saree err TTA TAROT orm terran (wee aRaes oie corarl rarer) National Highways Authority of India (Ministry of Road Transport and Highways) SS WG 6, Ha, ere, AE ert 110 075 G-5 & 6, Sector-10, Dwarka, New Delhi-110075 NHAI/Policy Guidelines/PPP (DBFOT) No. 8.3.36/2020 dated 10" July, 2020 [Decision taken by the Executive Committee on file no. NHAI/CMD/2019/Circular/COSGRIS (C.N. 1783)] Sub: Guidelines for determination of Cost of Change of Scope (COS)/ Reduction in Scope (RIS)/Withdrawal of works/Alteration (Change/omission in existing item) in Works in DBFOT Projects- Applicable Schedule of Rates, Design Charges and Maintenance Charges-Regarding National Highways Authority of India (NHAI) has adopted Model documents issued by Ministry of Road Transport & Highways (MoRTH) for procurements of Civil Contractors and Concessionaires. Based on its procurement and operation experience the implementation of these documents needs more clarity and lesser susceptibility to litigations/conflicts. 2) These guidelines are being issued in this reference for clarifications on applicable Schedule of Rates, Design Charges and Maintenance Charges for determination of Cost of Change of Scope (COS)/ Reduction in Scope (RIS)/Withdrawal of works/Alteration (Change /omission in existing item) in Works in DBFOT Projects. 3) In cases where any specific provisions on COS/RIS are prescribed in the Concession Agreement, the same shall prevail. 4) These Policy Guidelines will be implemented strictly from the date of issue of this Policy Circular for unapproved COS/RIS. In case of COS/RIS already decided, the approved cost of COS/RIS shall not be reopened on the basis of these guidelines. 5) No Change of Scope shall be executed unless the Authority has issued the Change of Scope Order. Instructions given during inspections/meetings shall not be treated as approval to go ahead with execution of COS until formal approval of competent authority is obtained. Concerned Independent Engineer and Project Director shall be held responsible for any failure on this account. 6) Applicable Schedule of Rate: i) Schedule of Rates (SOR) for Change in scope shall be as per relevant clause 16.2.2 of the Concession Agreement. ii) For determination of the cost of Altered component (Change/omission in specifications/ dimensions of existing item), SOR shall be adopted as above. Cost of Altered component of work shall be determined as difference (net) between the cost for Altered Work and existing Work as per concession agreement.“2 iii) -ve COS/RIS: a) The Concession Agreement (CA) provides a clear cut timeline for compliance of Conditions precedents, which also includes providing ROW for the Project, The land, which were not provided as per the terms of CA, if de-scoped, the ve COS for such de-scoped ROW/stretch should be valued on the SOR applicable on the date of PCOD. (1 PCOD in case of multiple PCODs; the concession agreement does not provide for multiple PCODs and multiple PCODs remains only a matter of convenience between the parties.) b) Incase of ROW for the stretches provided with in the defined timeline of the CA, (-ve) COS should be valued on the basis of the SOR applicable on the date of issue of written notice for de-scoping. iv) tve COS: SOR for COS executed as _per due procedures of concession agreement shall be as on the date of communication of the approval. 7) Determination of Cost of COS works 7.1) DBFOT-Toll projects: In case of the DBFOT-Toll projects the Investments are made by the concessionaires, which are recovered through collection of Toll. During the project implementation, there may be scenarios when complete site could not be handed over and PCOD granted for completion of work on the handed over land/ROW. Depending upon the condition of road, tolling is allowed either for full project length or for the fully completed project length only: i) In cases tolling allowed for full length on construction of main carriageway but work as per full scope for items other than main carriageway is not constructed, the collected toll is to be compensated by concessionaire by way of investment through payments to Authority for-ve COS/RIS. ii) In cases tolling is allowed for fully completed part length of project highway. then the -ve COS/RIS cost, for the remaining length not completed and to be de-scoped, shall be recovered from the concessionaire and loss of expected toll revenue for that un-tolled length be paid by Authority to concessionaire. 7.2) DBFOT-Annuity projects: In case of the DBFOT-Annuity projects the Investments are made by the concessionaires, which are recovered through receipts of annuities. During the project implementation, there may be scenarios when complete site could not be handed over and PCOD granted for completion of work cathe handed over land/ROW. Depending upon the condition of road Annuity payment is allowed either in full or proportionate to the fully completed project length only: i) In cases full Annuity allowed but work as per full scope is not constructed, the annuity receipts are to be compensated by concessionaire by way of investment through payments to Authority for ve COS/RIS. ii) In cases proportionate Annuity is allowed for fully completed part length of project highway then the -ve COS/RIS cost, for the works not done and to be de-scoped, shall be recovered from the concessionaire and loss of Annuities shall be paid by Authority to concessionaire, Contd. -Pg 33. 7.3) Interest shall be chargeable on the recoverable amount of ve COS: i) if approval for -ve COS is given before PCOD : from the date of ve COS approval till recovery date, ii) if approval for -ve COS is given after PCOD: from the date of allowing Tolling/Annuity payment for the section till recovery date, iii) Rate of Interest on the recovery amount against -ve COS shall be same as per concessionaire’s Loan Agreement 7.4) Recovery for -ve COS/RIS shall be made @ % specified in concession agreement. 7.5) Delayed Payment : For delayed payment of +ve COS amounts, Interest shall be paid as per concession agreement, in case it is not defined in Concession agreement, then interest may be charged @ SBI 1 year MCLR +2%. 7.6) Escalation is allowed where completion period is more than 18 month. Under COS, it is not expected to take up any item, which require more than 18 months. As such No price escalation shall be provisioned during construction period of COS/Altered component of Work. 7.7) Design Charges for COS Works: No design charges are normally allowed. However, in cases involving complex structures and work proposed is not similar to the work in the original scope, the design charges may be permitted with an upper cap @1% of cost of such new works as decided by Independent Engineer. 7.8) Maintenance Charges for COS Works after construction and during Operation & Maintenance Period: Maintenance Charges for +ve COS works shall not be paid by Authority to concessionaire, or shall be recovered by Authority from concessionaire for - Ve COS/RIS unless the change of scope affects the project in terms of increase/decrease in length of project highway and/or service roads. In case the Change of scope proposal for Flexible pavement is arrived due to increase/decrease in length of project highway and/or Slip/Service roads, then Maintenance Charge (against ordinary repairs and periodic renewals) @ 1% per annum of the cost of +ve COS/-ve COS/RIS shall be paid (in case of *ve COS) or recovered (in case of -ve COS/RIS) ii iii) Incase, the change of scope proposal is for a Major Bridge/flyover/Any major structure (excluding VUP/PUP/LVUP), Maintenance Charges @ 0.5% of bridge proper cost per annum to be paid (in case of COS) or recovered (in case of - ve COS/RIS) on yearly basis at the end of each accounting year. L Contd. -Pg 4-4- iv) In case of Rigid Pavements, for change of scope proposals, till 10 years from the date of Project completion no maintenance charges shall be paid. After 10 years, 5% of COS cost shall be paid (in case of +ve COS) or recovered (in case of -ve COS/RIS) against panel replacement and major repajrs if any. (Aniarendra Kumar) CGM (Coord) All Officers of HQ/RO/PIU/CMU Copy to: All Members/CVO PS to Chairman