Hwee SUID BETTER WORLD IWRCL Limited INTER OFFICE CORRESPONDENCE RefNo: IVRCL / PMC/ COC/PD/ ACE-132 220 KVTL-MPPTCL-TR-1082012-2013 1 Feb’ 2013 From: R.Venkataraghavan Member-COC To: Site In charge 132 and 220 KV TL MPPTCL-TR-108. Sub; Accepted Cost Estimate for CONSTRUCTION OF TRANSMISSION LINES IN BHOPAL CIRCLE ON TOTAL TURNKEY BASIS-ONE, ACE-Regarding, Please find enclosed the Accepted Cost Estimate of CONSTRUCTION OF TRANSMISSION LINES BHOPAL CIRCLE ON TOTAL TURNKEY BASIS-ONE Please exercise all possible measures to improve profitability Mast diy R.Venkataraghavan Member-COC Copy To: 1. Regional Head (P RO) 2. SiV.P. (Finance) 3. GM-MIS Dept 4. Head- Accounts Dept. 5. V.P. Purchase Department 6.PM & C Dept. H.O Page 1 of 1IWRCL Limited a ITER OFFICE CORI INDENC! Ret No: IVRGL | PMG COCIPDIACE-182 and 220 KY TL-MPPTCL TR108 2012-2919 x" « $89 Jan'2943 | From, To, > “4 ai NiVena Babu Tie. K Ashok Realy DGWE-Contradls, COC Office Executive Director SO Through: Mr.R.Venkataraghav: rector-Operations ate Sub: CONSTRUCTION OF TRANSMISSION LINES IN BHOPAL CIRCLE ON TOTAL TURNKEY BASIS-ONE.-PCA Approval Regarding. + Contract Value 5026 Cr. Wy, + Contact Duration 18 Months © Tender Margin + 8.00% \ ve ‘© Submitted PCA Margin incl. of APV. : 7.42% © ACE Margin incl. of APV 12.09% Reasons for change in margin for Submitted PCA to ACE + In the submitted PCA, the costs of Galvanised steel Supply rate as Rs. 15.79 Cr. However, we have enguired about the supply cost at Head Office Purchased Department, thereon they informed that Purchase order already issue to TLT factory. Hence, we have considered the cost of TLT for total ‘quantity and it comes to Rs. 14.48 Cr. Due to the above consideration the margin increased by 2.62% of the contract value. + In the Submitted PCA, the rates considered for other supply items are offer rates due considering a flat discount of 7% and the same has been retained in the ACE. ‘© Inthe submitted PCA, Civil and Erection works submitted are as per present market rates. Hence, in the [ACE the same has been retained. However, Reinforcement steel rates modified as per market rate as it is considered old rate, Due to the above changes the margin increased by 0.06% of contract value. B.PRICE VARIATION ‘+ As per the Contract, there is provision for price Variation for Galvanized Steel and Conductors. In Submitted Top Sheet the provision for price escalation has considered by PRO as @ 0.93%. However, wwe have Kept provision for price escalation in the top sheet @ 1.00% of contract value. Due to the above margin got decreased by 0.07% of contract value. Page 1 of 3BULBS AGETTERWORTD IVRCL Limited C. CASH FLOW & FINANCE CHARGES, ‘© Inthe Submitted PCA, the bank and finance charges considered @ 3.1% on contract value. However, ‘we have considered the bank and finance charges as per the payment terms and as per the construction schedule, With the above changes the bank and finance charges comes to 2.65% of contract value, Due to the above the profit margin increased by 0.45% of contract value. D.TAXES AND DUTIES © In PCA, they have considered the Taxes and Duties as advised by Regional finance Head and are as follows * Service Tax is considered in our quote price and in workable cost as per the LOA amount. + Value Added Tax @ 5% on Civil and Erection work considered in the submitted PCA and the same has been retained. © Labor Cess @1% considered on ACE. ‘* Other Taxes such as Central Sales Tax is included in the quoted price and the same is also considered and Erection in the Submitted PCA and the same retained in in the working cost accordingly as per present rate of taxes. Over Heads and others ‘+ Inthe Submitted PCA, the Insurance policy and W.C. Policy was considered cumulatively as Rs.15.45 Lakhs, while finalizing the ACE, we have enquired with our Head Office Insurance Department there ‘on, they have informed that for this project the insurance not yet taken. Hence, we have retained the submitted provision in the ACE. ‘+ Inthe Submitted PCA, the site Over Heads and other over heads were considered as Rs. 16.06 Lakhs. ‘And the same has been retained in the ACE. ‘+ In the Submitted PCA, The Head office and Regional office over heads considered as 1.5%. However, in the ACE we have considered @ 2%. Due to the above consideration the margin decreased by 0.59% of Contract value, ‘+ In the Submitted PCA, the provision for Non-BOQ items kept as Rs. 10.00 Lakhs and the same has retained in the ACE. Page 2 of 3neces SCO A BETTER WORT IVRCL Limited ‘This ACE is only cost budget, where-ever possible site/Div is advised to reduce the cost and exercise all efforts to further improve the margin by efficient execution and cost control methods. With these comments and observations, the overall profit margin including anticipated price escalation landed at 12,09%, This PCA details as shown in the enclosed Top Shect is put up for management decision/approval all a, N. Venu Babu, Page 3 of 3PROJECT- CONSTRUCTION OF TRANSMISSION LINES IN BHOPAL CIRCLE ON TOTAL TURNKEY | BASIS-ONE ; Bid IDENTIFICATION NUMBER : JICA/MPPTCL/TR-108 ‘TOPSHEET __Tender Submissioned Date -16.04.2012___—CP. 18 Months i. woe 220 KV TL-20 KMS & 1 2 KV 11-137 KM aa ‘OF %60F TOTAL | INCOME (Rs) SRNO. DESCRIPTION EXPENDITURE |" work |————} TOTAL Rs) Sani WORK | Sees 7 ME dle |_ VALUE 1 [WORK CONTRACT VALUE (to Quote) 502642200, 100.00 (SUPPLY OF Direct ITEMS ali a 167041776 | supe oF BOUGHT OUT ITEMS jer 193020890 [CIVIL & ERECTION L 120612147) |____|Sales Tax | | 7059727| [Service Tax