RECEIPT, ERECTION & COMMISSIONING

 GENERAL EVERY PLANT AND MACHINERY IS A

PART OF A CONSOLIDATED PLAN IN DIFFERENT
APPLICATION AREAS. ERECTION AND
COMMISSIONING OF PLANT AND MACHINERY
FOLLOWS A COORDINATED WORK PLAN, FRAMED
EARLIER AND PUT INTO ACTION WITH THE RECEIPT
OF EQUIPMENT.
 RECEIPT OF MACHINES: MACHINES ARE EITHER
RECEIVED THROUGH RAIL OR ROAD, AS PER
CONTRACTUAL CONDITIONS. THEY MAY HAVE BEEN
TRANSSHIPPED FROM THE PORT OR SUPPLIERS
WORKS. INEXCEPTIONAL CICUMSTANCES DUE TO
URGENCY THESE MAY BE AIR LIFTED.
 ON RECEIPT OF MACHINES, THE PACKAGE CAN BE
OPENED IF NO OUTWARD DAMAGE IS OBSERVED.
1
 E&C-2

DEPENDING UPON CONTRACTUAL CONDITION WITH

TRANSPORTER THEY ALSO BE INFORMED TO
WITNESS THE OPENING . IT IS GOOD PRACTICE
THEREFORE THAT INFORMATION ON OPENING
SCHEDULE, FOR COSTLY MACHINES, IS GIVEN TO
SUPPLIERS.
 IN CASE OF RAILWAYS, WITH CLEAR RR, OPEN
DELIVERY MAY BE ASKED FOR IF THE PACKAGE IS
DAMAGED OUTWARDLY.
 THE CONTENTS OF THE PACKAGE SHOULD BE
TELLIED WITH THE PACKING SLIP/PACKING
NOTE/COPY OF INVOICE WITH THE PACKAGE.
PACKING NOTE/INVOICE SHOULD CONTAIN THE
COST OF INDIVIDUAL ITEMS IN THE PACKAGE,FOR
CLAIMING RECOVERY IF ANY OF IT IS FOUND LOST 2
 E&C-3

OR DAMAGED. A JOINT STATEMENT IS MADE IN

CASE ANY DAMAGED IS OBSERVED WITH THE
CARRIER’S REPRESENTATIVES AND WITH THE
INSURANCE REPRESENTATIVES. ON MAKING A JOINT
SIGNED STATEMENT CLAIM IS LODGED WITH
RAILWAY/INSURANCE AGENCIES/CARRIER. THE FIRM
MAY PURSUE THE MATTER WITH CARRIER
AGENCIES TO RECOVER THE LOSS.THEREFORE THE
SUPPLIER IS OFTEN CONTRACTED TO EFFECT DOOR
DELIVERY AT THE FACTORY.

3
 E& C-4

 ERECTION:
 BATTERY LIMITS: THE TECHNICAL SPECIFICATION
TO THE TENDER SHOULD SPECIFY THE SUPPLY OF
SERVICES AT REQUIRED POINTS.THE QUALITY OF
WATER, STEAM AND AIR, PRESSURE AND VOLUME
REQUIRED BY THE MACHINE WILL HAVE TO BE
SPECIFIED BY THE SUPPLIER. THE POINTS AT,WHICH
SUCH OF THE SERVICES ARE REQUIRED, ARE
GENERALLY PRE-DECIDED AND THE SUPPLIER IS
GENERALLY ADVISED TO FURNISH THESE DETAILS,
KNOWN AS BATTERY LIMITS, IN ADVANCE OF THE
ACTUAL DELIVERY OF THE EQUIPMENT. THE
PURCHASER HAS TO LAY THE NECESSARY POWER
AND SERVICES NETWORK IN ADVANCE,TO BE IN
READINESS, SO AS TO ADHERE TO THE TIME FRAME
4
 E & C-5

REQUIRED FOR ERECTION AND COMMISSIOINING.

SOME OF THE IMPORTANT ASPECTS OF SERVICES
AND UTILITIES ARE:
CIVIL WORKS
GENERAL-PURPOSE MACHINE TOOLS ARE
GENERALLY GROUTED ON SHOP FLOORS
CONSTRUCTED TO BEAR THE WORKING LOAD OF
THE MACHINE. THEY ARE GROUTED ITH THE HELP
OF ANCHOR BOLTS. FOR SPECIAL PURPOSE AND
HEAVY DUTY PLANT & MACHINERY LIKE PRESSES,
HIGH SPEED BLOWERS, COMPRESSORS AND
MACHINES REQUIRING VIBRATION FREE
FOUNDATION SPECIAL FOUNDATION ARE
NECESSARY. THE FOUNDATION SHOULD NOT ONLY
BEAR THE WORKING LOAD, BUT DAMPEN THE
VIBRATION BEING TRANSMITTED TO NEARBY 5
 E & c-6

MACHINES, WITHOUT AFFECTING THE RIGIDITY OF

ITS OWN SUPPORT. THE SUPPLIERS ARE REQUIRED
TO FURNISH FOUNDATION DIAGRAM THAT WILL
MEET THEIR DESIGN OPERATION CONDITIONS. THE
REQUIREMENT SHOULD BE A PART OF THE
CONTRACT.TO ENABLE DESIGNING THE
FOUNDATION REQUIRED, SOIL TEST REPORTS AT
VARIOUS DEPTHS SHOULD BE KEPT READY TO BE
FURNISHED TO THE SUPPLIER. WITH THE
ESTIMATED DESIGN LOAD, THE SUPPLIER SHOULD
BE ABLE TO MAKE A SAFE DESIGN OF THE
FOUNDATION DETAILS, AND FURRNISH IT TO THE
PURCHASER AS PER THE AGREED SCHEDULE.
IN AIR CONDITIONING PLANTS,ENOUGH
HEADSPACE IS TO BE LEFT EVEN AFTER LAYING
THE DUCTING. THE TRAVERSES AROUND THE
EXPLOSIVE BLDG. 6
 E & C-7

DO NOT PERMIT CUTTINGS LATER TO LAY PIPING. IT

IS GOOD PRACTICE THERFORE TO INSERT HOLLOW
PIPES TO LEAVE AN OPENING FOR THE PURPOSE.
POWER SUPPLY
THE TYPE OF LOAD AND DIVERSITY ARE IMPORTANT
IN DESIGNING ELECTRICALSYYSTEM, PANEL
BOARDS. EQUIPMENT WITH HEAVY ELECTRICAL
LOAD AT THE END OF THE BUS SHOULD IN GENRAL
BE AVOIDED. OVERHEAD OR UNDERGROUND
POWER DISTRIBUTION SHOULD BE DECIDED IN
ADVANCE.
CNC MACHINES ARE TO BE CONNECTED TO PANELS
WITH STEADY POWER REQUIREMENT AND
PREFERABLY WITH SEPARATE EARTHING TO
PREVENT DATA CORRUPTION.
7
 E&C8

 WATER
 SUFFICIENT WATER TO BE PROVIDED BY THE
PURCHASER TO CONTRACTOR FOR ERECTION AND
COMMISIONING PURPOSE.
 STEAM
IT SHOULD PROVIDE FOR THE PEAK LOADS. THE
PIPING SIZE SHOULD LIMIT PRESSURE DROPS,
STEAM LINES SHOULD HAVE GOOD SLOPES,
LAGGING, STEAM TRAPS AND TO THE EXTENT
POSSIBLE LOW PRESSURE PIPING(OUTSIDE IBR)
WITHIN THE BUILDING. THE ROAD CROSSING
SHOULD HAVE ENOUGH CLEARANCE.
AIR CONDITIONING : SINCE THE BUILDINGS HAVE
FALSE CEILINGS, THE EQUPMENT WILL HAVE TO BE
ERECTED BEFORE THE ROOFING IS DONE.
8
 E & C-9

