1

Estimate Definitions
• An estimate is a projection of qty. based on
experience and/ or information available at the time
of estimation.
• It may be a detailed cost estimate computing cost of
each activity in a work.
• It is a process of calculating the total expected cost
of a project and includes not only material and
lobour but also equipments, tools, management
and overheads.
• It is a document consisting of construction plans,
specifications, project manuals, scope of work and
other related data useful for drafting the contracts,
determine project feasibility and set budgets for
financial planning. 2

01/28/24
 PURPOSES
• To know probable cost of work proposed.
• To examine whether the work is financially
justified or not.
• To obtain administrative approval and
technical sanction from competent authority.
• To work out material schedule.
• If cost exceeds limit, then to take the
• sanction for revised cost.
•
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 PURPOSES (CONTD.)
• To get the funds available to execute the
work.
• To prepare bar chart based upon quantity of

items so that progress of work can be

monitored.
• To work out completion periods of individual
activity as well as that of whole work.
• To work out and arrange various types & no.
of labour required for specified work & time.
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 CONDITION WHERE PREPRATION OF ESTIMATE IS
NOT REQUIRED
• ENGG CODE Para No. 1102
• THE ORDINARY RULE IS THAT” NO WORK MAY BE
COMMENCED AND NO LIABILITY OR
EXPENDITURE INCURRED ON A WORK UNTILL A

DETAILED ESTIMATE FOR IT HAS BEEN

SANCTIONED AND AN AlLOTMENT OF THE
REQUISITE FUNDS MADE BY COMPETANT
AUTHORITY”.
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 Estimates required for
Construction or Purchase of new works or Assets
Renewals & replacements of existing works or
assets
Scrapping or dismantling or abandonment of
existing works or assets
Reconditioning of existing works or assets
Repair works
Temporary & experimental works
Renewals & replacement of worked lines
Renewals of Ballast
D.G.JOSHI. DFM/AP F & A. 01/28/24 6
THIS RULE PERTAINING TO PREPARATION OF
ESTIMATE WILL NOT BE APPLY TO FOLLOWING
CASES

1.FOR THE CONSTRUCTION OR PURCHASE OF NEW

WORK OR ASSET UNDER THE CATEGORY OF NEW
MINOR WORKS IF ESTIMATED COST UPTO Rs.
50,000/-
2.FOR RENEWALS AND REPLACEMENT OF EXISTING
WORK AND ASSET CHARGEABLE TO OLWR AS A
NEW MINOR WORK IF ESTIMATED TO COST Rs.
50,000/-

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•3) FOR RENEWALS AND REPLACEMENT OF ASSETS
CHARGED TO DF AND IF ESTIMATED TO COST Rs.
50,000/-
•4) FOR RENEWAL AND REPLACEMENTS OF ASSET
CHARGED TO REVENUE IF ESTIMATED TO COST UP

TO Rs. 2 LAKH.
•5) FOR RECONDITIONING OF EXISTING ASSETS IF
ESTIMATED TO COST UP TO Rs. 1 LAKH,AND ANY
REPAIR WORK CHARGEABLE TO REVENUE
COSTING UPTO Rs. 5.00 LAKH (c. f. PARA 701)

(C.S. NO. 51 Dtd. 27.09.2017.)

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•6) WORK UNDER URGENCY CERTIFICATE
(1103E&1104E)
TO SAFEGUARD LIFE AND PROPERTY OR TO
REPAIR DAMAGE TO THE LINE CAUSED BY FLOOD,
ACCIDENT, OTHER UNFORESEEN CONTINGENCY,
SO AS TO RESTORE OR MAINTAIN THROUGH
COMMUNICATION.
DIVISIONAL ENGINEER MAY AUTHORISED TO
COMMENCE THE WORK , BUT SHOULD AT ONCE
SUBMIT THROUGH PROPER CHANNEL A REPORT
TO THE AUTHORITY COMPETANT TO GIVE
ADMINISTRATIVE APPROVAL TO THE WORK AND
ALLOT THE REQUIRED FUNDS.

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 Preparation of Detailed Estimate
not required for
New Minor Work Recondition Renewal Repair works
chargeable to Capital works works (Revenue)
Renewal/Replacement (Revenue)
chargeable to DF,
Up to Rs. 5 Lakhs
OLWR
Up to Rs. 50000 Up to Rs. 1 Up to Rs. 2 Up to Rs. 5
Lakh Lakhs Lakhs

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 TYPES OF ESTIMATES.

• ABSTRACT ESTIMATES.
• DETAILED ESTIMATES.
• SUPPLEMENTARY ESISMATES.
• REVISED ESTIMATES.
• PROJECT ABSTRACT ESTIMATE.
• CONSTRUCTION ESTIMATES.
• COMPLETION ESTIMATES.
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 ABSTRACT ESTIMATE.(E-702)
• To form reasonably accurate idea of the
probable expenditure of any proposal.
• Required for administrative approval.
• to establish necessity, utility and financial
prospects by the CA
• Saves time & expense of preparing
detailed estimates at early stage.
• Cost is calculated based upon past
expenditure incurred in similar type of
structure duly modified for escalation,
and variation in site conditions etc., 01/28/24 12
• Accompanied with brief report and justification.

