Subsidized e-Rickshaws to solve Kakinada’s woes

Mon, 2017-08-28 12:35 -- SCC India Staff

e-Rickshaw
Kakinada in Andhra Pradesh is one among the first 20 shortlisted smart cities from India. The smart cities project includes both pan-city proposals and area-based development proposals, mainly focusing on improving the infrastructure of the city. The e-Rickshaw project was initiated as a part of the smart city proposal. The project is still ongoing in the second phase. This story highlights the various aspects of assessment undertaken by the project team to verify the feasibility of e-Rickshaw deployment in the city.

The need for the project
The auto rickshaws in Kakinada are a major mode of public transport. Most of these autos have two and three-stroke engines, thus contributing to increased air pollution in the city. Currently, about 1,000 cycle rickshaws are operational, with approximate 13 different stands in the city. The current income of the cycle rickshaw peddlers in the city is less than Rs 100 per week, as they hardly conduct four to five trips per week. Most of the cycle rickshaw peddlers fall in the age between 45-55 years and live in the suburban villages near Kakinada. The economic and social conditions of cycle rickshaw drivers are poor. These drivers have no means of access to formal financial options from banks. Due to the poor livelihood and lack of any other sources of income, they need to seek shelter under flyover during night time.

The city has planned to introduce cleaner options for intermediate mode of public transport. The main aim of the project is to introduce a clean source of transport, along with improvement in the livelihood of the cycle rickshaw peddlers by operationalizing e-Rickshaws.

Operational model for e-Rickshaw
e-Rickshaw’s operating model in Kakinada is unique as the individuals are the owners/operators of the vehicle and do not pay fee to the Government or any third party. The challenge of the project is that the Kakinada Municipal Corporation (KMC) has no financial involvement, so it’s important to have an operation model, which defines the role of every stakeholder involved and also prepare a financial model that provides subsidy to the beneficiaries. The project is funded by district-level banks in the form of loans to each beneficiary. The e-Rickshaw business model was thus developed based on interlinking all the players involved in the project.

The national government scheme – FAME India [Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India] – encourages hybrid and electric vehicles for better air quality in India by providing subsidy on purchase of hybrid and electric vehicles. However, none of the available e-Rickshaw models are notified to receive FAME subsidy. Since there is no national- or state-level subsidy applicable for e-Rickshaw project, the Municipal Corporation has shown interest in providing the subsidy based on the schedule caste (SC), schedule tribe (ST) and kapu caste.

As per the discussion with the SC/ST caste, district corporation’s offices, KMCcan provide a subsidy of 50 per cent on the total cost of the vehicle. The beneficiary can run the vehicle only along the provided routes to cater shorter and last mile trips. The Andhra Bank, East Godavari Division has approached the Corporation for provision of loan to the beneficiary at minimal interest rates (12 per cent on the total amount granted per individual). The e-Rickshaw business model was developed based on interlinking all the players involved in the project. The flow chart illustration explains the business model of e-Rickshaw project.

e-Rickshaw infrastructure
Charging stations are a critical infrastructure of the e-Rickshaw system. The charging station in Kakinada is proposed to be developed as a parking-cum-charging station. Although beneficiaries will be provided with a charger, which can be used through domestic power supply, the charging station is provided for the beneficiaries to charge batteries during their convenience in the off-duty hours. For establishing the charging, infrastructure will be raised by KMC by tapping into corporate social responsibility funds. KMC is responsible for allotting the locations for charging-cum-parking areas.

Learnings
KMC, with support from ICLEI South Asia, had shortlisted manufacturers for procuring e-Rickshaws in the city. The trial run and the e-Rickshaw procurement program gave an appropriate idea about the product quality. The initiation of setting up the charging station in the city has helped to develop a case study, identify the roles and responsibility of the stakeholders. The background research and case examples from various cities helped in developing a sound understanding of the performance of the e-Rickshaws considering parameters like mileage, pickup and performance.

Way forward
KMC is in the process of announcing a tender for procuring e-Rickshaws. It is recommended that the city should develop and ratify a policy/regulation on operation of e-Rickshaws in the city. The city should promote the use of e-Rickshaws as a feeder service and for shorter trips.