rs 5988 crore is estimated for 3000 buses. KSRTC have to purchase all these buses and by making it an agreement, the Swiss company can ensure market and profit.

E-bus causes loss

KSRTC had reported to the government that e-buses are not profitable. A loss of upto Rs 24-26 per kilometre is expected. Loss can be reduced by at least Rs 4, if the metro model card system is implemented to avoid conductors. Even then, loss of Rs 20 remains. The government will have to provide KSRTC, Rs 540 crore annually to manage this loss. The amount is expected to be generated through green tax, parking fee and advertisement tax.

Now the government provides Rs 1000 crore to KSRTC annually. When the e-buses are introduced, an additional Rs 540 crore will have to be given every year. KSRTC had bought 10 electric buses from a company named Maha Voyage which also ended up causing huge loss. Besides all of this, the government is making the new e-bus contract only to add to the losses.

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