Maharashtra MSRTC’s Mega Electric Bus Contract with MEIL-Linked Consortium Sparks Fiscal Concerns, Demands Probe
The Maharashtra State Road Transport Corporation (MSRTC)’s recent contract for the procurement, operation, and maintenance (O&M) of 5,150 electric buses has come under intense scrutiny amid allegations of financial mismanagement and irregularities linked to a consortium tied to Megha Engineering and Infrastructures Limited (MEIL). Workers’ unions and civic advocates warn the deal could burden the state with losses exceeding ₹11,000 crore, prompting calls for urgent government intervention.
The contract, awarded to a consortium of Olectra Greentech Limited and Evey Trans Private Limited—both subsidiaries of MEIL—has raised red flags over its inflated cost structure. Reports indicate MSRTC agreed to pay ₹78 per kilometer, starkly higher than the ₹65/km rate adopted for comparable projects in cities like Mumbai (BEST) and Nagpur. Analysts estimate this pricing disparity could inflate the project’s total cost to ₹70,378 crore, nearly ₹11,730 crore more than market-aligned benchmarks.
Key Concerns Highlighted:
1. Unjustified Cost Premiums: Despite economies of scale expected from procuring 5,150 buses, MSRTC’s per-kilometer rate remains disproportionately high compared to smaller contracts elsewhere.
2. Excessive Operational Guarantees: The contract mandates payments for a minimum of 400 kilometers daily per bus—double the 200/km requirement in Nagpur and Mumbai—forcing MSRTC to pay for underutilized services.
3. Extended O&M Period: A 12-year O&M commitment, longer than the standard 10-year term in similar agreements, locks the corporation into prolonged financial obligations.
4. Limited Competition: The bidding process saw only two participants, with Olectra Greentech (already partnered with Evey Trans) effectively rendering it a single-bid tender, raising transparency concerns.
The controversy follows a narrowly-averted fiscal misstep in Nagpur, where initial plans to procure 250 electric buses at ₹78/km were scrapped after public outcry. A re-tender slashed rates to ₹65/km, saving ₹275.5 crore. This precedent has fueled demands for MSRTC to revisit its contract terms.
Activist Vikas Thakre escalated the issue, urging Chief Minister Devendra Fadnavis to:
– Launch a judicial inquiry into alleged irregularities.
– Halt contract execution pending review.
– Cancel the current agreement and re-tender with competitive, transparent terms.
In response, the Chief Minister has reportedly directed the Chief Secretary to investigate the claims and submit findings promptly.
Union Demands Accountability
Srirang Barge, General Secretary of the workers’ union, criticized the deal’s opacity, emphasizing that the guaranteed daily payments—totaling ₹3.25 crore daily—could drain over ₹100 crore monthly from MSRTC’s coffers. “This contract risks crippling the corporation’s finances. A fair, competitive bidding process is non-negotiable to protect public funds,” he asserted.
With MSRTC already operating 168 electric buses and planning a massive fleet expansion, stakeholders stress the need for immediate corrective measures. Experts warn that unchecked losses could destabilize the state transport utility, impacting services and taxpayer interests.
As scrutiny intensifies, pressure mounts on the Maharashtra government to prioritize fiscal prudence and accountability in its green mobility ambitions.