• Cost can be calculated based on thumb rule as

follows:
• Building work -- per sq. m.
• Platform (COP) -- per bay. Or per sq.m
• P. Way. -- per km.
• Floor over Platform -- per sq. m.
• Washable apron -- per m.
• Inspection pit -- per m.
• O.H. Water tank. -- per. Lt.
• Land -- per hectare 01/28/24 13
 ESSENTAL ENCLOSURES.
• Brief report and justification for the work (including
inadequacy statement if for construction of new quarters,
showing %age of staff provided with quarters)
• A rough sketch (not to scale) in A4 size showing the site &
scope of work.
• The plan head to which it is to be charged in case of works
proposed for Works demand
• The allocation of each item as between Capital, Development
Fund, Open Line Works-Revenue, Depreciation Reserve Fund
and Revenue should be indicated.
• Funds required for the year for which it is programmed.
• Inclusion of item in Works Programme/M&P Programme/RSP
with Budget provision - Deemed to be the administrative
approval of the Abstract Estimate. 01/28/24 14
 DETAILED ESTIMATE.(E-704)

• Prepared after getting administrative

approval (other than that for which construction
estimate in form E-553 is prepared).
• Prepared in sufficient details.
• Required for technical sanction of competent
authority.
• No work included in an abstract estimate should
be commenced till detailed estimate is prepared
and sanctioned and funds allotted by C.A.

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• Necessary for preparing tender & contract
documents.
• Work can only be executed after sanction of
detailed estimate.
• Open line detailed estimate should comprise:-
1 .Statement showing details of estimated
cost.(E 704/E705)
• 2. An outer sheet (E -706) giving the abstract
cost of work, report, Fund Certification &
the allocation.
• Prepared in form E -705 for P. Way. Material.
• Prepared in Form E- 704 for all other works.
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 TECHNICAL SANCTION
• The sanction accorded by CA to the detailed
estimate of a work is known as technical
sanction.
• Before according TS the CA should satisfy
itself that
• The details of the scheme as worked out are
satisfactory.
• The methods proposed for the execution of
the work are adequate; and
• The cost has been estimated from reliable
data and is likely to be reasonably accurate.
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 SUPPLIMENTARY ESTIMATE: (E-707)
• An estimate is prepared for left over items
which ought to have been included in
sanctioned estimate, but has not been so
included or items found later, should be
considered as being a part of estimate. If the
above items cannot met out of contingencies
taken for all the purposes S.E is treated as a
part of the main estimate.
• S.E. isprepared in the same form and the
same degree of details as the main
(detailed) estimate. 01/28/24 18
 REVISED ESTIMATE.(E-708)
• If expenditure is likely to be exceeded in
the sanctioned detailed estimate then R.E.
is prepared.
• R.E. is not required if :-
1) estimated cost exceeds up to 20% due to
variation in quantities of items or new
item,
2) estimated cost exceeds up to 100% due
to escalation.

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• Revised Estimate Should be got
sanctioned by C.A. Who
sanctioned main estimate unless
otherwise financial limits of C.A.
Has been exceeded.

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• For the estimate within the competency of
local authority, the form in which R.E. is
prepared should be decided by C.A. in case
where there has been no great modification in
the scope of the main estimate, an abstract
dealing with major items with explanation only
to be prepared.
• In all other cases detailed R. E. In the same form
and the same degree of details as the main
estimate.
• Each R. E. Should be accompanied by a
comparative statement showing the excess or
saving under each sub head of account against
latest sanction.
• Reasons for each such variation is explained.
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PROJECT ABSTRACT ESTIMATE(PARA-709)

• Abstract estimate of construction

project is called project abstract
estimate.
• Prepared for Railway Board’s
approval.
• Prepared in the form E-554

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 ABSTRACT COST TO BE ACCOMPANIED BY :-
• 1.An abstract estimate of junction arrangements.
• 2.A narrative report explaining the salient features
and major items of expenditure.
• 3.Detailed estimate on form E- 553 under the
following heads :
• 1132-tunnels,
• 1151 & 1152-major bridges,
• 1153 & 1154-minor bridges,
• 1140-ballast and permanent way (detailed estimate

for one kilometer).

• 1180 & 1190 – establishment and general charges,
• 2000-rolling stock.
• The detailed estimates should be prepared from an
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engineering survey report.

