Cost Drivers of Electric Bus Contracts: Analysis of 33 Indian Cities

Abstract

Electric buses (e-buses) are rapidly gaining global interest for their energy efficiency and emission reduction benefits. Even though e-bus technology has leapt forward in recent years, the business models are still evolving. Insights from recent e-bus procurements can be used to understand the key factors driving their costs and to improve the efficiency of future procurements. However, there is almost no quantitative literature on e-bus contracting. This paper analyzes data from 36 e-bus contracts across 33 cities in India to identify the key variables that influence the outputs of procurement. The number of bids attracted by the tender and the cost quoted per kilometer are identified as the key outputs of a procurement exercise. Pairwise correlation analysis shows statistically significant associations of the two outputs with the following inputs: number of buses tendered, bus length, contract duration, payment for minimum assured kilometers and any additional kilometers of operation, specifying daily operational hours per bus, performance guarantee to be furnished by the operator, penalty for delay in bus delivery and time allowed for bid submission. The role of effective service planning to ensure accurate representation of operational variables in the contract is also highlighted. These variables are passed through the data envelopment analysis to derive the efficiency of the contracts for the number of bids and the cost quoted per kilometer. The relative efficiency levels between cities and the scale efficiency derived for each contract provide useful insights to improve the cost efficiency of future procurements.