The government has taken a major step to accelerate the adoption of electric vehicles (EVs) by deciding to introduce 100 electric buses into the public transport fleet and requiring government agencies to procure only fully electric vehicles for their transport pools.
Sources said the Finance Division has approved Tk 4.0 billion for the Bangladesh Road Transport Corporation (BRTC) to procure 100 electric buses. It has also directed all government entities to purchase only fully electric vehicles under both the operating (revenue) budget and development projects during the current fiscal year.
Two separate circulars issued by the Finance Division last week outlined the measures, which officials said are aimed at fulfilling the government's election pledge to reduce pollution, improve the transport system, cut carbon emissions and ensure safer transportation for passengers and freight.
The Tk 4.0 billion allocation for the BRTC will be provided as a government loan, marking the first time the state-owned transport corporation will finance bus procurement through government lending instead of development partner financing.
The BRTC has so far expanded its passenger and freight fleets mainly with loans from development partners. It is currently evaluating bids for the procurement of 340 CNG buses under financing from the Export-Import Bank of Korea (KEXIM).
Officials said the Road Transport and Highways Division submitted a proposal to the Finance Division seeking funds to procure 100 electric buses at an estimated cost of Tk 4.0 billion, as the government has prioritised the transition to energy-efficient vehicles in public transport.
The government has also adopted a policy targeting a 30 per cent penetration of electric vehicles in the country's transport sector by 2030.
Under the Finance Division's approval, the BRTC will repay the Tk 4.0 billion loan over 20 years at an interest rate of 1.0 per cent, with a two-year grace period.
"The government-funded procurement of electric buses is likely to be a first for the BRTC, which currently operates a fleet of more than 1,200 buses acquired mostly with loans from development partners," said an official familiar with the matter, requesting anonymity.
A separate circular issued on Wednesday directed government ministries and divisions, autonomous and statutory bodies, public sector corporations, state-owned companies and government-owned financial institutions to procure only fully electric road, water and air transport vehicles under both the operating (revenue) budget and development projects in the current fiscal year.
The directive covers the procurement of jeeps, cars, microbuses, buses and trucks, launches, speedboats, ferries, planes and helicopters.
It also suspended all spending on vehicle purchases, except for the replacement of vehicles that have been in service for more than 10 years and are included in the approved T&O&E (Table of Organisation and Equipment), subject to prior approval from the Finance Division.
The government has set a target to replace 25 per cent of all buses and 30 per cent of all trucks with electric alternatives.
In support of the transition, the National Board of Revenue (NBR) has granted a full exemption from customs duties and taxes on the import of electric buses and trucks until 2030, while encouraging local assembly instead of completely built-up imports. The government has also reduced the tax incidence on EV charging equipment from 39.75 per cent to zero.
Companies and institutions establishing EV charging stations across the country will enjoy a 10-year income tax exemption.
smunima@yahoo.com
