Mumbai: Bus makers in India have their order books full as efforts to boost road transport by some state governments and a switch to stricter emission norms in April are prompting state transport undertakings (STUs) to replace their ageing fleets, said officials at bus makers and STUs.
Gujarat, Haryana, Karnataka, Kerala, Maharashtra, Rajasthan, West Bengal and Delhi cumulatively spent Rs247 crore in 2015-16, up 31% from a year earlier, to boost road transport. They are likely to spend Rs287 crore in 2016-17, according to data from Centre for Monitoring Indian Economy.
STUs slowed purchases of new buses in 2013-14 following uncertainty surrounding the fate of the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) after the Narendra Modi-led government came to power. Among other things, JNNURM offered financial incentives to state governments to replace old buses.
For instance, BEST Undertaking, which runs buses in Mumbai, hasn’t placed an order for a single bus in the past six years even as it has scrapped more than 1,000 units, said Jagdish Patil, general manager at BEST. “This has been impacting the frequency of our services," he said. It has recently placed an order for 300 buses from Tata Motors Ltd, but that may not be enough.
Other states too went slow for various reasons—from a shortage of drivers to confusion around the availability of funds. In the absence of incentives for bus purchases, STUs are now dipping into available funds to replace old buses.
Over the past three months, India’s top three bus makers—Ashok Leyland Ltd, Tata Motors and VE Commercial Vehicles Ltd—have bagged orders for supplying an aggregate of 10,600 units. The orders are to be executed by the end of fiscal 2017 and are set to boost sales in a segment that has remained depressed for the past two years.
On 6 September, Tata Motors said it won orders to supply 5,000 buses worth Rs900 crore to 25 STUs during the April-August period, an 80% jump from the same period a year ago and the highest in four years.
The new orders, the biggest since 2011 for Tata Motors, are for fully built buses that can meet upgraded specifications with regard to ground clearance and IT enablement, said Ravindra Pisharody, executive director of commercial vehicles at Tata Motors.
In July, Ashok Leyland bagged orders for nearly 3,600 buses from various STUs. “The current order book, as of today, from STUs is around 4,200 units," said T. Venkataraman, senior vice-president, global buses. The value of the order is Rs600 crore.
The orders are being driven by a pan-India implementation of Bharat Stage IV emission norms, he said. This will push up prices by Rs2-3 lakh, and so, STUs want to purchase them now.