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Old 15th September 2013, 13:02   #1
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Default City Bus maintenance costs: Some shocking numbers

Recently the Odisha govt had given out an RFP for procurement of city buses in a few towns of the state. Today I got to see the final price evaluation report of the various bids that were submitted by various manufacturers. Some of the costs quoted were extremely shocking to me.

The various costs quoted are shown below. All values are in lakh rupees.

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How is Tata able to quote maintainance cost so much lower compared to others??

In reality it seems Tata is the only one who is charging for maintenance at a resonable price. For example for a standard non-AC bus the per km AMC cost quoted by TML rises from 0.72rs in the 1st year to 2.03rs in the 5th year. But the same for ALL, starts 6.75rs per km in the 1st year and reaches 14.65rs per km in the 5th year. You can see a similar figures for the other buses as well.

Can anybody think of any reason behind the high or low AMC costs quoted??


Data Source: All the data including more can be found in various documents in the following pages.

http://www.urbanorissa.gov.in/pdf/Minutes_of_the_Meeting/Evaluation_Procurement_BPTSL.pdf
This is the evaluation report of the buses, with the various costs shown.

http://urbanorissa.gov.in/pdf/RFP_BPTSL.pdf
The is the RFP document with bus requirements, technical and otherwise.

Last edited by GTO : 16th September 2013 at 15:32. Reason: Updating dead links
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Old 15th September 2013, 14:57   #2
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Default re: City Bus maintenance costs: Some shocking numbers

The links provided are not working. Can you plz post the link once again.
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Old 15th September 2013, 15:02   #3
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Default re: City Bus maintenance costs: Some shocking numbers

Quote:
Originally Posted by Ashley2 View Post
The links provided are not working. Can you plz post the link once again.
Sorry about that. Here they are again.

http://www.urbanorissa.gov.in/pdf/Minutes_of_the_Meeting/Evaluation_Procurement_BPTSL.pdf
This is the evaluation report of the buses, with the various costs shown.

http://urbanorissa.gov.in/pdf/RFP_BPTSL.pdf
The is the RFP document with bus requirements, technical and otherwise.

Last edited by julupani : 15th September 2013 at 15:26.
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Old 15th September 2013, 16:43   #4
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Default re: City Bus maintenance costs: Some shocking numbers

High localization and scale could be part of the answer. But the prices difference quoted is very high. Maybe that's why we don't see many ashok leyland buses on the road in most cities.
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Old 15th September 2013, 16:48   #5
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Default re: City Bus maintenance costs: Some shocking numbers

It seems that initial bid was only considering bus price and later AMC is also included, to favour Tata. Since there is a vast level of difference in AMC charges between Tata and others in every category, there should be some serious difference in scope of AMC. I think without knowing the scope of supply, we cannot comment.

on a side note:
Here is a case in DTC.

For the same type buses between last tender and this tender Tata has increased their AMC charges multiple times from Rs.3.20 to Rs 75 per km. This is something strange and due to this, tender is recalled and DTC is going for global tender.

But even with global tender, I don't think any body will be willing to work with DTC.

Quote:
The earlier tender was rendered null and void after bus manufacturer Tata quoted exorbitantly high prices. "The purchasing cost quoted by Tata for an AC bus was Rs 76 lakh. The manufacturer also inflated maintenance charges multiple times to Rs 75 per km, from Rs 3.20 per km at present. Due to this, DTC will place a global tender to acquire buses for its fleet
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Old 15th September 2013, 16:58   #6
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Default re: City Bus maintenance costs: Some shocking numbers

Quote:
Originally Posted by Ashley2 View Post
It seems that initial bid was only considering bus price and later AMC is also included, to favour Tata. Since there is a vast level of difference in AMC charges between Tata and others in every category, there should be some serious difference in scope of AMC. I think without knowing the scope of supply, we cannot comment.
You can study the scope of supply and other details by reading the various requirements mentioned in the RFP document. A large number of details are mentioned in the document. Some of these may have been changed after a conference between the Govt and various manufacturers, but it will only be small in nature. For example, the inital requirement was for a front engine standard AC bus, but it seems to have been changed to Low Entry Rear engine AC bus.

For the exact reason of knowing the scope of supply, I gave a link to the original RFP document as well.

Yes the initial idea seemed to have been to chose the manufacturer who offered the bus at the cheapest price, not considering the AMC. But the kind of costs that Leyland and Volvo-Eicher have quoted for the AMC is way too high, and you cannot expect the govt to accept a bus costing a couple of lakhs less to buy while having to pay an extra 20-30lakhs extra for maintainance over the next 5 years. How can any govt official possibly justify taking the decision of not choosing the Tata here??

The AMC cost was probably not supposed to be considered since the actual cost to be payed would be against actual costs incurred depending on actual number of kilometers the buses run and other factors. So if the per km costs are a bit this way or that way it would not matter so much. The total AMC cost shown above is after only an approximate indication of maintainance costs. But obviously the govt did not anticipate such widely varying per km AMC costs.

Last edited by julupani : 15th September 2013 at 17:09.
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Old 15th September 2013, 18:01   #7
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I did study the AMC requirements in document. But I told about AMC offers given by manufacturers and that is not published. Its not absolutely necessary for manufacturer to comply to all clauses of AMC if that is not a point of consideration for identifying lowest bidder. Anyway still order is not given to Tata.
In reality also this level of vast difference is not felt by anyone, either by private customers or any STU. If so then its a big game changer for Tata.
Just as in the case of DTC, for scope of supply of AMC service if there is such a huge difference, then it should speak on rest.
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