Year after deadline, Megha Engineering unit sends less than 10% EV bus order

Asked about the delay, BEST General Manager Anil Diggikar said, “The supplier has cited certain issues relating to spare parts that have impacted the manufacturing of buses and thereby a delay in their supply. We sent them a notice last year and have followed it up with further notices.”

An EveyTrans spokesperson said, “The main problem is acquiring parts for manufacturing the battery. In our EV buses, the battery is laid down in the chassis and 60% of the manufacturing cost goes behind it. Owing to the Indo-China tensions we couldn’t get necessary raw material from China, which has contributed to delay in production.”

MEIL, promoted by Pamireddy Pichi Reddy and PV Krishna Reddy was the second largest purchaser of electoral bonds, having bought bonds regularly in multiple windows between April 2019 and October 2023. Of its total electoral bond purchases of Rs 966 core, the maximum—Rs 584 crore—went to the BJP. EveyTrans, the MEIL subsidiary, was issued work order by BEST in May 2022.

Information put out in public domain by Election Commission showed that MEIL had donated Rs 122 crore to BJP through electoral bonds during the calendar year 2022. BEST officials said since the buses are coming in a phased manner, the payments are staggered.

“The operator (Evey) has also deposited a bank guarantee with us, which could be forfeited if there is any serious violation,” the official said.The Fifteenth Finance Commission had sanctioned Rs 620 crore to BMC towards air quality management over three years.

Of this, Rs 493 crore, or almost 80 per cent, was allocated to BEST Undertaking for procurement of electric vehicles. The entire fleet of 2,100 buses was to be delivered by August 2023.

The RTI data shows that while 20 buses were delivered in 2022, 72 buses were delivered in 2023, 93 were delivered this year till July 4, by EveyTrans. Senior officials at BEST confirmed that the balance amount of Rs 287.2 crore remains unutilised.

BEST Undertaking officials said at least three notices have been sent to EveyTrans since September 2023, with the latest sent in April this year. They said the agency has been instructed to supply the buses at the earliest.BEST had issued the work order for acquiring 2,100 electric buses on wet-lease model from EveyTrans Pvt Ltd in May 2022.

Under this model, the supplier provides manpower for operation and maintenance, along with the fleet of vehicles.

According to the BEST’s tender clause, 25 per cent of the buses were to be delivered within six months of issue of Letter of Acceptance (LoA) of the contract, the next tranche of 25 per cent within 12 months from issuing LoA and remaining 50 per cent within 18 months from the date of issuing LoA to the supplier.The clause also had a provision for penalty if delivery was delayed. It could levy Rs 2,000 per bus per day of delay up to the date of supply of buses, according to the tender. BEST also holds the right to terminate the contract if EvyTrans fails to supply the buses/ bus services before August 2023.

“If the Successful Bidder fails to cure the default within the Cure Period … or where no Cure Period is specified, then within a Cure Period of 120 days, the Successful Bidder shall be deemed to be in default of this Agreement,” the contract clause reads. As part of the 2022 work order, EveyTrans was supposed to maintain and operate these buses for 156 months (13 years) after acquiring them from its sister firm Olectra, another subsidiary of MEIL.

“EveyTrans is supposed to operate each bus at a tariff of Rs 46 per kilometre, which is the cheapest rate that we have got after putting out the bids. We are not too keen on scrapping the contract right now, because if we do so, then we will have to re-float the tender and that may lead to an increase in the tariff of wet-lease…” said an official.

“There is a provision of imposing a penalty for delayed delivery. However, this could be levied only after the entire consignment of 2,100 buses is received by us,” the official said.

On the release of Rs 205 crore to EveyTrans, the BEST official said this amount has been paid as a token to EveyTrans for supplying the buses as per the guidelines laid by the Ministry of Heavy Industries of government of India, while the balance amount remains unutilised as of now with BEST.

“The rules state that 20 per cent manufacturing cost should be paid to the agency in advance after the work order is issued. Following this, 40 per cent of the cost would be paid after receiving the consignment of buses, while the remaining 40 per cent would be supplied to the fleet operator after six months of the successful commercial operation of buses,” said an official.

“Since the buses are coming in a phased manner, the payments are staggered. The operator (Evey) has also deposited a bank guarantee with us, which could be forfeited if they start stretching the schedule of delivery by a larger extent,” the official added. The official said that while they have received 185 buses till now, 30 more are expected to arrive over the next few weeks,”

The EveyTrans spokesperson also said, “Till January this year, we had only one production facility, and from February onwards, one more facility has been added. As a result, now production has started to pick up. Besides BEST, we are also supplying buses to MSRTC, Nagpur City, Hyderabad, Surat, Dehradun among other cities. Hence, there is a huge demand and supply gap that has been created over time with us.”