 COMPRESSED AIR
 IT SHOULD BE FREE OF MOISTURE,OIL AND
OF ADEQUATE PRESSURE. THE AIR FILTERS
SHOULD BE HOUSED CLOSED TO THE
EQUIPMENT. SEPARATE LAYOUT SHOULD BE
MADE FOR HIGH PRESSURE DUTY AND LOW
PRESSURE LINES.
 FUEL OIL
 IT IS OFTEN NECESSARY TO STORE ENOUGH
OIL TO RUN BOILERS AND HEATING
FURNACES WITHOUT INTERUPTIONS. THEY
ARE TO BE STORED IN CONDITIONS
RECOMMENDED BY THE OIL CO. ADEQUATE
FIRE FIGHTING FACILITIES ARE TO BE
PROVIDED.BULK STORAGE SHOULD FOLLOW
SAFETY REGULATIONS, ESPECIALLY IN 9
 E & C-10

 MISCELLANEOUS
 IN CASE INSTRUMENTATION, CABLES AND PIPING
REQUIRE A SEPARATE STRUCTURE, IT SHOULD
ALSO BE DECIDED IN CONSULTATION WITH
SUPPLIER.
 SAFETY AND POLLUTION CONTROL REQUIREMENT,
DRAIN PITS, AND SOMETIMES COOLING TOWERS
FOR COOLANT, LOCAL WATER TREATMENT AND
REFRIGERANT SYSTEM ETC ARE REQUIRED TO BE
SET UP FOR THE MACHINE EXCLUSIVELY.
 RESPONSIBILITY OF ERECTION
 UNLESS OTHERWISE SPECIFIED, THE PURCHASER’S
LIABILITY IS TO THE EXTENT OF SUPPLY OF
LABOUR, TOOLS AND TACKELS AS MUTUALLY
AGREED. THE ERECTION IS DONE UNDER
10
 E & C 11

THE SUPERVISION OF SUPPLIER AND HE REMAINS

RESPONSIBLE FOR SATISFACTORY ERECTION.
THE WIRING AND PIPING WILL BE LABELLED AND
IDENTIFIED BY THE SUPPLIER TO FACILITATE EASY
IDENTIFICATION DURING ERECTION.
OBLIGATIONS OF PURCHASER
THE PURCHASER HAS TO OFFER THE FOLLOWING
FACILITIES FOR ERECTION AND COMMISSIONING OF
THE EQUIPMENT:
(i)TO PROVIDE SUITABLE STORAGE SPACE TO
ALLSUPPLIES MADE BY THE SUPPLIER. IF THE
SUPPLIER HAS EFFECTED THE SUPPLIES AS LAID
DOWN IN THE CONRACT, THE TITLE PASSES ON TO
THE CONSIGNEE AND THE PURCHASER, IN HIS
OWN INTEREST MUST PROVIDE PROPER STORAGE.
11
 E & C-12

(ii) SUPPLY DIFFERENT UTILITIES FREE OF COST TO

THE SUPPLIER.
(iii) WORK AREA SHOULD BE ILLUMINATED.
(iv) PROVIDE LODGING, ON CHARGEABLE BASIS, TO
THE SUPPLIER’S ENGINEERS FOR SUPERVISION OF
ERECTION AND COMMISSIONING.
(v) SECURITY OF MATERIAL IF WITHIN THE FACTORY
PREMISES.
(vi) CONSTRUCTION OF VARIOUS FOUNDATIONS AS
PER SUPPLIER’S DRAWINGS.
(vii) FIRST AID,EMERGENCY MEDICAL ATTENTION IF
REQUIRED.

12
 E & C-13

TO PROVIDE ACCESS FOR SUPPLIER’S MATERIAL

HANDLING EQUIPMENT AND TRANSPORT FOR
EQUIPMENT.
(ix) ALLOW THE SUPPLIER’S PERSONNEL TO ENTER
THE FACTORY AND WORK AT THE SITE OF
ERECTION AND COMMISSIONING AS PER THE
SECURITY NORMS.
(x) SUPPLY SKILLED WORKMEN, AS AVAILABLE AND
AGREED TO, WITH TOOLS AND TACKELS FOR
ERECTION AND COMMISSIONING TRIALS.
OBLIGATION OF SUPPLIER
AS CONTRACTUAL OBLIGATION, THE SUPPLIER HAS
TO TENDER THE FOLLOWING SERVICES.
(i) FIRM WILL DETAIL COMPETENT PERSONS TO
13
 E&C-14

 IDENTIFY SUPPLIES AND ADVISE AND OVERSEE

THE ERECTION WORK BEING UNDERTAKEN BY THE
PURCHASER. THEY SHOULD ALSO CONFIRM
SATISFACTORY COMPLETION.
(ii) THEY WILL MAKE AVAILABLE
CONSUMABLES,COMMISSIONING SPARES,
PERISHABLE FOR TRIAL RUNS, SPECIAL TOOLS
AND TACKLES ETC AS AND WHEN NECESSARY TO
FACILITATE UNIMPEDED PROGRESS OF ERECTION
AND COMMISSIONING.
(iii) THE FIRM WILL BE LIABLE FOR THE CONDUCT OF
ITS PERSONNEL, AND SHOULD DEPLOY THOSE
WHO HAVE NOT PARTICIPATED IN ANTI-NATIONAL
ACTIVITIES.
(IV) CONTRACTOR’S PERSONNEL SHALL ABIDE BY
THE NORMS OF SECURITY.
14
 E & C-15

(v) ARRANGE CLEARANCE FROM STATUTORY BODIES

LIKE POLLUTION CONTROL BOARDS, ELECTRICITY
DEPARTMENTS, EXPLOSIVE CONTROLLERS ETC.
(VI) TRAIN PURCHASER’S PERSONNEL TO A
REASONABLE COMPETENCE IN HANDLING,
OPERATING AND MAINTAINING THE EQUIPMENT.
(vii) CONTRACTOR’S PERSONNEL SHALL ABIDE BY THE
NORMS OF SECURITY OF THE FACTORY,
CONTRACTOR WILL BE LIABLE TO OBTAIN THEIR
PVR CLEARED IF SO REQUIRED.
(viii) NOTWITHSTANDING STAGEWISE INSPECTIONS
BEING DONE BY THE PURCHASER’S
REPRESENTATIVE, IT SHALL NOT RELIEV THE
CONTRACTOR FROM HIS OBLIGATIONS OF
SATISFACTORY ERECTION AND PERFORMANCE
TRIALS OR WARRANTY AND GUARANTEE.
15
 E & c -16

 MAINTENANCE OF DAILY LOG BOOK:

 A RECORD OF DAILY/WEEKLY
PROGRESS,SCHEDULE OF
ERECTION,PLANNING ETC. WILL HAVE TO BE
MAINTAINED AND SIGNED BY SUPPLIER’S
AND PURCHASER’S REPRESENTATIVES
DAILY. THE AUTHORITY TO SIGN DAILY LOG
BOOK.ANY EXCESS MATERIAL SUPPLIED,
REMAIN UNUSED AFTER DUE ERECTION AND
COMMISSIOINING AND DO NOT FORM A
PART OF SUPPLIES UNDER THE SUPPLY
CONTRACT, REMAIN AS SUPPLIER’S
PROPERTY AND SHOULD BE REMOVED
WITHIN 3 MONTHS FROM THE FACTORY
PREMISES.
16
 E & C-17

 COMMISSIONING:
 BEFORE UNDERTAKING COMMISSIONING, THE
PURCHASER SHOULD GET SATISFIED THAT THE
ERECTION IS COMPLETE.
 COMMISSIONING OF THE EQUIPMENT WILL BE
CARRIED OUT IMMEDIATELY AFTER ERECTION .IT IS
THE SUPPLIER’S RESPONSIBILITY TO
SATISFACTORILY PROVE TO THE PURCHASER, THE
CONFORMANCE TO THE PERFORMANCE
PARAMETERS OF THE PLANT DELIVERED.ON
SATISFACTION BY THE PURCHASER THAT THE
EQUIPMENT HAS BEEN COMPLETELY SUPPLIED AND
CONFIRMED BY THE SUPPLIER THAT THEY HAVE
BEEN PROPERLY ERECTED ,IT IS FIT TO BE
OPERATED/TAKEN OVER BY THE PURCHASER.

