Kerala Electric Bus Deal With Swiss Firm: Communist Government Spurns Centre’s Directive, Project Advisor Jhunjhunwala’s View

The Left Democratic Front (LDF) in Kerala has gone ahead with its controversial project to manufacture 3,000 electric buses for use in the state despite the Union Government’s directive and the e-mobility project advisor’s warning.

The Communist Party of India-Marxist (CPM) government had landed itself in a controversy over choosing global consultant agency Pricewaterhouse Coopers (PwC) and Switzerland bus manufacturer HESS AG for its e-mobility projects.

The project to manufacture electric buses is expected to cost between Rs 4,500 crore and Rs 6,000 crore.

The selection of HESS AG, in particular, was questioned by the Kerala Chief Secretary in January 2018, while in August last year, the State Finance Secretary, too, objected to the deal.

Kerala government’s decision to sign an agreement with HESS AG to produce electric buses is also against a directive from the Union government.

The Centre instructed the Pinarayi Vijayan government that only the public sector firm, Kerala Automobiles Ltd, should sign the agreement with the Swiss firm and not the State government, Malayalam daily Malayala Manorama reported.

The agreement with HESS AG was signed on behalf of the State government by the Transport Secretary, going against the Centre’s directive.

This is in contrast to Chief Minister Vijayan's statement that the agreement with HESS AG was signed with the Centre’s consent.

Advisor Jhunjhunwala's Views Ignored

On the other hand, renowned electric vehicles expert Dr Ashok Jhunjhunwala, who is the State government’s advisor in the e-mobility project, had told the CPM-led government that the electric buses might not serve the State much.

Jhunjhunwala, who is a professor in IIT-Madras, told the Vijayan government that there were many hurdles in implementing the project.

The Malayala Manorama report is in contrast to what Vijayan told the media last week. The Chief Minister said that the LDF government had decided to go ahead with the electric bus project after holding discussions with Jhunjhunwala and other experts.

Records of a meeting headed by Jhunjhunwala on 16 December 2017 to discuss the e-mobility project show that he had not given any view that it would benefit Kerala.

Jhunjhunwala had maintained that the buses would be costly since they would require batteries of larger size to operate.

In an interview with Swarajya last year, the IIT professor said that battery costs make up nearly 50 per cent of an electric vehicle.

The electric vehicles expert also told the meeting, in which the State Chief Secretary and 10 other top Kerala officials took part, that the government would have to set up outlets to charge the batteries of the buses and they would have to be fully supported by power distribution firms.

Jhunjhunwala finds problems with the current e-mobility project in the country as vehicle costs are seen beyond the scope of a majority of the country’s population.

His view is that the government should encourage swappable batteries and this would automatically bring down the prices of vehicles by at least 50 per cent.

Opposition parties led by the Congress-headed United Democratic Front (UDF) have accused the LDF government of appointing PwC as consultant for the project without inviting bids from other interested parties.

The signing of the deal with HESS AG is being questioned by the UDF, particularly when the Chief Secretary had questioned the process of its selection.

Many inconsistencies have been found in the Chief Minister’s explanation and justification of the deal.

Congress Lok Sabha member from Chalakudy in Kerala’s Thrissur district, Benny Behanan, has alleged that Jaik Balakumar, one of PwC’s directors, is associated with Exalogic Solutions, owned by Vijayan’s daughter.

This is among a series of controversies faced by the LDF government in the last 3-4 four months.

First, its agreement with US firm Sprinklr to store data of novel Coronavirus patients ran into rough weather. The Kerala High Court almost scrapped it before the State government itself wriggled free of the deal.

Another controversy was over the development of an app for sale of liquor in the State. The LDF government has been accused of favouring one of its supporters’ startup firm in handing over the deal to develop the app.

Besides these, the CPM government is also embroiled in a spat over selection of a site for the Sabarimala airport project.