 CONSTRUCTION ESTIMATE.(E-710)

• Detailed estimates of all the works included in the

project as a whole are collectively called
construction estimate.
• Required for getting technical sanction to the
various works included in the construction project.
• Prepared on the basis of information collected
during final location survey of new line, gauge
conversion, doubling of line
• Should be prepared in such details as to avoid any
other further estimating.
• Prepared in the form -E - 553.
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 COMPLETION ESTIMATE.(E-713)
• Prepared in super session of a construction
estimate and includes :-
• Amount of sanctioned estimate.
• Actual expenditure on all works.
• Commitments on date.
• Anticipated further outlay.
• Total estimated cost.
• Diff. between the sanctioned estimate and the
completion cost. 01/28/24 25
• Prepared with brief explanations - Excesses - Rs.
10,000 or 10% which ever is less and Savings - Rs. 1
Lakh or 20% which ever is less

• Prepared - At the end of one of the first three

financial half years after the date of "opening"

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 ESTIMATES OF DEPOSIT WORKS

• Deposit Works- execution of works for and at

the cost of other Govt.deptts, local bodies,
private persons etc. are termed as Deposit
Works.
• To meet the cost of plans and estimates of such
works as also those to be carried out for other
departments out of railway funds departmental
charges at prescribed rates are to be levied. (for
works costing over Rs.1 lakh- 2%) min.Rs.2000/-
• All estimates of DW should be got accepted by
the parties ordering the works before
submitting for sanction to the C.A and work to
be started only on getting the sanction and
deposition of estimated cost to railways.
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 PART ESTIMATE

• Part estimates are those estimates

which are prepared for sub-works
associated to the works which are to
be commenced at the earliest date by
which detailed estimate for the
project as a whole could be prepared
and sanctioned.

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 ITEMS OF PART ESTIMATES
• Preliminary works including FLS
• Setting up of project offices and organizations
like office accommodation etc.
• Land acquisition
• Formation and Bridge work for whole or part of
the estimate
• Minimum service bldg.in case of new lines
• Minimum residential qtrs.to meet immediate
need of construction staff.
• It should be certified that no work included in
part estimate are likely to become redundant
when estimate for the whole project is prepared
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to obtain Rly.boards sanction.

CHECKLIST

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 Summary of Estimates
Open Line Works Construction Remarks
Projects
1. Abstract Estimate 5. Project Abstract For obtaining Administrative approval

Estimate
2. Detailed Estimate 6. Construction For obtaining Technical Sanction
Estimate
3. Supplementary Estimate Prepared both for Open Line Works &
Construction Projects

4. Revised Estimate Prepared both for Open Line Works &

Construction Projects

------ 7. Completion Stock taking Estimate for

Estimate Construction Projects

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 GROUPING OF WORKS

• When two or more works are so connected ,

either by their situation or by the purpose or
purposes which they are designed to serve,
• thatconstruction of one necessarily involves
that of the other or others,
• the works should be considered as one scheme
and the aggregate estimated cost of the work
so connected determine the authority
competent to sanction expenditure on that.
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 VETTING OF ESTIMATES

• In order to monitor control over expenditure, regular checks are

being exercised by Accounts officer on all the estimates before
sanction of C.A
• The object of such preliminary checks are to avoid irregular
sanction to expenditure

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 VETTING OF ESTIMATES…

• The main points of consideration are

• The propriety of the expenditure
• The incidence and classification of charges
• Existence of budget provision during F.Y
• Freedom from errors and omissions and
• Competency of sanction
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 Verification…

• Competency of sanction:
• This should be decided with reference to the
delegation of powers given by railway
board/GM as revised from time to time.
Presently as given in Model SOP.
• Currency of sanction
• the sanction to an estimate will ordinarily
remain current for the given years from the
date on which it has been accorded. If a
specific provision of expenditure on works in
progress is available in sanctioned budget of
the year then it may be regarded as reviving for
that year irrespective of the 5years limit.
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•
• But if no work has been commenced on a
sanctioned scheme within two year from
the date of sanction, then such sanction
should be treated as lapsed. Fresh
sanction with up to date estimate would
be necessary if it is decided to undertake
the work.

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 ANNEXURE TO ACCOMPANY THE
ESTIMATE
• Top sheet as per form E702
• Estimate as per for E553 & E554
• Checklist for estimate
• Brief history, details of previous sanctions,
latest status, detailed justification of work
• Chartshowing facilities proposed in original
estimates, stage wise approval in further
estimates and now proposed.
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 Contd.
• Check list and certificate regarding rates adopted
• Consolidated comparative statement showing the variation
in cost w.r.t the Abstract cost in case of Detailed
estimate/revised estimate clearly bringing out the variation
due to escalation, variation due to change in quantities and
variations due to new items.
• Technical explanatory note for increase in cost due to new
items and increase in quantities. Should be given.
• Views of associate finance and remarks thereon/
• Above annexures should be signed by an officer not below
the rank of SAG/JAG
• Top sheet and comparative statement should also be signed
by an officer not below the rank of SAG/JAG from the
executive and accounts.
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