File No.20/1/2014-H-lI Government of India Ministry of Power Shram Shakti Bhawan, Rafi Marg, New Delhi— 110001 Telephone No. 2371 5507; Fax No. 2370 5841 Dated: 9" October, 2017 To 1. The Chairman / Member (HE), CEA, Sewa- Bhawan, RK. Puram, New Delhi. 2 CMDs — NHPC Ltd., SUVN Ltd., NTPC Ltd., THDC India Limited, NEEPCO Ltd 3. Chairman — BBMB, DVC. Subject: Guidelines for preparation and vetting of Revised Cost Estimates (RCE) of Hydro Electric Projects of CPSUs - regarding. The undersigned is directed to enclose a copy of the Guidelines for preparation and vetting of Revised Cost Estimates (RCE) of Hydro Electric Projects of CPSUs for information and compliance. 2. The instant guidelines will supersede earlier guidelines on preparation and vetting of Revised Cost Estimates (RCE) of Hydro Electric Projects of CPSUs This issues with the approval of the competent authority. Yours faithfully. Encl.: As above. i Fesale, nt) CA (Kundan Kumar) Under Secretary to the Govt. of India, BS 3o@) Telefax.: 23705841 } p CF) Email: kundan.k@nic.in fo to 1e[20r~File No.20/1/2014-H-II Copy to: PS to JS(H) / PS to JS&FA/ PS to Director(H-ll) / PS to Director (H-I) / US(H-I) / US(NHPC) / US(IFD) / SO(H-II) / SO(BBMB).es for preparation and vetting of Revised Cost Estimates of Hydro lectric Projects of Central Power Sector Undertakings and other Hydro Electric Schemes funded by Government of India in India and abroad The Ministry of Finance, Department of Expenditure (PF-II) Division vide their O.M, No, 24(35)/PF-I1/2012 dated S® Aug 2016 have laid down guidelines for Appraisal and Approval of Public Funded Schemes and Projects (except matters required to be placed before the Cabinet Committee on Security), These guidelines inter-alia stipulate the following in regard to Revised Cost Estimates: 141 Any Increase in costs due to statutory levies, exchange rate variation, price escalation within the Approved time cycle and / or increase in costs up to 20 percent due to any other reasons, are covered by the approval of the original cost estimates. Any increase in this regard would be approved by the Secretary of the Administrative Department concemed with the concurrence of the Financial Adviser, |.2 Any increase in costs beyond 20 percent of the firmed up cost estimates due to time overrun, change in scope, under estimation, ete. (excluding increase in costs due to statutory levies exchange rate variation and price escalation within the approved time cycle) should first be placed before a Revised Cost Committee chaired by the Financial Adviser (consisting of the Joint Secretary in-charge of the program division and representative of Chief’ Adviser Cost as members) to identify the specific reasons behind such increase, identify lapses, if any. and suggest remedial measures for the same. The recommendations of the Revised Cost Committee Should be placed for fresh appraisal and approval before the competent authority. as per the extant delegation of powers (It may be noted that a firmed-up cost estimate here means a cost estimate which has been through the full appraisal and approval procedure as per the extant delegation of powers), 2.0 In view of the aforesaid instructions of the Ministry of Finance and to streamline the procedure {or timely preparation and vetting of Revised Cost Estimates (RCE) of Hydro Electric Proje of Central Power Sector Undertakings (CPSUs), guidelines in two parts ie. Part-I: Guidelines {or Preparation of revised cost estimates by CPSUs and Partll: Guidelines for vetting of Revised Cost Estimates by CEA/ CWC are prescribed herewith, The guidelines for completion cost are laid down in Part-II 3.0 PARTI: GUIDELI PSUs ES FOR PREPARATION OF REVISED COST ESTIMATES BY 3-4 CPSU shall initiate and prepare the RCE in the manner as described in para 11 and 1.2 above The RCE shall be prepared in the formats attached with Part-II of this Guidelines the activities involved in preparation of RCE are given below. 