GOVERNMENT OF ANDHRA PRADESH

IRRIGATION & C.A.D. (PW-REFORMS) DEPARTMENT

Circular Memo.No.34843/Reforms/2006 Dated 7th May, 2008

Sub : I & CAD Department – EPC Contract system – Certain Clarifications – issued.
Ref : Govt.Memo.No.16937/Maj.Irrig.III(1)/06-2, Dated 16.11.2006.
***
The Government have embarked on substantial programme in the Irrigation Sector
through the EPC (Engineering, Procurement and Construction) route. This route is being
adopted by the Government in a substantial measure and indeed it is new system for
Engineering Department in the State. Consequently, certain initial problems in operating and
maintaining EPC contracts are bound to arise. Several of these issues have been identified and
resolved and Finance Department had also conducted a Workshop with all the concerned in
order to remove bottlenecks in various operational issues and to run the entire process in a
more efficient and accountable manner in terms of financial discipline, accounting discipline,
efficiency etc. still, there are issues arising in several cases, where due to lack of clarity and
ambiguity in procedures, the execution of EPC contract is getting bogged down in disputes or
slow down of work and in certain cases, even it has led to adverse remarks from the Vigilance
Commissioner. Therefore, to clarify on issues of basic parameters, savings, excess and
extension of time etc. the Government referred the issue to the Committee of Advisors
constituted vide G.O.Ms.No.204 Irrigation & CAD (Reforms) Department, Dated 13.9.2007.
The recommendations of the Advisors Committee were considered and the Government have
decided to give following guidelines, duly modifying the guidelines given vide Memo referred
above in order to further smoothen the execution of EPC system.
1. The EPC contract generally stipulates a period within which a given work has to be
completed. Due to reasons either beyond the control of the employer and at times
EPC contractor, an extension of time is necessitated to complete the ongoing
works. In G.O.Ms.No.1441 I & CAD Dated 13.6.2007; it was ordered that extension
of time up to 6 months could be considered by the State Level Standing
Committee. Extension of time beyond 6 months could be recommended by the
State Level Standing Committee for the consideration of the Government. There is
no limit on the extension of time, which the Government may grant.
2. The Advisors Committee recommendation regarding the Basic parameters with
respect to irrigation projects under Jalayagnam has been accepted by the
Government. The Basic parameter will generally comprise of the following.
a) In respect of Head works of projects, the basic parameter would be water
storage capacity, with reference to FRL and maximum Flood Discharge,
number and discharging capacity of Head regulators, River sluices, penstocks.
b) In respect of canals, the basic parameter would be canal discharging capacity,
full supply level, bed level, command area to be covered, location of starting
and ending of canal, Distributaries.
c) In respect of pumping stations, the basic parameters would be capacity and
efficiency of the Motors and pumps, type of pumps, quantity of water to be
lifted, the height of lift (static), location of pump house, delivery level,

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 location of delivery cistern, power supply, location of pressure main
connecting pump house and location of delivery cistern and discharge to be
delivered at cistern.
3) In an EPC contract, the total value of the contract is fixed subject to price
adjustment for certain material component. Some responsibilities towards detailed
engineering and preparation of detailed designs have deliberately been cast upon
the EPC contractor within the overall parameters of the project. However, different
design solutions could be proposed by the contractor which could be accepted by
the competent authority after due examination of the technological superiority and
establishing the best solution for the purpose in the project. Competent authority
as authorized by the Government is the final authority to accept a proposed design.
Further, in most EPC contracts the detailed survey, design and estimate
engineering is not complete at the time of agreement. They are done in the course
of execution of the project. All designs must be in compliance with the codal
provision, Government orders and practices. As is obvious, in such an exercise,
there would be cases where the cost to be incurred for a given component of a
project, due to approved design, might be more than what was originally estimated
by the department or there might be a situation where due to a certain design, the
cost could be less than the estimated cost for that component. Quite often, audit
suggests that the cost lesser than the estimated is a saving, which should accrue to
the Government, forgetting that there would also be components where there could
be an excess cost on components beyond the estimated which is cast on the
contractor. But in both the situations, the excess and less are unreal because, there
are no two approved designs and therefore there can not be two different costs to
arrive at excess or less. There is always only one best design solution for the
purpose of achieving project goals and the Government must get the benefit of
most efficient and technologically best suited design. As a general rule, the cost on
any component due to any implementation of approved design should always be on
contractor’s account within the cost of the total contacted amount under EPC until
and unless such designs effectively change any of the basic parameters as defined
above. In such a situation, where there are revisions in the design due to change in
the basic parameter then the modalities for effecting such a change in will be
decided with the prior approval of Government.
This Memo issues with the concurrence of Finance (W&P) Department vide their U.O.No. 1496-
F8(A1)/08 Dated 18.4.2008.
RAJIV RANJAN MISHRA,
SECRETARY TO GOVERNMENT
To
All the Engineers-in-Chief } I & CAD
Department All the Chief Engineers}
All the Superintending Engineers through Engineer-in-Chief
(Irrigation) Copy to all Sections in I & CAD Department
Copy to Finance (W&P) Department
Copy to PS to Special Secretary to
C.M. Copy to PS to Minister (M&MI)
Copy to PS to Special C.S. Finance
Copy to PS to Secretaries I & CAD Department, Secretary
(RRM). Copy to all Advisors
SF/SCs.
// Forwarded by order //
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 GOVERNMENT OF ANDHRA PRADESH
IRRIGATION & CAD DEPARTMENT

Memo No.014244/Reforms/06 Dt. 20.05.2006.

Sub:- Inspection of works by Secretary Irrigation – Regarding.
*****
Inspection of some of the project sites has been conducted by the undersigned recently.
To make the exercise more systematic and effective the following instructions are issued for all
future inspections / visits of the undersigned.
The concerned Executive Engineers shall carry with them the following records for
verification, at the time of inspection.
1. Copies of Agreements for each package.
2. Index plan for the projects.
3. Approved Designs and drawing for the various components.
4. GSI Geologists reports & experts committee reports, if any.
5. Latest progress bar charts, marked in different colors for the programme and the
progress.
6. In case of shortfall – reasons for short fall. In case the delay is attributable to
Contractor, copies of notices issued to the Contractor and his response.
7. Placement registers and Quality Control registers.
8. Remarks of Quality Control / 3rd party Quality Control Agency and rectification
carried out.
9. Inspection notes of Senior Officers issued periodically.
10. Land Acquisition, Forest Land Acquisition – Status Report.
11. R & R Status Report.
The concerned Executive Engineer of each package has to brief the Secretary about the
progress and problems at sites. The concerned Superintending Engineer / Chief Engineer of the
projects has to brief the Secretary on the overall planning budget and coordination aspects.
RAJIV RANJAN MISHRA
SECRETARY TO GOVERNMENT

To
1. The Engineer-in-Chief, Irrigation, Errum Manzil, Hyderabad.
2. The Chief Engineer, HNSS, Ananthapur.
3. The Chief Engineer, TBP, Kadapa.
4. The Chief Engineer, Telugu Ganga Project, Srikalahasti.
5. The Chief Engineer, Velugonda Project, Ongole.
6. The concerned Superintending Engineer & Executive Engineer through their Chief
Engineers.

// Forwarded By Order //

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