17
 E & C-18

 UNLESS OTHERWISE AGREED, THE SUPPLIER

REMAINS RESPONSIBLE FOR SUPPLY OF THE
EQUIPMENT WITH THE FIRST FILL OF
LUBRICANTS,OILS,REFRIGERANTS, COOLANTS
ETC.ETC WHICH HOWEVER SHOULD BE
MENTIONED IN THE GENERAL CONDITION OF
TENDER.
 THE PURCHASER SHOULD SUPPLY SERVICES FOR
OPERATING THE MACHINE AS A PART OF THEIR
OWN OBLIGATIONS. THE PURCHASER WILL SUPPLY
CONSUMABLES, DURING OPERATION OF THE
PLANT, FREE OF COST. ALL RAW MATERIAL AND
SERVICES SHOULD BE STICKLY TO THE
SPECIFICATIONS TO AVOID CONTROVERSY IN
RUNNING THE PLANT OR IN OBTAINING THE 18
 E & C-19

 OUTPUTS TO THE ASSURED QUALITY,CAPACITY,

PRODUCTION CYCLE AND UTILITIES CONSUMPTION.
 THE COMMISSIONING WILL INCLUDE :
 BOTH SUPPLIER AND PURCHASER GET SATISFIED
THAT THE ERECTION IS COMPLETE. IT COULD BE A
JOINT INSPECTION WITH THE SUPPLIER.
 CHECK ALL ALLIGNMENTS OF THE EQUIPMENT.
 MAKE SURE THAT NO FOREIGN MATERIALS IN THE
VESSELS,PUMPS ETC.ERECTION MATERIALS LIKE
WELDING ROD STUBS MAY REMAIN IN THE
EQUIPMENT.
 CLEAN THE HYDRAULIC TANK WITH CLOTH OR
OTHER SUITABLE MATERIAL BEFORE THE OILS ARE
FILLED.
19
 E & C-20

 MEGGER UP MOTORS FOR INSULATIONBEFORE

STARTING TO ENSURE THERE IS NO
DETERIORATION IN STORAGE.
 FILL ALL GEAR BOXES WITH INITIAL FILL. ALSO
GREASE ALL THE BEARINGS AND SLIDING
SURFACES.
 RUN THE MACHINE DRY.WATCH THE UNUSAL
SOUNDS, VIBRATIONS, HEATING AND OTHER
UNUSUAL OCCURRENCES. RECTIFY IF NECESSARY
AND RUN AGAIN TO SATISFACTION.
 SET CONTROLS OF
PRESSURE,TEMPERATURES,LEVELS AND OTHER
PARAMETERS.
 RUN THE PLANT IDLE WITHOUT ACTUAL RAW
MATERIALS TOENSURE THAT THE INDIVIDUAL 20
 E & C-21

 EQUIPMENTS ARE RUNNING ON LOAD WITHOUT

ANY UNUSUAL PHENOMINA.
 ENSURE THE TEST FACILITIES ARE AVAILABLE TO
TEST THE RAW MATERIALS AS WELL AS
INTERMEDIATES AND FINAL PRODUCTS.
 THE PLANT IS NOW READY FOR RUN WITH ACTUAL
MATERIALS AND COMPONENTS. AT THIS STAGE A
PROTOCOL MAY BE NEEDED THAT THE PLANT IS
ERECTED TO THE SATISFACTION, PRELIMNARY
RUNS TAKEN AND THE PLANT IS RUNNING NORMAL
TO TAKE THE PROCESSING MATERIAL IN TO THE
PLANT.
 TRIAL RUNTHE PLANT IS RUN INITIALLY TO ADJUST
ALL PARAMETERS OF OPERATION. WHEN THE
21
 E & C-22

 OPERATING CONDITIONS ARE ADJUSTED THE PLANT

IS RUN CONTINUOUSLY FOR A PERIOD MUTUALLY
AGREED TO, IN THE STEADY CONDITION OF THE
PLANT.THE OPERATOR ALSO GET A KNOWLEDGE OF
THE PLANT DURING THIS PERIOD.
 GUARANTEE RUN:
 AFTER A TRIAL RUN, THE PLANT IS RUN FOR THE
PLANT SUPPLIER TO DEMONSTRATE THE PRODUCT,
ITS QUALITY,CAPACITY AND CONSUMPTION OF RAW
MATERIALS AND UTILITIES. IF THESE ARE
SATISFACTORY THE SUPPLIER CAN OFFER TO RUN
THE PLANT FOR GUARANTEE RUN. ALL THESE
PERIODS OF RUNS WILL HAVE TO BE AGREED IN
ADVANCE TAKING INTO ACCOUNT THE AMOUNT OF
22
 E & C-23

 RAW MATERIALS REQUIRED TO BE PROVIDED AND

ITS COST,UTILISATION OF THE PRODUCT
PRODUCED.
 ONCE THE GUARANTEE RUN IS TAKEN, THE
RESULTS ARE TABULATED TO COMPAREE THE
RESULTS WITH THE ASSURED FIGURES AS PER THE
SUPPLY ORDER FOR TAKING OVER THE PLANT.
TRAINING OF PERSONNEL CAN BE UNDERTAKEN.
 IT IS ESSENTIAL THAT ALL THE SET PARAMETERS
AND SETTING ARE RECORDED FOR FUTURE
REFERENCE.IF SUCH RECORDS ARE NOT
MAINTAINED ,WHEN A PLANT OPENED FOR
MAINTENANCE IT WOULD BE TIME CONSUMING TO
GET TO THE ORIGINAL PARAMETERS AND
OPERATING CONDITIONS. 23
 E & C-24

 THE FINAL ACCEPTANCE TESTS, WILL ALSO

INCLUDE ACCURACY TESTS,GENERALLY MEASURED
IN TERMS OF PROCESS CAPACITY RATIO. MATERIAL
CAN BE REJECTED ,IF MATERIAL NOT FULFIL THE
FINAL ACCAEPTANCE TEST.
 RECTIFICATION BY VENDER:
 IN THE EVENT OF THE PERFORMANCE FIGURES
FALLING SHORT BY MORE THAN 1% IN ANY OF
CONTRACTED STIPULATIONS, THE CONTRACTOR
SHALL AT HIS OWN COST AND EXPENDITURE
CARRY OUT
RECTIFICATION,MODIFICATION,REPLACEMENT AND
EFFECT ADDITIONAL SUPPLIES TO ACHIEVE THE
GURANTEED PERFORMANCE.SUBSEQUENTLY
SECOND GUARANTEE RUN WILL BE CARRIED OUT
FOR OVER A MONTH TO ACHIEVE THE
CONTRACTUAL FIGURES. 24
 E & C-25