4) Project Level activities - The activities at Project level shall be as under: ‘+ Mapping from Accounting heads to DPR heads‘* Working out executed quantities & head-wi Estimation of anticipated balar Analysis of Cost & Time overrun * Finalisation & Submission to Regional Office duly vetted by Finance expenditure incurred ‘quantities / expenditure till completion of the project and >) Regional Office Level activities ~ the activities at Regional Office level shall be as under + Examination ofthe proposal and seeking clarifications from the project, i any + Vetting of Quantity / Price variation Vetting of Time Overrun Finalisation & Submission to Corporate office duly vetted by Finance ©) Corporate Office Level activities-The activities at Corporate Office level shall be as under ‘+ Examination of proposal and seeking clarifi © Finalization of RCE © Vetting by Finance © Preparation of Brief Note ‘© Approval of Management ‘+ Submission to Ministry of Power / CEA ons from the regional office/project, if any ‘Timelines for preparation of RCE by CPSUs (150 days) Project Level Initiation of RCE Formulation by Project Mapping from Accounting heads to DPR heads, Working executed quantities & head-wise expenditure incurred, Estimation of anticipated balance quantities! expenditure till completion of the Project, Analysis of Time overrun with reasons (such as Technical’ | contractual problems. Law & order problems, labour problems, | fatural disaster, geological surprises ete.), Bifurcation of cost variance as per MoF”s guidelines / instructions | | | ination of the proposal io Seeking clarifications from project, if 8 | | Vetting of Quantity / Price Variation — ps 2.4 | Vetting of Time Overrun eee (concurrent) 2.5 | Finalization & submission {0 Corporate Office duly vetted by Finance | 2 as — 35 | mrporate Office Level | Examination ofthe proposal i 32 | Sec 736] Approval of Management ~3.7| Submission to Ministry of Power CEA __ Sub Total 3) Total (14243) | Note: In ease thee is no set up a regional Teel he timeline allied ts Restans eo ac ‘merged with the time line allied to Corporate level activities The flow chart of activities is given at Plate-1. 3-4 A comparative statement of approved vis-a-vis changed salient features shall be included in RCE proposal. In case, there is no change in salient features w.r-t, approved one, a certificate this effect shall also be included in RCE proposal 4.0 PART GUIDELINES FOR VETTING OF REVISED COST ESTIMATES IN CEA/ CWC 4.1 CEA shall appraise/ vet the Revised 73 (h) of the Electricity Act, 2003. ‘ost Estimate as per the functions assigned under section 42. CPSU shall submit document of Revised Cost Estimates (twelve (12) numbers of hard copies along with equal numbers of soft copies on compact disk) to CEA, containing the following information: (i) The details/ information as per Checklist given at Annex-l (Gi) The details’ information as per Formats given at Anmex- IIA (I 10 3); Annex BI (1 to 7) and Aunex- H1B2 & I1B3. 4.3 CPSU shall also submit a certificate that RCE is on account of: (i) change in design/ scope or addition’ deletion or i) no change in design’ scope or no addition’ deletion 44° On receipt of proposal of RCE in CEA, if, during preliminary examination it is found that there sare major changes) in the design’ specifications of structure(s)’ equipment with respect to the approved design/ specifications, the proposal shall be treated as “Memorandum ‘of Changes” and the same is required to be got approved by Authority. In such ease, the time cycle as indicated in para 4.6 below will commence once the RCE proposal is re-submitted based on the approved “Memorandum of Changes” by Authority 45 Completeness of RCE shall be assessed after its scrutiny by respective appraising groups in CEA CWC within two weeks of receipt of RCE in CEA from CPSU. The RCE complete in all respects will be taken up for detailed examination in accordance withthe norms specif in “Guidelines for formulation of Detailed Project Report of Hydro Electric Projects, January 2015 (Revision 5.0)". The queries raised by appraising group(s), if any, shal be promptly ‘eolied by the CPSU within the stipulated time schedule as prescribed by the appraising group(s) failing which the RCE shall stand returned to the CPS46 The various aspects / activities in the RCE will be examined by CEA and CWC as per timelines indicated below: — | Time Period (days) 1 [Receipt of RCE from CPSU & its circulation 5 \(12 Copies) SL. No. |Aspeet/ Activit (Organizai ((A) Incase change in desiga/ scope or addition/ deletion are i-vaivea — sal Note and its approval) CRA Total (8) fon Catia Pa Total (A&B) [onc © Appraisal/veting of RCE by appraising groups in CEA/ CWC including ‘preparation and approval of Appraisal Note shal! be completed