CHENNAI: With KfW, a German-based funding agency, approving the transport department's request to cancel a tender for procuring 500 electric buses for Chennai, Madurai and Coimbatore, the Tamil Nadu government has proposed issuing a fresh tender to operate a similar number of buses under the Gross Cost Contract (GCC) model.
Under the GCC model, private concessionaires will procure, own and operate the buses, collect fares from passengers and appoint employees. A share of the daily revenue will be passed on to the transport corporations. In the earlier tender floated in 2024, private firms were to supply and maintain the buses for a specified period, while the transport corporations would operate them.
“The previous government sought cancellation of the earlier tender in March this year. KfW approved the cancellation on June 18. The department has now proposed implementing the project under the GCC model, and KfW is yet to respond,” a transport department source said.
It may be noted that the Metropolitan Transport Corporation (MTC) is already operating more than 600 buses under the GCC model. The operating cost of non-air-conditioned and air-conditioned electric buses is ₹77 and ₹81 per kilometre respectively.
MTC has recently floated four tenders under the GCC model to procure 20 double-decker air-conditioned electric buses, 1,300 air-conditioned electric buses and 220 small air-conditioned electric buses for first- and last-mile connectivity. Department sources said the model would help transport corporations reduce expenditure on maintenance, fuel and staff salaries.
However, K Arumuganainar, general secretary of the CITU-affiliated Tamil Nadu State Transport Employees Federation, criticised the move, saying it would amount to privatisation of bus operations and weaken state transport corporations.
“Transport corporations should procure and operate buses directly. Just as power procurement from private firms has contributed to the present condition of the electricity board, a similar situation could arise in transport corporations if the GCC model is expanded,” he said.
MTC cuts services
Meanwhile, MTC has reduced the number of bus services operating across Chennai over the past week. On Tuesday alone, 162 scheduled services were reportedly cancelled.
While officials attributed the cuts to administrative reasons, employees alleged that the reduction stemmed from shortages of drivers, conductors and spare parts. MTC operates 3,858 scheduled services daily across 686 routes.