 THE EQUIPMENT WILL BE CERTIFIED TO HAVE BEEN

COMMISSIONED IF IT HAS SATISFACTORILY
COMPILED WITH THE PRESCRIBED PERFORMANCE
STANDARDS.
 THE SUPPLIER REMAINS RESPONSIBLE TO SUPPLY
FREE OF COST,ALL COMPONENTS, PARTS ETC.
DAMAGED/BROKEN DURING THE ERECTION AND
COMMISSIONING OF THE EQUIPMENT DONE UNDER
OVERALL SUPERVISION OF THE SUPPLIER’S
REPRESENTATIVE. THE REPLACEMENT WILL BE
CARRIED OUT AT SITE .
 IN CASE THE FALL IN CAPACITY AND PERFORMANCE
FIGURES BE ABOVE 10% THE PURCHASER WILL
HAVE THE RIGHT TO REJECT THE PLANT AND
PURCHASE IT ALTERNATIVELY AT THE RISK AND
COST OF SUPPLIER.ACTION FOR RISK PURCHASE
25
 E & C-26

 ACTION SHOULD BE TAKEN WITHIN SPECIFIED TIME

LIMIT OF BREACH OF CONTRACT.
 Engagement of foreigners for erection and
commissioning:
 IN COURSE OF ERECTION & COMMISSIONING OF
PLANT AND MACHINERY, IT BECOMES
CONTRACTUALLY OBLIGATOY TO INVITE FOREIGN
NATIONALS THE PROPOSAL TO ENGAGE
FOREIGNERS INSIDE THE ORDNANCE FACTORY
PREMISES IN GUIDED FURTHER BY SECURITY
CONSIDERATIONS,FOR WHICH PERMISSION OF
OFB/MOD IS REQUIRED.
 THE DETAILED PROCEEDURE FOR PERMISSIONS TO
FOREIGN NATIONALS HAVE BEEN OUTLINED IN MHA
26
 E & C-27

OM NO.25022/58/90/F1DT.29.5.90
 FOR DEFENCE CONTRACTS DURATION SHORTER
THAN THREE MONTHS HAS BEEN DELEGATED TO
MEMBER,OFB. MEMBERS OF OFB MAY ACCORD
PERMISSION FOR VISITS BY FOREIGN NATIONALS
TO NON-STRATEGIC AREAS IN THE FACTORIES,IN
CONNECTION WITH EXPORT EFFORTS.

27
 E& C-28

 FAILURE TO COMMISSION THE MACHINES

 NO MACHINE OR EQUIPMENT SHOULD BE
ACCEPTED UNLESS PERFORMANCE TESTS AND
ACCEPTANCE TESTS ARE CONDUCTED AND
MACHINES SATISFY THESE TESTS. IN CASE, ANY
EQUIPMENT OR PLANT & MACHINERY FAILS THESE
TESTS THE GM MAY KINDLY USE THEIR DISCRETION
AND IF THE FAILURE IS TO A MAJOR EXTENT, THE P
& M SHOULD BE REJECTED AND REJECTION
COMMUNICATED TO ALL CONCERNED.

28
 PROJECT PLANNING

 GENERAL:
 PROJECT PLANNING AND EXECUTION ARE VITAL
FUNCTIONS OF OFB. THEY ARE INTENDED TO
CREAT OR ARGUMENT PRODUCTION
CAPACILITIES OF THE ORGANISATION
 SCOPE OF PROJECT:
 THE PROJECT FALL UNDER THREE CATAGORIES:
(v) AUGMENTATION OF EXISTING CAPACITIES FOR
ARMS,AMMUNITION AND OTHER STORES.
(vi) MAJOR REHABITATION SCHEMES OF EXISTING
PLANT AND MACHINERY/OTHER FACILITIES.
(vii) SETTING UP CAPACITIES FOR NEW STORES.
IT MAY ALSO REQUIRE SETTING UP OF A
FACTORY AT GREEN –FIELD SITE.
29
 P-P-2

THE BROAD ACTIVITIES INVOLVED IN A PROJECT ARE:

(ii) PREPARATION OF FEASIBILITY
REPORT(INCLUDING RAPID ENVOIRONMENT
IMPACT ASSESMENT STUDY AND APPROVAL IN
PRINCIPLE OF STATE AUTHORITIES INCLUDING
SEB’S, PCB FOR SUPPLY OF ELECTRICITY,WATER)
AND OBTAINING APPROVAL OF MOD.
OFB HAS ISSUED INSTRUCTION THAT THE POWER
SUPPLY AUTHORITIES NORMALLY STIPULATES A
MINIMUM GUARANTEE PAYMENT AND TARRIF
BASED ON MINIMUM DAILY DEMAND(USUALLY
75% OF THE CONTRACT DEMAND)AND PROVIDE
A SAFE GUARD FOR REASONABLE RETURN TO
THE SUPPLYAUTHORITIES REGARDING THE
EXPENSES INCURRED BY THEM IN ARRANGING
SUPPLY TO THE FACTORIES. THEREFORE, THE
CONCERNED GMS / PROJECT OFFICERS MUST
EXERCISE UTMOST CARE
30
 PP-3

TO MAKE REALISTIC ASSESMENT OF THE LOAD

REQUIREMENT AFTER TAKING INTO ACCOUNT ALL
RELEVANT FACTORSI.E. TIME FOR PROCUREMENT
OF PLANT AND MACHINERY,PROGRESS OF CIVIL
WORKS INCLUDING ACCOMODATION AND
FOUNDATION, NECESSITY OF SERVICES,
PROSPECTS OF TRAINED MAN POWER AND RAW
MATERIALS ETC. TO ARRIVE AT THE PEAK
DEMAND TO BE ATTAINED IN A PHASED MANNER.
(ii) PREPARATION OF PRELIMINARY PROJECT REPORT
(iii)PREPARATION OF DETAILED PROJECT REPORTS
AND OBTAINING PROJECT SANCTION.
DPR SHALL INCLUDE;
(e) DETAILED PROCESS LAY OUT FOR EACH ITEM OF
STORE.
(b) FINALISATION OF LIST OF PLANT AND MACHINERY
WITH ESTIMATED COST AND PROCUREMENT
THEREOF 31
 PP-4

© PREPARATION OF LAYOUT OF SHOPS AND

OTHER WORKS REQUIRED AND EXECUTUION OF
THE SAME.
(iv) PROJECT PLANNING REGARDING OTHER MATTERS
RELATED TO PROJECT ESTABLISHMENT I.E.
SANCTION FOR STAFF AND
OFFERS,BUDGET,SUBMISSION OF PERIODICAL
RETURNS, PROCUREMENT OF RAW MATERIALS,
ANSWERING AUDIT QUERIES.

PREPARATION OF DETAILED PROJECT REPORT:

(DPR)
THE DETAILED PROJECT REPORT SPELLS OUT IN
DETAIL CAPACITY PLANNED, THE REQUIREMENT OF
P&M AND CIVIL WORKS REQUIRED FOR EXECUTION
OF THE PROJECT. IT AMPIFIES THE PROJECTION
MADE IN (PRELIMINARY PROJECT REPORT) AND
FEASIBILITY REPORT. IT LISTS OUT THE 32
REQUIREMENT OF OUTLAYS IN REVENUE
 PP-5

AND EXTERNAL ASSISTANCE IF ANY. IT MAY ASLO

CONTAIN
REQUIREMENT FOR ENGAGEMENT OF CONSULTANT
ETC. IT CONTAINS PROJ ECT REQUIREMENT OF
MAN POWER AND
JUSTIFICATION FOR SERVICES, ENERGY AND WATER
REQUIREMENTS, NEED FOR INFRASTRUCTURAL
REQUIREMENTS ETC.
 IN ORDER TO MAKE DPRs UNIFORM,OFB
REQUIRES THE FOLLOWING FORMAT TO
COMPLIED WITH IN GENERAL:-
 INTRODUCTION:
(vi) BACKGROUND LEADING TO SETTING UP OF
CAPACITY INDICATING:
(vii) VETTED CAPACITY REQUIREMENT FROM MINISTRY
33
OF DEFENCE
 PP-6

(i) JUSTIFICATION FOR THE PROJECT WITH

REFERENCE TO THE REQUIREMENT
(ii) THE BASIS OF WHICH THE CAPACITY
PARAMETERS HAVE BEEN WORKED OUT
(iii) (A) TECHNICAL FEASIBILITY FOR SETTING UP
SUCH FACILITY EXPLAINING THE TECHNOLOGIES
INVOLVED AND OUR COMPETENCE THEROF (b)
ECONOMICS OF THE PROPOSAL BASED ON
ESTIMATED COST OF PRODUCTION AT PEAK
CAPACITY AND IF THE PRODUCTION IS BASED ON
STRATEGIC REQUIREMENT,IT MAY ALSO BE SPELT
OUT AND © COLLABORATION IF REQUIRED AND
THE EXTENT OF COLLABORATION REQUIRED.

