The Tamil Nadu government intends to introduce 500 electric buses in Chennai, Madurai, and Coimbatore under the Gross Cost Contract (GCC) model. This decision follows the approval from Germany-based funding agency KfW to cancel a previous procurement process initiated in 2024. The new proposal aims to have private concessionaires procure, own, and operate the buses, reducing financial burdens on state transport corporations significantly.
The proposed GCC model will involve private concessionaires handling bus procurement, maintenance, operation, driver employment, fare collection, and revenue sharing with state transport corporations. Officials are awaiting KfW’s response to proceed with the implementation of this model. The Metropolitan Transport Corporation (MTC) has already adopted a similar model for over 600 buses, showcasing its feasibility and benefits.
Under the existing GCC contracts, the operating cost for non-air-conditioned electric buses stands at around Rs 77 per kilometer, while for air-conditioned buses, it is Rs 81 per kilometer. Additionally, the MTC has initiated tenders to expand its electric fleet, including procurement of various types of electric buses to enhance connectivity across Chennai. However, this expansion plan has faced criticism from employee unions, citing concerns about the gradual privatization of public transport.
Employee unions, including the Tamil Nadu State Transport Employees Federation, have raised objections to the proposed GCC model expansion, fearing negative implications on the financial health of transport undertakings. They advocate for continued direct procurement and operation of buses by state transport corporations to maintain public transport integrity. Meanwhile, the MTC has faced scrutiny for reducing bus operations in Chennai, with concerns raised about service disruptions due to administrative and resource challenges.
