Why Did Maharashtra Cancel the Olectra Order for 5,150 E-buses?
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Synopsis
In a significant turn of events, the Maharashtra government has scrapped a major order for electric buses from Olectra Greentech, leading to a sharp decline in the company's stock price. This decision raises pressing questions about the viability of electric vehicle projects in the state. Read on to understand the implications of this cancellation.
Key Takeaways
- Maharashtra government cancels order for 5,150 e-buses from Olectra.
- Olectra's stock drops by 14 percent following the announcement.
- Only 220 buses delivered out of the expected 2,000.
- Government invested over Rs 600 crore in charging infrastructure.
- Legal action is being considered for contract termination.
Mumbai, May 27 (NationPress) The stock value of Olectra Greentech Ltd experienced a significant drop of up to 14 percent on Tuesday, reaching an intraday low of Rs 1,160 in morning trading. This decline follows the Maharashtra government's decision to annul the order for 5,150 electric buses initially placed with the company to support the state transport service.
In a statement on the social media platform X, Maharashtra Transport Minister Pratap Sarnaik expressed that the company had not delivered a single bus out of the 1,000 units expected by May 22. He indicated that officials have been instructed to cancel the tender for the 5,150 buses because of the supplier's lack of action, raising concerns about the project's feasibility.
"We had a contract with Olectra since January 2024, under which they were expected to deliver over 2,000 buses by now. We organized our operations based on this commitment to serve the public. However, they have only managed to deliver 220 buses so far," Sarnaik disclosed to NDTV Profit.
He further mentioned that the government anticipated at least 1,200 buses by May 2025, which also did not materialize. "How long are we expected to wait? We have sought legal counsel to proceed with the contract termination," Sarnaik commented.
The state government has already put in more than Rs 600 crore to develop charging infrastructure, expecting the full fleet. "It’s not that their buses are defective; we simply need the buses to cater to the populace. We can't wait indefinitely for a contractor," he added.
The minister confirmed that the government is preparing to initiate legal proceedings.
With the cancellation of the Maharashtra government contract, Olectra Greentech's order book has been reduced from over 10,000 buses to about 5,000.
Olectra has denied receiving any official termination notice; however, Sarnaik pointed out that the state government has sent multiple notifications, including three official communications from the Principal Secretary himself.
Point of View
I believe this cancellation highlights significant challenges in the electric vehicle sector, particularly regarding supplier reliability. The Maharashtra government's proactive stance demonstrates a commitment to accountability and efficiency in public transportation projects.
NationPress
08/06/2025
Frequently Asked Questions
What led to the cancellation of the Olectra order?
The Maharashtra government canceled the order due to Olectra's failure to deliver the expected number of electric buses on time.
How many buses were initially ordered?
The initial order was for 5,150 electric buses.
What impact did this cancellation have on Olectra's stock?
Olectra's stock fell by up to 14 percent, reaching an intraday low of Rs 1,160.
What amount has the Maharashtra government invested in infrastructure?
The Maharashtra government has invested over Rs 600 crore in developing charging infrastructure.
What is the future plan for the electric bus project?
The Maharashtra government is seeking legal advice to proceed with the contract cancellation and is exploring alternative suppliers.
