Submitted reg databook, sor, and lmr justification ii
- 1. 1 No: AEE(C)/2014-15/1 dt.25-8-2014 SUBMITTED SUB: ADOPTION OF NEW DATABOOK , NEW SCHEDULE OF RATES AND LMR JUSTIFICATION REF: 1) Order No: 1/2010/ Fin Thiruvananthapuram dated 5-10-2010 2) B.O (FTD) No. 2033/2014 (DGC/AEE-II/Data & SoR/2014) Thiruvananthapuram dated, 25. 07. 2014 3) G.O. (P) No: 36/2013/ PWD thiruvananthapuram dated 17-4-2013 4) No: 19 (1) CE (SZ)V/ 2014/1/30 Dated: 28-7-2014 5) Order No: 2/2010/ Fin Thiruvananthapuram dated 4-01-2010 6) CPWD website : http://cpwd.gov.in/ 7) Kerala PWD website: http://www.keralapwd.gov.in/ 8) KSEB Circular FA/Tax Cell/ 2014-15 dated 08-04-2014 This is to bring to the kind attention of the KSE Board regarding the need to adopt CPWD databook, DSR multiplied by cost index of each area, and LMR (local market rate) justification and issue a B.O. for the same. It is essential to adopt these practices that are currently followed in the Kerala State Government PWD and other departments to enable smooth execution of works in the Kerala State Electricity Board Limited As per B.O cited under ref.2 above, the last two paras read as “Having examined the matter in detail, sanction is hereby accorded to adopt CPWD Data in Kerala State Electricity Board Ltd for preparation of estimates of civil works where mechanised work is not possible. Sanction is also accorded to adopt CPWD SoR and National Building Code Guidelines in Kerala State Electricity Board Ltd with prospectiveeffect. This shall be made applicable to civil and electrical works with prospective effect.”
- 2. 2 The following points may be noted: REGARDING DATA BOOK TO BE ADOPTED 1. It may be noted that CPWD Data book contains data of most of the works commonly executed and the mechanical means of execution of works is considered in the data, by including the rental value of equipments used. Therefore there is no need to adopt this databook where mechanical work is not possible, as it is wrongly assumed that the CPWD databook contains only data for works that do not use mechanical means of execution. Therefore there is no need for separate KSEB databook for mechanized works as the former takes care of these. 2. It is essential for KSEB Ltd, being a public sector company, to adopt standard codes, databook and practices followed in the State government. State government departments like the PWD have already switched over to CPWD databook. Adoption of KSEB databook in preference to CPWD databook leads to lot of confusion, legal issues and conflicts with the State government authorities such as State vigilance, Chief Technical Examiner office etc. 3. Only for those items of works that are not given in the CPWD databook, there is need to go for adopting data from KSEB databook or other observed data. KSEB databook could be revised to include only such items that are not present in the CPWD databook 4. For treating the works of hydel projects and hilly areas, there is no need to have a separate KSEB databook, because LMR (local market rate) justification provision for awarding works at higher rates is permitted by the government. REGARDING THE SCHEDULE OF RATES TO BE ADOPTED 1. The B.O. under ref.2 above directs to adopt DSR (Delhi Schedule of Rates). The practice followed in the State government departments is to multiply the DSR rates by the cost index approved by the Chief Engineer, CPWD and published in the Kerala PWD website. It may kindly be clarified and new BO issued regarding adoption of DSR multiplied by the cost index. 2. Adoption of the practice of multiplying the DSR with the cost index, that is revised quarterly, will eliminate the problem
- 3. REGARDING LMR (Local Market Rates) JUSTIFICATION If the tenderers quote above the schedule rates, more than 10%, then the practice in the State government is to go for LMR justification and awarding the works. If this practice is adopted in the KSEB Ltd. the present imbroglio of awarding works at tender excess beyond estimate would cease. There is no need to have a separate databook for hydel projects or for mechanized works. KSEB Ltd can set an additional justification limit for such works and that will take care of it. REGARDING ADDING PROVISION FOR SERVICE TAX IN WORK ESTIMATES The KSEB Ltd has to pay service tax @12.36% for the services part of the works contract. For original works 40% of total amount is taken for calculation of service tax, of which service recipient is liable to an amount of 50% of the tax. This adds to the estimated cost of the works. There is no clear directon yet whether to add this component of service tax is to be added to the estimate for the works and there is confusion and likelihood of mis-interpretation in this regard. Therefore, this aspect may be kindly clarified 3 CONCLUSION Many works recently tendered by the KSEB Ltd are not getting responses from tenderers because the estimates rates were low compared to market rates; and ther was no provision for awarding the works in excess of SOR 2012 rates. The problem would be solved by adoption of cost index and LMR justification in KSEB Ltd. If a Board Order that reads as follows, with necessary variations, is issued, it would certainly solve the confusion and enable smooth work executions. A separate clarification on service tax addition to work estimates may also be issued. “It is clarified that, in future, estimates for Civil and Electrical works in KSEB Ltd. shall be prepared based on CPWD specifications and Delhi Schedule of Rates only. In the estimate, rates for DSR items shall be worked out by multiplying DSR item rate with applicable cost index factor published by CPWD time to time. For Non DSR items, Observed Data approved by KSEB Ltd. can be used.
- 4. Tender excess above 10% over current estimate rate shall be allowed only with Local Market Rate (LMR) justification. For this, LMR justification based on LMR published by Kerala PWD Buildings Wing shall be prepared and the reasonableness of quoted rate be worked out. Generally, allowable tender excess over current estimate rate shall be limitted to the rates worked out based on LMR. For specialized works with difficult and restricted working conditions, additional justifications shall be furnished to KSEB Ltd. for considering the tender acceptance proposal in excess of LMR justified rate.” 4 Kozhikode 25 Aug 2014 Sreekumar B Asst. Executive Engineer (Civil) Transmission Circle, Kozhikode-27 Encl: documents referred above
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