34
 PP-7

(B) SUMMARY OF PROJECT PROPOSALS AND

COST THEREOF:
(ii) CAPACITY PARAMETERS DETAILING MONTHLY
AND ANNUAL CAPACITIES AND THE NUMBER OF
SHIFTS PROPOSED PER DAY;
(iii) FINANCIAL HIGHLIGHTS-COST OF
PRODUCTION,IRR,PAY BACK PERIOD
(iv) SUMMARY OF COST UNDER VARIOUS HEADS OF
ACCOUNTS I.E P&M, CIVIL
WORKS,SERVICES,RAILWAY WORKS, LAND
ACQUISITION ETC.
(v) SUMMARY OF DEFERRED REVENUE TO COVER
PLANNING,TRAINING PRELIMINARY EXPENSES,
REQUIREMENT OF INTERSTATE COMPONENTS
FOR PROVING THE MACHINE DURING TRIAL
RUNS. ETC. 35
 PP-8

( C) ASSUMPTION MADE DURING FORMULATING

THE PROJECT TO BE LISTED AS FOLLOWS:
(i) EXISTING CAPACITIES,IF ANY,ASSUMED FOR
ARRIVING AT THE NET REQUIREMENT S OF CAPITAL
ASSESTS;
(ii) ASSESMENT OF THE RELIABILITY OF THE COST
ESTIMATE DEPENDING UPON THE PROJECT
SANCTION TIME FRAME AND THE DATE OF GOVT.
SANCTION.
(iii) REQUIREMENT OF RAW MATERIAL THROUGH
IMPORT AND ITS EXTENT AND
(iv) AVAILABILITY OF INDIGENOUS RAW MATERIAL
(D) LOCATION OF THE PROJECT WILL REQUIRE TO
BE JUSTIFIED IN THE REPORT AS FOLLOWS:
(i) BASIS OF CHOICE OF LOCATION EXPLAINING
AVAILABILITY OF SKILLED MANPOWER,
AVAILABILITY OF EXISTING CAPACITY, PROXIMITY 36
OF RAW MATERIAL, WATER AND POWER ETC.
 PP-9

(ii) IF THE PROJECT IS PROPOSED TO BE LOCATED IN

AN EXISTING FACTORY A SCHEMATIC LAYOUT
SHOULD BE ENCLOSED TO SHOW MOVEMENT OF
MATERIAL FROM ONE FACTORY TO ANOTHER.IT
WILL GIVE DISTRIBUTION OF WORK LOAD
FACTORYWISE.
(E) THE EXTENT OF CIVIL WORKS REQUIRED WILL
HAVE TO BE ENUMERATED AND EXPLAINED IN THE
FOLLOWING SUBHEADS:
(i) THE CIVIL WORKS REQUIREMENT FOR
PRODUCTION BUILDINGS DEPENDING UPON THE
PLINTH AREA REQUIREMENTS, FOUNDATION FOR
PLANT AND MACHINERY AND TYPE OF STRUCTURE
WILL HAVE TO BE CONTAINED . THE DPR SHOULD
ALSO GIVE A LIST OF PLANT AND MACHINERY WITH
ASSOCIATED FACILITIES TO JUSTIFY THE PLINTH
AREA REQUIREMENTS. 37
 PP-10

(i) CIVIL WORK OF NON PRODUCTIONBUILDINGS,

CONSISTING OF STORES, BOTH MAIN AND
INTERSTAGE STORES,INSPECTION.
INSPECTORATES AND MAINTENANCE BUILDINGS
ETC HAS TO BE CONTAINED IN THE DPR. THE
MAIN OFFICE AREA, ON THE AUTHORISED
SCALES, SHOULD BE ALSO CONTAINED IN THE
DPR. THE REQUIREMENT OF SITE OFFICE ALSO
SHOULD BE INCLUDED.
(ii) CIVIL WORKS REQUIRED FOR RESIDENTIAL BLDS.
TO COVER THE REQUIREMENTS OF ALLIED
ESTABLISHMENT, AS PER AUTHORISED SCALES
SHOULD BE MENTIONED IN THE DPR. THE
NUMBER OF QUARTERS TO BE BUILT SHOULD BE
SUPPORTED BY THE NUBER OF EMPLOYEES
38
ESTIMATED FOR THE FACTORY AND AUTHENTIC
 PP-11

ALLIED ESTABLISHMENTS.
(iv) AMENITY BUILDINGS TO COVER SHIFT ROOMS,
CANTEENS ETC. WITHIN THE FACTORY AND
REQUIREMENT OF FACILITIES WITHIN THE ESTATE
VIZ. MARKET PLACE, CO-OPERATIVE STORES,
HOSPITAL, SCHOOLS RECREATION CLUBS, PLAY
GROUNDS, STADIUM ,BUS STOPS, POST OFFICE
ETC. WILL HAVE TO BE PLANNED AND CATERED
FOR IN THE DPR.
(v) THE REQUIREMENTS FOR FIRE FIGHTING
FACILITIES WILL HAVE TO BE MET FORM THE CIVIL
WORKS AS ASSESED AND APPROVED BY THE FIRE
ADVISOR OF M OF D . THIS WILL CONSIST OF
STATIC TANKS, FIRE HYDRANTS, MAIN AND SUB
FIRE STATIOS, AND THE WATER DISTRIBUTION
SYSTEMS, BOTH IN THE FACTORY AND THE
COLONY. 39
 PP-12

(i) THE REQUIREMENTS OF SECURITY, CONSISTING

OF SECURITY OFFICES, PERIMETER WALL,
ACCOMODATION FOR DSC PLATTONS, AND THEIR
OFFICES,SECURITY CHECK POSTS ETC WILL HAVE
TO BE ENVISAGED AT THE TIME OF PROJECT
PLANNING AND HAVE TO BE CATERED FOR IN
THE DPR.
(ii) THE BASIS OF COST ESTIMATION WILL HAVE TO
BE DEFINED IN THE DPR ITSELF. THE COST
ESTIMATE RECEIVED FROM MES, NEEDS TO BE
ENCLOSED IN THE ESTIMATE, ASSUMPTION MADE
IN REGARD TO THE TIME FRAME OF COMPLETION
OF THE BUIDINGS NEED TO BE BROUGHT
ALONGWITH THE ESCALATION OF COSTS WITH
DELAY IN COMPLETION.
 THE INVESTMENT FOR THE PLANT &
MACHINERY 40
 PP-13

