The delay in funds from the US is due to some procedural bottlenecks and CESL did not have an FCRA license to receive foreign funds, according to a senior government official
13 Sep 2024 | 2454 Views | By Kiran Murali and Amit Vijay M
Last year on the sideline of COP28 last year, India and the US agreed to set up a joint payment security mechanism (PSM) to boost the electric bus adoption in India with a fund of $390 million (close to Rs 3,315 crore).
The US had pledged to contribute $150 ...
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Last year on the sideline of COP28 last year, India and the US agreed to set up a joint payment security mechanism (PSM) to boost the electric bus adoption in India with a fund of $390 million (close to Rs 3,315 crore).
The US had pledged to contribute $150 million, while the Indian government will put the remaining $240 million. However, the government is yet to receive the $150 million support from the US for the finance security mechanism, according to a senior government official.
“The delay in receiving funds from the US is mainly because of some procedural bottlenecks and CESL did not have an FCRA (Foreign Contribution Regulation Act) license to receive foreign funds,” the official said.
On Wednesday, the government sanctioned Rs 3,435 crore under the new PM-eBus Sewa-PMS scheme with to support over 38,000 electric buses till 2028-29.
The PMS scheme is critical for the adoption of electric buses in the public transport sector as it addresses the concerns of OEMs or electric bus operators in case of default of payment by state transport units (STUs).
Public transport authorities such as STUs procure electric buses through two models - gross cost contract (GCC) and outright purchase. Under the GCC model, OEMs or operators, manage the operation and maintenance of the buses, with STUs paying a per-kilometer cost. STUs are not required to pay the upfront cost of the bus under this model.
Through the PSM scheme, the government looks to address this concern by ensuring timely payments to OEMs or operators through a dedicated fund. In case of default of payments, the state-owned tendering and procuring agency CESL will make necessary payments from the scheme funds which will be later recouped from the STUs.
“Now the government has sanctioned the entire Rs 3,435 crore required for the PSM. Once we receive the funds from the US, the contribution from the Government of India will be lower for this scheme,” the official said.
The official noted said the CESL has now been granted an FCRA license for receiving foreign funds, and the contribution from the US is likely to come in this financial year.