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UP Tender Favors Local EV Bus Makers
17 Oct
Summary
- Uttar Pradesh reissued a ₹1,245-crore tender for 1,225 electric buses.
- A new rule favors manufacturers with UP facilities, allowing them 600 buses.
- The policy may increase costs and complicate electric public transport expansion.
Uttar Pradesh has reissued a ₹1,245-crore tender for 1,225 electric buses, introducing a significant procurement preference for Original Equipment Manufacturers (OEMs) with manufacturing units within the state. This revised Request for Proposal (RFP), issued on October 15, allows eligible 'UP OEMs' to secure up to 600 buses by matching the lowest bidder's price, even if they are not the initial lowest bidder.
The earlier tender, issued in June, lacked this state-specific preference. Companies like Tata Motors, Ashok Leyland, and JBM Auto, which have manufacturing facilities in Uttar Pradesh, stand to benefit. This change comes as these companies have faced increasing competition from non-state-based manufacturers in recent tenders.
Industry executives expressed concerns that the new clause could weaken price competition and potentially increase procurement costs for the state. They argue that bidders might be less inclined to offer aggressive discounts, undermining the price discovery process. A sector expert cautioned that this policy could encourage other states to implement similar location-based preferences, potentially leading to legal challenges and inefficiencies in mass manufacturing.
The tender includes 725 nine-meter and 500 twelve-meter electric buses, operating under a gross cost contract model for 12 years. Bids are due by November 26, with technical bids opening on November 27.