(i) THE REQUIREMENTS OF PLANT & MACHINERY

ALONGWITH THE SUPPORT DATA,CYCLE TIME,IN
CASE OF PRODUCTION MACHINES.
(ii) THE EXISTING CAPACITY ASSUMED WHILE
CALCULATING THE ADDITIONAL REQUIREMENTS.
(iii) THE BASIS OF ASSUMPTION OF EXISTING
CAPACITIES.
(iv) THE PLANT & MACHINERY UNDER REPLACEMENT
WHICH WILL NEED TO BE REINSTATED FOR
MEETING THE PROJECT CAPACITIES GIVING THEIR
YEAR OF PURCHASE, THEIR YEAR REGISTER NO.
ETC.
(v) REQUIREMENT OF MAINTENANCE MACHINES TO
COVER MECHANICAL,ELECTRICAL,
ELECTRONIC,CIVIL INSTRUMENTATION AND
SERVICES. 41
 PP-14

(vii) REQUIREMENT OF TOOL & GAUGES AND

EQUIPMENT.
(viii) MECHANICAL HANDLING EQUIPMENT FOR
PROJECT EXECUTION AND PRODUCTION.
(ix) REQUIREMNT AT THE TIME OF ERECTION &
COMMISSION.
(iv) COST ESTIMATE IN RE & FE TO BE SUMMARISED,
WITH THE BASIS OF ESTIMATION.
(v) THE INVENTORIES LIKE STORES RACK AND BIN,
FURNITURE FOR OFFICES, PRODUCTION AND
OTHER MISC. INVENTORY ITEMS.
(vi) A SUMMARY OF COST SEPARATELY FOR
PRODUCTION AND MAINTENANCE WITH THE
BASIS OF COST ESTIMATE CLEARLY EXPLAINED.
THE BASIS OF COST ESTIMATES AND RELIABILITY
OF SUCH ESTIMATES. THE FACTOR OF 42
 PP-15

TIME FRAME OF COMPLETION SHOULD FIND A

MENTION.
(xiii) A DETAILED JUSTIFICATION OF IMPORTED PLANT
& MACHINERY.IT SHOULD BRING OUT THEIR
ABSOLUTE NECESSITY ON THE GROUND OF THEIR
NON-AVAILABILITY. WHENEVER APPLICABLE, THE
ECONOMICS OF USING IMPORTED MACHINES VIS-À-
VIS INDIGENOUS MACHINES SHOULD BE
JUSTIFIED.THE SOURCE OF ORIGIN AND THE
EXCHAGE RATES ASSUMED WHILE COMPUTING THE
RUPEE VALUE OUGHT TO BE BROUGHT OUT.
(G)THE UTILITIES FORM A MAJOR CONSIDERATION
WHILE ASSESING THE PROJECT INVESTMENT AND
IMPLIMENTATION. THE ASSESMENT OF
REQUIREMENT HAS TO BE IN CONSULTATION WITH
43
THE PLANT
 PP-16

SUPPLIERS. THE DPR SHOULD CONTAIN RELEVANT

DETAILS.
(i) THE REQUIREMENTS WILL INCLUDE WATER
PROCESS, FIRE FIGHTING AND DRINKING
PURPOSES, BULK AND DISTRIBUTED POWER SUPPLY
AND THEIR CABLING, COMPRESSED AIR,STEAM,
CHILLED WATER,AIR CONDITIONING,RAILWAY
LINES,LOADING AND UNLOADING PLATFORMS,
TELPHONES AND COMMUNICATION
NETWORKS,SEWAGE TREATMENT PLANTS AND
EFFLUNT TREATMENT PLANTS CONFORMING TO
LOCAL ENVIRONMENTAL CONTROL NORMS,
DRAINAGE SYSTEMS ETC. WHICH WILL NEED
DETAILED PLANNING. MEASURE TO CONSERVE
ENERGYY, WITH ITS COST, SHOULD ALSO FORM A
PART OF THE UTILITIES. CONSERVATION IN THE USE
OF WATER INCLUDING RECYCLING TO BE 44
 PP-17

(i) ESTIMATED COST OF THE UTILITIES AND THE

BASIS THEROF.
(ii) AVAILABILITY OF POWER AND WATER AND THEIR
ARGUMENTATION,CONTRACTS TO BE ENTERED
INTO WITH STATE GOVT./SUPPLY AGENCIES.
(iii) ROADS, CULVERTS AND BRIDGES ETC. REQUIRED
FOR THE PROJECT AREA FOR ENABLING
PURPOSES AND FOR THE FACTORY SHOULD BE
PLANNED.
(H) DEFERRED REVENUE EXPENDITURE
CONSTITUTE AN ESSENTIAL PART OF PROJECT
EXECUTION. DETAILED ASSESMENT OF THE
EXPENDITURE HAS TO BE MADE IN THE DPR.
SOME ASPECTS ARE LISTED BELOW:
(v) REQUIREMENTS OF TRAINING INCLUDING
FOREIGN TRAINING HAVE TO BE FORESEEN AND
SPELT OUT. 45
 PP-18

AND COMPLETELY KNOCKED DOWN AND SEMI

KNOCKED DOWN ITEMS BOTH INDIGENOUS AND
IMPORTED WITH COST ASSESSMENTS.
(iii) A SEPARATE ANNEXURE DETAILING THE
DEFERRED REVENUE EXPENDITURE NEED TO BE
ENCLOSED.

(I) PROJECT REPORT SHOULD ALSO GIVE BRIEF

OULINE OF THE ENVISAGED TIME FRAME OF
COMPLETION . IMPLICATION ON THE COST IN THE
CASE OF DELAY MAY ALSO BE BROUGHT OUT.
(J) THE ANTICIPATED COST OF CAPITAL AND
REVENUE EXPENDITURE WILL HAVE TO BE
SHOWN. IT SHOULD ALSO HIGHLIGHT THE PHASING
OF CASH FLOW BOTH IN THE FE,RE SEPARATELY 46
 PP-19

GIVING THE PHASING OF THE PROJECT. IT SHOULD

ALSO
PHASE OUT THE FE COMMITMENT YEARWISE.
(K) THE MANPOWER REQUIREMENT IS AN ESSENTIAL
IN ANY PROJECT REPORT. IT SHOULD BE GIVEN IN
THE FOLLOWING FORMATS:-
(iv) REQUIREMENT OF MANPOWER AT SITE AND IN THE
HEAD QUARTERS, DURING THE PLANNING AND
EXECUTION STAGES,CATEGORYWISE AND THE
PHASIN THEREOF SHOULD BE CONTAINED IN THE
REPORT.
(v) REQUIREWMENT OF IE’S IN THE PRODUCTION AND
PHASING THEROF.
(vi) THERE SHOULD BE ADEQUATE JUSTIFICATION IN
THE REPORT ITSELF AND NET YEARWISE
REQUIREMENT SHOULD BE ANNEXED AS AN
47
ANNEXURE.
 PP-20

 THE ECONOMICS OF THE PROJECT SHOULD

FORM AN INTEGRAL PART OF THE PROJECT
REPORT.IT MAY HAVE THE FOLLOWING:
(ii) COMPARISON WITH A KNOWN COST FROM
OUTSIDE SOURCE,INDIGENOUS OR FOREIGN.
(iii) IF THE PROJECT IS REQUUIRED ON STRATEGIC
REQUIREMENTS AND THE ECONOMIES ARE OF
SECONDARY CONSIDERATIONS, IT SHOULD BE
BROUGHT OUT CLEARLY.
(iv) IF THE PROJECT IS FOR BALANCING THE
CAPACITIES FOR MANUFACTURING END
PRODUCTS FOR CIVIL TRADE,COST BENEFIT
ANALYSIS,JUSTIFYING INVESTMENT IS
ESSENTIAL.
(M) THE PROJECT REPORT SHOULD ALSO CONTAIN
RECOMMENDATIONS FOR SPEEDY 48
 PP-21