in 100 working dave iw cage change in ‘design’ scope or addition’ deletion are involved and 50 working dave In ene change in design’ scope or addition! deletion are not involved from the date of ae ‘ceptance of RCE complete in all respects + howe time lines do not include the time taken by the CPSU in furnishing clarifications/ ‘replies 10 the commerts/ observations of appraising groups in CEXCWC The flow chart of activities for vetting of RCE by CEA/ CWC: given at Plate-H. 47, CEA on appraisal / vetting of RCE, will provide the comments / observations to Ministry of Power,5.1 $2 53 55 60 PART-II: COMPLETION Cost {t will be mandatory on the part of CPSUs to submit the completion cost of HE. Project ‘executed by them to MOP afier the project is completed CPSUs shall follow the same procedure for preparation of the proposal for completion cost as given in Part-l and include similar information/ data as given in para 4.2 and 4,3 of Part-II above. The comparison of the completion cost shall be made with respect to the lates approved RCE as well as original sanctioned cost estimates. Completion cost is prepared after project is completed and involves mainly the expenditure already incurred by the project authorities. The authenticity/ correctness of expenditure ‘already incurred as considered in the completion cost rests with the project authorities Project authorities would have to satisfy themselves about the reasonableness of the same, as CEA/ CWC would not be able to examine such fait-accompli completion cost. As such, a certificate shall be submitted by the concemed CPSU regarding authenticity/ correctness of expenditure incurred. ‘The concemed design formations in CWC and CEA need to examine the completion cost Proposal from the angle of changes in design with respect to approved designs and provide their observations. Cost appraisal formations may provide the analysis of cost incurred by the concerned CPSU in executing the project with respect to sanctioned cost and awarded cost, latest approved Revised Cost Estimates. CEA on appraisal / vetting of RCE, will provide the comments / observations to Ministry of Power, These guidelines are also applicable to Hydro Electric Schemes funded by Government of India in India and abroad. Certified copy of expendi Annex-1 Preseribed numbers of Hard and Soft copies of the RCE / Completion cost Copy of TEC/ Concurrence accorded by CEA. Copy of the CCEA approved cost estimate, Approval of extension of time, if any Contract documents/ Agreement (relevant portion), Bill of Quantities (BOQ) ~ Original and revised. Drawing volumes: DPR and drawings depicting structural changes, if any made during detail engineering, Bidding and Construction Stage. Construction schedule (Bar chart), {A pote and comparative statement on salient features as envisaged in approved DPR, during pidding and during construction stage along with justification for deviations from approved DPR ). Write up on physical progress. Write up on cost overrun and time overrun, Centficate regarding Quantities executed to be executed as considered in RCE. as per construction/planning/specification drawings issued and site condition, Copy of Approvals of deviated extra items of civil, HIM and F&M works along with a note ‘on mechanism of approval and competent authority. Certified copy of actual escalation paid along with detailed calculation of escala executed quantities and balance quantities. Copy of latest bill and bill for the month of RCE along with item wise deviation statement showing deviation of quantities executed and amount, incurred from Finance for all the Sub-Heads. Drawings, Layouts, EstimatesJustifications, Approvals of competent authority and other Supporting documents for Infrastructure works i.e. Preliminary, Land, Buildings, Plantation, Miscellaneous, Special T&P, Roads, Environment and Ecology, Tool and Plants for works executed and balance provisions and for changes carried out from DPR as well av new provisions along with justification. Justification for the provision in Establishment based on organization chart of manpower Aeployediproposed to be deployed for the project execution/implementation along. with detailed breakup, separately for F&M and civil establishment,REVISI sTIMA’ (Main Abstract) | Sanctioned Cost At Price Level — Rs. 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