The government’s plans to electrify bus transportation throughout the nation may encounter a roadblock even though automakers also started to lose the plot as a consequence of the absence of billing guarantees in tenders.
For instance, the largest bus manufacturer in India, Tata Motors, chose not to participate in the current Phase I of the National Electric Bus Program (NEBP), which consists of 6,465 electric buses and is controlled by the government (CESL).
The move came as a surprise since Tata Motors won two-thirds of the previous tenders last year where it committed to supplying 3600 electric buses.
“After the first tender, we have been in discussions with the government about having a payment security mechanism by which the entire model becomes bankable,” said Girish Wagh, executive director of Tata Motors. We repeatedly stated our position that we won’t participate unless we have the payment security mechanism.
In essence, a payment security mechanism is a fund that offers interest-free capital in the event of a payment default.