ATION THE PROJECT. IT MAY HAVE THE

FOLLOWING:
(ii) SPECIAL POWERS, IF ANY, FOR PROCUREMENT
OF PLANT AND MACHINERY,CONTRACTS FOR
ERECTION AND OTHER SERVICES SHOULD BE
DELEGATED TO THE PROJECT IMPLEMENTATION
AUTHORITIES.
(iii) SPECIAL POWERS FOR CONSTRUCTION AND
CIVIL WORKS SHOULD ALSO BE DELEGATED TO
THE PROJECT AUTHORITIES.
(iv) SANCTION OF OFFICERS AND STAFF ALONG
WITH THE GOVT.SANCTION FOR THE PROJECT.
(v) REQUIREMENTS OF GO-AHEAD SANCTION FOR
THE CIVIL WORKS.
(N) THE QUESTIONARE FOR ECONOMIC FINANCE
COMMITTEE (EFC), DULY FILLED IN, SHOULD 49
 Pp-22

 IT HAS BEEN ADVISED THAT :

(ii) PROJECT COST SHOULD BE WORKED OUT BASED
ON THE LATEST AVAILABLE PRICE.
(iii) THE EXCHANGE RATE ADOPTED SHOULD BE
SPELT OUT
(iv) LIKELY INCREASE IN COST DUE TO PRICE
ESCALATION FORMULA DUE TO EXPIRY OF TIME
BEFORE PROJECT COMPLETION SHOULD BE
INDICATED.
(v) A REALISTIC TIME FRAME FOR COMPLETION OF
THE PROJECT MAY BE WORKED OUT.
(vi) THE POTENTIAL AREAS OF DIVERSIFICATION
INTO CIVIL TRADE OR EXPORT SHOULD BE
IDENTIFID AT THE TIME OF PREPARATION OF
DPR AND THIS 50
 PP-23

 SHOULD BE TAKEN INTO ACCOUNT AT THE TIME OF

ORDERING P& Ms.
(vi) THE QUANTUM OF STATUTORY LEVIES LIKE CD,
ED SHOULD BE SPECIFIED IN THE DPR.
(vii) PERIODIC MID STREAM REVIEWS MAY BE
CARRIED OUT TO ENSURE THAT THE FACILITIES
CREATED ARE COMMENSURATE WITH THE ACTUAL
REQUIREMENTS.

SUMMARY AS WOULD BE EVIDENT FROM ABOVE,

THAT THE PROJECT REPORT IS A FACTUAL BASIS
FOR THE INVESTMENT PROJECTED WITH
ENVISAGED OUTTURN FOR SETTING UP OF FRESH
CAPACITIES. THE REPORT SHOULD BE PREPARED IN
PROPER MANNER (TABULAR/GRAPHICAL) AND IT 51
 PP-24

MIN OF DEF FOR SETTING UP THE PROJECT. IT

SHOULD ALSO CONTAIN CLEARANCE ACCORDED BY
OTHER STATUTORY AUTHORITIES LIKE
ENVOIRONMENTAL BODIES,STATE ELEC BOARD.
ETC. IT SHOULD ALSO ENCLOSE THE DETAILS OF
P&M WITH COST, SUPPORT DATA FOR ASSESMENT
OF THE REQUIREMENT OF UTILITIES,MANPOWER
REQT. ESTIMATED IMPORTATION REQUIREMENTS
OF MATERIALS, CASH FLOW YEAR WISE ETC. CPM
NETWORK AND KEY PLAN TO FACTORY AND THE
TOWNSHIP SHOULD BE MENTIONED. SCHEMATIC
FLOW OF MATERIAL FROM ONE FACTORY TO
ANOTHER, MEASURE TO COMPLY WITH ANTI
POLLUTION NORMS AND STEPS TO CONFIRM TO
THE REQUIREMENTS OF ENERGY CONSERVATION
SHOULD ALSO BE MENTIONED. 52
 PP-25

 PROVISION OF ANTI-POLLUTION MEASURES:

THE COST OF ANTIPOLLUTION MEASURES SHOULD
BE TREATED AS INTEGRAL COSTS OF PROJECT
BEING FORMULATED. MEASURES TO SAFEGUARD
ENVIRONMENT ALSO SHPULD BE TREATED
SIMILARLY. SUITABLE MEASURES ARE TO BE
PLANNED AND PROVIDED IN PROJECT COSTS AT
THE BEGINNING ITSELF.
 ENERGY CONSERVATION IN NEW PROJECTS:
ALL NEW PROJECTS HAVE A CHAPTER ON ENERGY
CONSERVATION IN THE PROJECT REPORT ITSELF. IT
HAS BEEN ADVISED THAT THE NEW PROJECTS DO
NOT CONTRIBUTE TO THE INEFFICIENT USE OF
ENERGY. IT MAY ALSO BE APPLIED TO THE
EXPANSION OF PROJECTS INVOLVING LARGE
INVESTMENTS. 53
 PP-26

 PLANT AND MACHINERY AND CIVIL WORKS:

ACTIVITIES PERTAINING TO PLANT AND
MACHINERYFOR THE PROJECTS, ARE AS
FOLLOWS:
 PREPARATION OF MASTER LIST OF P & M
WITH BASIS OF CALCULATION WITH CYCLE
TIME ESTIMATED COST INCLUDING
BUDGETORY OFFERS.
 PREPARATION OF DETAILED
SPECIFICATIONS OF P & M.
 ISSUE OF TENDER ENQUIRIES
 HOLDING OF TEC/TPC AT FY/OFB
 OBTANINING FINANCIAL CONCURRENCE
AND PLACEMENT OF SUPPLY ORDER
 FOR IMPORTED PLANT & MACHINER,
APPROVAL OF COMPETENT FINANCIAL
AUTHORITY FOR RELEASE OF FE 54
 Pp-27

(i) THE SO/CONTRACT SHOULD BE DETAILED. THE

ACCEPTANCE CRITERIA,OF MACHINES/PROCESS
PLANTS, DETAILS OF COMMISSIONING,
BUILDING/FOUNDATION DETAILS,SERVICE
REQUIREMENTS,TECHNICAL ASSISTANCE ARE ALL
REQUIRED TO BE WELL LAID OUT.
(ii) FOLLOW UP OF COMMERCIAL ASPECTS OF
S.O/CONTRACTS, SO FAR AS PURCHASER’S
OBLIGATIONS ARE DULY PERFORMED. LC OPENING
AND OBTAINING NECESSARY STATUTORY
CLEARANCE IS PURSUID
(iii) ADEQUATE PREPLANNING AND CONTRACT
PLANNING IS DONE TO EFFECT DELIVERY,ERECTION
AND COMMISSIONING OF P&M.
SOME OF THE IMPORTANT ASPECTS WHICH NEED
55
TO BE EVALUATED/FOLLOWED FOR IMPORT OF
 Pp-28

i) FROMULATION OF QUALITATIVE AND QUANTITY

REQUIREMENTS IN THE SPECIFICATIONS
ii) FINANCIAL STANDING/SOUNDNESS AND
REPUTATION OF THE SHORT LISTED SUPPLIERS
iii) PROVISION OF ADEQUATE SAFE GUARDS IN THE
AT/SUPPLY ODERS FOR IVOKING THE SAME IN
CASE OF FAILURE OF SUPPLIER OF PLANT AND
MACHINERY OR DEFAULT ON HIS PART
iv) RESPONSIBILITY OF SYSTEM INTEGRATION
SHOULD BE ASSURANCE AND RELIABILITY OF ALL
BOUGHT OUT VENDOR ITEMS,LIKE
COMPONENTS/SUB ASSEMBLY/SUBSYSTEMS ETC.
IS THE GUARANTEED BY THE SAILOR AND
APPROPRIATE PROVISION MADE IN THE
CONTRACT. 56
 PP-29
v) PROVISION OF TRAINING IN USAGE, MAINTENANCE ETC. IN THE
CONTRACT.
ii) IN CASE OF COMPLEX, PLANTS TO CONSIDER DEPUTING
DESIGN REVIEW TEAM COMPRISING RAPES OF USERS,
MAINTENANCE, INSPECTION WING AS ALSO STAGE
INSPECTION WING AS ALSO STAGE INSPECTION WHERE
NECESSARY.
iii) THE MODALITIES OF INSPECTION SHOULD BE CLEARLY SET
OUT IN THE CONTRACT.
iv) PROVISION FOR PREDESPATCH INSPECTION BY THE
PURCHASERS INSPECTION TAM.
v) SUSTAINED FOLLOW UP AND IMPLEMENTATION OF
CONTRACTS.
vi) THE INSPECTION TEAM SHOULD BE WELL VERSED IN
CARRYING OUT THE PRE-DESPATCH INSPECTION.
vii) IF INSPECTION OF IMPORTED PLANT AND MACHINERY IS TO
BE DONE ON RECEIPT IN INDIA AVAILABILITY OF SPECIAL TEST
EQIPMENTS/SPECIAL TEST INSTRUMENT HAVE TO BE 57
 PP-30

