CHENNAI: The Centre of Indian Trade Unions (CITU) has urged the Tamil Nadu government to cancel the gross cost contract (GCC) for operating private electric buses under the Metropolitan Transport Corporation (MTC), alleging that the previous DMK government agreed to pay Rs 77 to Rs 80 per km, against Rs 36 to Rs 62 in several other states.

In a statement on Friday, K Aarumuganainar, general secretary of the Tamil Nadu State Transport Employees Federation affiliated to CITU, demanded an inquiry into the alleged irregularities in fixing the contract rates and action against those responsible.

The union said under the PM E-Drive scheme, Karnataka pays private operators Rs 37 to Rs 40 per km under the GCC model, while Maharashtra pays Rs 40 to Rs 52, Telangana Rs 36, Delhi Rs 56 to Rs 62 and Gujarat Rs 59. In contrast, the DMK government agreed to pay Rs 77 per km for ordinary electric buses and Rs 80 for air-conditioned buses in Chennai, it alleged.

CITU accused the previous government of poorly implementing the Union government's scheme and generously diverting public money to private operators. It alleged that the unusually high rates raised questions about who benefited from the agreement and demanded that the government disclose the reasons behind the higher payments.

The union also sought the cancellation of existing contracts awarded under the GCC model and the return of bus depots to state transport corporations.

Referring to the 2026-27 transport department's demand for grants, CITU said the TVK government had announced plans to operate 6,000 electric buses by 2030 under a public-private partnership and GCC model, following the approach adopted by the previous DMK government. It warned that the policy would gradually weaken state-run transport corporations by making them dependent on private operators.

Although purchasing electric buses involves substantial initial investment, operating them directly through transport corporations would reduce costs in the long run, the union said. It argued that leasing charges could exceed the cost of investing in and operating government-owned buses, diverting public funds to private companies.

CITU also flagged concerns over private operators controlling charging infrastructure, limited access to vehicle technology and technical information, battery performance issues and the transport corporations' ability to monitor and enforce contractual obligations.

The union cited Chief Minister C Joseph Vijay's assurance in the Assembly that the government would neither touch public money improperly nor spare those who did so. It urged the government to investigate the higher contract rates, make the findings public, punish those found guilty and protect the transport corporations' funds.

CITU maintained that the GCC model could undermine public transport and threaten the long-term viability of state-run transport undertakings. It demanded that the government operate electric buses directly through state transport corporations without private participation.

The union has announced a demonstration on October 27 in front of the regional headquarters of the state transport undertakings across Tamil Nadu.