Maharashtra transport minister orders cancelling MSRTCs Rs 10,000 crore e-bus contract over missed deadlines

Indian Express

27-05-2025

Maharashtra Transport Minister and Maharashtra State Road Transport Corporation (MSRTC) Chairman, Pratap Sarnaik, on Monday ordered the termination of the wet lease contract awarded to Olectra Greentech Ltd and Evey Trans Pvt Ltd for supplying 5,150 electric buses to the state-run public transport agency. The decision was made citing the companies' failure to meet delivery deadlines and repeated delays in supplying the e-buses.
In July 2023, MSRTC had awarded one of the world's largest electric bus supply contracts, valued at Rs 10,000 crore, to Olectra Greentech Ltd and Evey Trans Pvt Ltd, both subsidiaries of Megha Engineering and Infrastructure Ltd, to expand its fleet. The agreement required delivery of the buses over a 24-month period starting November 2023, with a target of 215 buses per month.
According to the initial terms of the contract, the consortium was expected to deliver over 4,000 buses by May 2025. The contract was later revised, reducing the delivery target to 1,000 buses by the same date. However, as of now, the consortium has delivered only 240 buses.
'There is doubt about the company's ability to supply buses in the future. Since the corporation urgently needs buses, if the company cannot fulfill its delivery obligations, the tender contract should be cancelled. At a time when MSRTC is in dire need of vehicles, the company's failure to meet deadlines is unacceptable,' said Sarnaik during a review meeting at MSRTC headquarters.
The consortium has stated that it has not yet received any official communication from the government regarding cancellation of the contract.
'We have not received any such notice from MSRTC. We remain committed to delivering pollution-free, comfortable, and economical public transportation solutions, namely Olectra e-buses, to our esteemed client MSRTC,'the company Olectra said in its statement.
So far, MSRTC has issued seven show-cause notices to the consortium and imposed penalties totaling approximately Rs 4 crore for breaches of contract and delays in timely delivery.
The company had previously cited global supply chain disruptions—particularly the import of lithium-ion battery cells from China, which constitute nearly 50% of the bus cost, as the primary reason for the delays. While the chassis and bus bodies are manufactured domestically, dependency on imported components has hampered production.
The consortium's poor delivery record is not limited to MSRTC. It has also failed to meet commitments made to the Brihanmumbai Electric Supply and Transport (BEST) undertaking.
In May 2022, BEST had awarded the company a contract to supply 2,100 electric buses within a year. However, over the past three years, only 578 buses have been delivered.
'Currently, 100 buses per month are being delivered to BEST. In the past four months, more than 300 buses have been supplied, and the company aims to complete the 2,100-bus contract within this financial year,' a company spokesperson said.
The delay has significantly hampered MSRTC's efforts toward financial recovery and fleet modernization. Serving over 5.3 million passengers daily, MSRTC operates one of India's largest inter-city bus networks and relies heavily on state support to cover expenses, including salaries for over 90,000 employees.
'Owing to the delays and non-performance, the minister has ordered the immediate cancellation of the contract with the consortium. The corporation is now exploring legal options to recover damages and is seeking alternative suppliers to meet its electrification targets,' said a senior MSRTC official.