 THE RELATED CIVIL WORKS IN PROJECT EXECUTION INVOLVES

FOLLOWING ACTIVITIES:-
i) OBTAINING VARIOUS CIVIL WORKS DATA FROM PLANT
SUPPLIERS. THE SCHEDULE OF RECEIPT SHOULD BE
PREDECIDED. THE DATA WOULD INCLUDE DIMENSION OF
MACHINES, WORKING AREA AND THE LAYOUT OF PLANT, ITS
AUXILIARIES, FIXTURES, MATERIAL HANDLING EQUIPMENT AND
AREA FOR FLOW OF MEN AND COMPONENTS/PROCESSED ITMES.
iii) COVERING OF SITING BOARD.
iv) APPROVAL OF SITING BOARD BY COMPETENT AUTHORITY.
v) PREPARATION OF AE PART-I AND II BY MES.
vi) CONCURRENCE BY FINANCE AND ISSUE OF ADMINISTRATIVE
APPROVAL BY COMPETENT AUTHORITY
vii) IN ADVANCE OF FORMAL PROJECT SANCTION OR APPROVAL BY
CIVIL WORKS, GO AHEAD APPROVAL IS ACCORDED TO
COMPRESS TIME SPAN.
viii) EXECUTION OF CIVIL WORKS AND ITS FORMAL TAKING OVER BY
58
USER
 PP-31

 FACTORY
viii) WHEREVER CIVIL WORKS ARE EXECUTED BY THE
DPARTMENT, THE TECHNICAL SPECIFICATION AND SCOPE
OF WORKS ARE FINALISED BY THE FACTORY AND ARE
VETTED BY CE(CIVIL) OF BOARD.
ix) THE WORKS ARE ESTIMATED COSTWISE AND ARE
CONCURRED BY FINANCE.
iv) THE WORKS ARE TENDERED IN TWO BID SYSTEM- ASKING
FOR TECHNICAL & COMMERCIAL BID SEPARATELY
v) ALL CLARIFICATIONS AND DISCUSSIONS ARE HELD TO
ENSURE THAT CONFORMITY TO SPECIFICATION, AS WELL
AS STATUS AND BUILDING CODES ARE COMPILED WITH.
THE COMPETANT FINANCIAL AUTHORITY SHOULD ACCEPT
THE TECHNICALLY ACCEPTED OFFERS.
vi) THE PRICE BIDS ARE OPENED THEREAFTER AND A
RANKING STATEMENT IS MADE, FOR ALL OFFERS WHICH
WERE ACCEPTED TECHNICALLY EARLIER.
59
 PP-32

(i) THE CONTRACT IS CONCLUDED BY THE COMPETANT

AUTHORITY IN CONSULTATION WITH FINANCE.
 PROJECT MONITORING ;
 THE PROJECT MONITORING IS DONE WITH RESPECT TO BOTH
P & M AND CIVIL WORKS.IT IS DONE FOR BOTH PHYSICAL
ACHIEVEMENT AND FOR FINANCIAL PROGRESS. THE BASIS OF
PROGRESS MONITORING IS DONE ON THE BASIS OF
REPLANNED SCHEDULED EXPRESS AS CPM NETWORKS, THEY
ARE PERIODICALLY UPDATED BASED ON ACTUALS. THE
ACTIVITIES ARE:
(iv) PREPARATION OF PERT/CPM NETWORKS.
(v) PREPARATION OF PROGRESS REPORTS PERIODICALLY, BOTH
FOR PHYSICAL COMPLETION AS WELL AS FOR FINANCIAL
EXPENDITURES/CASH FLOWS.
(vi) COMPRESSING THE ACTIVITIES, REMOVALOF UNWANTED
SLACK PERIODS AND EVEN BUNCHING OF PROCUREMENTS SO
AS TO STEER TOWARDS TARGETTED DATES OF COMPLETION.
(vii) PREPARATION OF CASH FLOW BUDGETSFOR THE YEAR, FOR60
 PP-33

 COMMITMENT NOTING (FOR FE) (FORECAST

ESTIMATE AND ACTUAL EXPENDITURE.THIS
MAY BE DONE FOR PERIODS OF ONE EACH
FOR THE ENTIRE PROJECT DURATION.
iv)THE FUNDS ARE TO BE ARRANGED FOR
ANNUAL BUDGET EXPENDITURE AND
SLIPPAGES ARE TO BE FORMALLY ANALYSED.
v) SINCE DIFFERENT AGENCIES ARE
ENVOLVED,COMLETION OF CASH FLOW FROM
MULTIPLE SOURCES, INVOLVING DIFFERENT
PLANT SUPPLIERS IS AN ESSENTIAL TASK.
vi) TAKING CARE OF EXCESS REQUIREMENT OF
FUNDS AS WELL AS RESTRICTING SLIPPAGES
IN CASH FLOW IS AN ESSENTIAL INGREDIENT
TO PROJECT IMPLIMENTATION. 61
 PP-34

 THE PROGRESS MONITORING CAN BE DONE BY

USE OF APPLICATION PACKAGES, WHICH CAN BE
RUN EVEN ON PCS. SCHEDULING, AND PLANNING
IS DONE EITHER BASED ON SINGLE MACHINE OR
A GROUP OF MACHINES.
 MONTHLY PROGRESS REPORT REGARDING THE
PROJECT IS SUBMITTED BY THE FACTORY TO THE
CONCERNED PROJECT GROUP AT OFB WITH A
COPY TO THE OPERATING DIVN. MONITERING THE
PROGRESS,THE FOLLOWING VARIOUS REPORTS
ARE SUBMITTED:-
iii) MONTHLY REPORT FROM FACTORY TO HEAD
QUARTERS.
iv) PROJECT REVIEW IN DDG NET WORKING AT OFB
62
 PP-35

i) MONITORING AT BOARD LEVEL ON QUARTERLY

BASIS
ii) MONITORING AT MINISTRY LEVEL THROUGH
MONTHLY, QUARTERLY AND HALF YEARLY
REPORTS.
 ANNUAL BUDGET PROJECTIONS FOR PROJECTSS
FOR PROJECTS (NC) ARE MADE AND REVIEWED AS
PER THE FOLLOWING REPORT/SCHEDULE:-
NAME OF REPORT DUE DATE
 FORCAST ESTIMATE (FE) 25TH OCT OF
PRECEDING YR
 BUDGET ESTIMATE (BE) 25TH NOV -DO-
 PRELIMINARY REPORT (PR) 25TH AUG OF CURRENT
YR
 PRELIMINARY REVISED EST(PRE 25TH OCT OF –DO
– 63