The Tamil Nadu government is preparing to issue a fresh tender for 500 electric buses after securing World Bank approval, following the cancellation of an earlier bid in March due to the absence of the Gross Cost Contract (GCC) framework. (A representative photo) | Photo Credit: KUMAR SS

The Tamil Nadu government will soon issue a fresh tender for the procurement of 500 electric buses after receiving World Bank approval three days ago, according to sources.

The earlier tender was cancelled in March after the tender committee found that the procurement model envisaged government ownership and operation of the buses, but did not incorporate the Gross Cost Contract (GCC) framework, a key requirement for the project.

Under the revised approach, the new tender will include the GCC clause and is expected to be floated within a week, sources said.

GCC model to shift operations to private players, cut costs

While an electric bus typically costs around ₹1.4 crore, the GCC model shifts the responsibility of providing buses, drivers, maintenance and operations to private operators. State transport undertakings will continue to deploy conductors on the buses. Under the GCC model, the contract spans 12 years, sources said.

The move is expected to help transport corporations reduce operating costs while accelerating the adoption of electric mobility in public transport.

Tamil Nadu already has over 600 electric buses supplied by Switch Mobility, part of the Hinduja Group, in operation across various transport undertakings. Another 500 buses are in the pipeline.

Ganesh Mani, CEO of Switch Mobility, had earlier told businessline that State transport undertakings have reported savings of up to 30 per cent in operating costs compared with running diesel buses on their own, highlighting the economic benefits of the electric bus programme.

The tender is expected to revive Tamil Nadu’s plans to expand its electric bus fleet and support the State’s transition towards cleaner, more sustainable public transportation, sources said.

Published on June 24, 2026