Mass mobility

FAME-III will drive low-emission public transport

With the second edition of Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME-II) about to end in March, the government is reportedly drawing up the contours of FAME-III, focused on mass mobility. The plan is to replace 800,000 diesel buses, which account for one-third of the buses on the road, with electric buses to make public-transport systems more environmentally sustainable. The shift in focus to mass mobility, which delivers better emission outcomes than personal mobility solutions do, is a good decision. To this end, the government is reportedly planning more than halving FAME funds for e-two-wheelers on grounds that the penetration of e-buses has fallen sharply to 3.3 per cent in 2023 from 4.6 per cent in 2022. Only 4,000 e-buses ply on roads compared with 2.3 million diesel and CNG (compressed natural gas) buses. The scheme under discussion seeks to address some of the issues that have limited the penetration of electric vehicles (EVs) — such as earmarking funds for charging infrastructure, especially on highways, and on enhancing EV facilities around the country.

Overall, however, FAME-III’s success is dependent on the state road transport undertakings (SRTUs), which are mostly in a parlous financial state. According to the data from the Ministry of Road Transport and Highways, only seven of the 56 SRTUs made profits in 2018-19, the latest year for which figures are available. Betting on such shaky state-owned utilities can be risky as shown by the serial plans to bail out chronic loss-making state-owned power distribution companies (discoms). Though FAME-III will have a sunset clause of two years, there is no gainsaying that it will not be continued, so it needs to be designed to deliver the government’s objectives optimally. More lasting success could be achieved if the scheme sought to address some of the key problems that resulted in a patchy record for the mass mobility programme under the earlier Jawaharlal Nehru National Urban Renewal Mission (JNNURM), which began in 2009. Transport economists have suggested the JNNURM might have been more successful had it included the development of related support infrastructure, especially for less profitable or loss-making SRTUs, such as depots, terminals, workshops, and so on. The upshot of this deficiency in many SRTUs was that the buses tended to be poorly maintained and their life-spans shortened, defeating the purpose of the scheme.

That said, FAME-II has addressed a key weak point of the JNNURM. That is ensuring that the operation of buses is built into the financing scheme. Under the JNNURM, the focus on buying buses of a particular (upgraded) specification did not necessarily mean that SRTUs actually operated them. Several merely bought buses under the subsidy, and then they lay idle. Under the existing scheme, buses are supported through an operating-cost model for 12 years. FAME III may tweak this by reverting to the capex model for SRTUs operating in hilly terrains on shorter routes. Also in the works are plans to aggregate large tenders to drive down unit costs in place of the JNNURM model of having SRTUs raise tenders based on central guidelines. Well designed, FAME-III could be a game changer for India. The challenge is to not let it go the way of the multiple discom bailout schemes.