Tamil Nadu Plans Fresh Tender for 500 Electric Buses Under GCC Model

The Tamil Nadu government has initiated plans to procure 500 electric buses for Chennai, Madurai, and Coimbatore using the Gross Cost Contract (GCC) model. This move follows the official cancellation of a 2024 tender process, which received approval from the German funding agency KfW on June 18. Under the proposed GCC structure, private concessionaires will be responsible for bus procurement, operation, maintenance, and staff employment, sharing a portion of passenger fare revenue with state transport corporations.

Officials argue that the GCC model alleviates the state's fiscal pressure by offloading operational costs like vehicle maintenance, fuel, and employee salaries. This transition builds upon the existing framework utilized by the Metropolitan Transport Corporation (MTC), which currently manages over 600 electric buses under similar arrangements. Transport authorities state that the operational expenditure remains controlled at approximately ₹77 per kilometre for non-AC buses and ₹81 per kilometre for air-conditioned models.

The proposal faces opposition from employee unions, specifically the CITU-affiliated Tamil Nadu State Transport Employees Federation, which interprets the model as a precursor to public transport privatization. Amidst these developments, MTC has faced operational challenges, with over 160 services cancelled recently due to alleged staff shortages and maintenance issues. The state transport department is now awaiting a formal response from KfW regarding the implementation of the new tender.