Centre considering to fund STUs at lower rate of interest to convert diesel fleet into electric

Initially, the centre government is planning to introduce 20 buses on pilot basis based on economically viable lithium ion battery technology

State transport undertakings might soon have access to cheaper credit.

If the plans of the road ministry fructify, credit at 4-5 per cent would be available from the Centre’s Green Fund to convert state transport undertakings’ buses, running on costly imported fuel, to electric.

Initially, the Centre had planned to introduce 20 buses on a pilot basis, based on economically viable lithium ion battery technology, being developed in collaboration with the Indian Space Research Organisation. This, if successful, might offer credit at lower rate of interest to the state government undertakings to make their fleet electric.

India has 150,000 buses registered with the various state transport undertakings.

“ISRO uses lithium ion batteries in satellites and rockets,”said Nitin Gadkari, minister of Road, Transport and Highways, addressing a seminar. “We requested them to develop the technology for vehicles, keeping cost under control. They have developed a battery that is almost one-tenth the cost of what I saw in London. The battery set costs Rs 5-7 lakh against Rs 55 lakh in developed countries. We will introduce three buses with these batteries. We have plans to run around 20 buses on a pilot basis. Based on its success, we will motivate state transport undertakings to convert their fleet into electric.”

The minister said it would take Rs 10-11 lakh to convert a diesel bus into electric. The government was looking at offering finance at an interest if 4-5 per cent from the Centre’s Green Fund, he added.

Electric-powered vehicles would help India cut huge import bills and also check pollution by cutting down carbon emissions. “This will reduce their (state corporations’) operating expenses significantly.”

The government was also considering encouraging car owner to discard their old vehicles, by giving incentives up to Rs 1.5 lakh, and purchase new ones.