Cash-strapped BMTC not keen on co-owning electric buses

The cash-strapped Bangalore Metropolitan Transport Corporation (BMTC) is set to approach the Union government seeking relaxation from joint ownership of electric buses, worried that it may expose the company to more liabilities in the future.

The Union government recently agreed to provide subsidy of Rs. 1 crore per bus for operating electric buses in the city, but with a rider that the BMTC must be the co-owner of the buses with the private operator chosen by it.

Hyderabad-based firm

In February, the BMTC had selected a Hyderabad-based company to operate 150 electric buses. Electric buses are far more expensive (up to Rs. 2.5 crore each) than diesel buses, because of which the transport corporation had taken a stand that it will not make any investment (buying buses, building infrastructure and staff salaries, including that of the driver), and instead let the private operator bear the cost. The BMTC had decided to transfer the subsidy from the Union government to the operator.

However, the recent direction by the Centre has put the BMTC in a fix. V. Ponnuraj, managing director, BMTC, said, “The board of the BMTC has decided to appeal to the Union government to relax the recent rider on joint ownership of e-buses to get the subsidy. If the corporation becomes a co-owner of the bus, it may expose the corporation to various liabilities. The private operator may approach financial institutions to buy the buses, and the BMTC inevitably becomes a party to it. There are also other issues, such as if a the bus is involved in an accident, the BMTC may also have to pay compensation if we become the co-owner.”

If the Centre does not agree to relax the rider, “we will explore legal options on how to avoid liability before reaching an agreement with the private operator”, he said.

In the first phase, the BMTC is planning to operate 80 e-buses. Each bus is expected to run 200 km a day.

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