Government Approves PM-eBus Sewa-Payment Security Mechanism

Key Highlights:

• The Government of India approved the PM-eBus Sewa-Payment Security Mechanism scheme to support electric buses.
• This scheme establishes a Payment Security Mechanism Fund to secure payments to OEMs and operators.
• It aims to support 38,000 electric buses with a financial outlay of ₹83,435.33 crore over 12 years.
• The scheme will help public transport authorities (PTAs) and operators by covering payment defaults and promoting new technologies.
• Convergence Energy Services Limited (CESL) will implement and oversee fund distribution for the scheme.

The Government of India has approved the PM-eBus Sewa-Payment Security Mechanism through the Ministry of Heavy Industries. This initiative aims to support the procurement and operation of electric buses (e-Buses) across the country by setting up a Payment Security Mechanism Fund. 

This fund will help reduce delays in payments to manufacturers and operators involved in Concession Agreements with Public Transport Authorities (PTAs), enhancing their financial stability.

Key Objectives of the PM-eBus Sewa Scheme

• Payment Security: Ensures payments to operators, even if PTAs default.
• Fund Recoupment: Allows the government to recover funds from the State Governments or Union Territories in case of non-repayment.
• Support for Innovation: Encourages PTAs to adopt innovative technologies and build operational capacity.

Major Features of PM-eBus Sewa

Scheme Coverage: The initiative supports approximately 38,000 e-buses.

Target Beneficiaries: Public Transport Authorities and OEMs (Original Equipment Manufacturers) or bus operators.

Eligibility:

• PTAs must adopt the Gross Cost Contract (GCC) model and follow specific payment security guidelines, including registering with RBI and procuring through Convergence Energy Services Limited (CESL).
• OEMs and operators are required to enter into Concession Agreements with qualified PTAs.

Duration: Payment security will cover each e-bus for up to 12 years.

Financial Outlay: The scheme's total budget is set at ₹83,435.33 crore.

Implementation Process

1.    For OEMs and Operators:

• PTAs will maintain an Escrow Account for transaction security.
• OEMs/operators will submit invoices in accordance with their Concession Agreement.
• Payment defaults by PTAs will be reported to CESL for action.

2. Fund Disbursement:

• CESL will review payment requests and release approved funds to the Escrow Account.

3. Repayment Mechanism:

• PTAs are required to repay disbursed funds within 90 days, including any Late Payment Surcharge (LPS) if applicable.

Oversight and Implementing Agency

Steering Committee: A committee with representatives from key ministries and CESL will oversee the scheme’s implementation.

Implementing Agency: Convergence Energy Services Limited (CESL) will manage the operations, with detailed guidelines to be issued separately.

Also Read: PM E-Drive Scheme to Boost Electric Buses and Three-Wheelers in India

CMV360 Says

The PM-eBus Sewa-Payment Security Mechanism is a significant move towards promoting e-mobility in India. This will provide a secure payment structure, this initiative will not only encourage PTAs to expand electric bus fleets but also boost confidence among manufacturers and operators in the public transport sector. This step could accelerate the adoption of sustainable public transportation in urban areas across the country.