Railway Accounts Department Examinations

Tuesday, October 26, 2021

Completion Reports

 Completion Reports

  •  Source: 17th Chapter of Engineering Code   

  • At the time of closing of Construction works, any items which were in progress should be completed and the accounts of the Project should be closed as soon as possible.  

  • The Project Engineer should therefore take prompt action as follows:

  1. To bring into account all charges and credits pertaining to the Project. 

  2. Take steps to liquidate all outstanding liabilities.

  3. Clear Suspense balances.

  4. Pay up outstanding Contractor’s claims

  5. Dispose of all surplus stores and tools and plants returned from work. 

  6. After all charges and credits relating to the Project have been booked in the accounts of the Project, a CR - Completion report of the Project should be prepared. 



  1. To compare the cost of work actually constructed with those provided in the last sanctioned estimate . 

  2.  To close the accounts of the work. 

  3.  To serve as a lesson to prepare the estimates for similar future works more realistically.

  4.  To regularise the excess over sanctioned estimate

  5.  To transfer the expenditure reported in CR to Open Line through TWFA

  • Details: It should state the expenditure in the same details as the abstract estimate sanctioned by the Railway Board and should indicate any material modifications thereto. 

  • Verification: By Accounts Officer

  • Submitted to:  Railway Board

  • Target: Within 18 months from the end of financial year in which the completed estimate is submitted. 

  • Example:  Suppose the Completion estimate is sanctioned in June, 2018.  The end of the Financial year is March, 2019. Hence the due date for submission of Completion Report is 18 Months from March, 2019 i.e., September, 2020. 


  •  Addl information in CR:  Any other information as would in the opinion of the Railway administration be of interest to the Railway Board. 


  • Form E. 1706


Particular Heads of Account and Description of works

Amount of Estimate with reference to authority for sanction

Actual Expenditure


Remarks & Explanations



  • Explanations: 

  1. Excesses:  Not less than 10 % or Rs. 25000 whichever is less over the Estimate  - Sub work wise. 


  1. Savings: Not less than 20 % or Rs. one Lakh whichever is less over the Estimate  - Sub work wise. 

  • If variations are within 5 % of the Sanctioned Estimate, the respective Engineer is authorised to approve CR behalf of GM.  


  • CR of New Railway Lines:   Accompanied by a Comparative statement showing the literal prospects of the line as anticipated and updated with ref to the Completion Cost. While working out, the changes happened for the estimate of Earnings up to the date should have been taken into account while working out the financial prospects. 


  • CR of Works costing less than Rs. One Crore

  1.  Should be considered as completed when it funds the purpose for which it when sanctioned, was intended,

  2. and when there has been no expenditure thereon for 3 months thereafter. 

  3. All outstanding debits and credits - as a rule adjusted in the account of work within 3 months of the date of completion. 

  4. The account of a completed - should be closed 6 months after the date of completion and CR should be drawn.

  5. CR should be prepared in the same work as that for works costing over Rs. One Crore. 

  6. Explanations:  Excesses and Savings - 5% or Rs.10000 whichever is less.  

  7. Should be submitted within 6 months of the Completion of the Work.  

  8. No expenditure is recorded for 3 consecutive months - Accounts officers should call for the CR. 

  9. Uncompleted Works - The executive officer should advise the Accounts Officer of the probable dates of completion and submission of the completion reports.

  10. Abnormal delay in the submission of reports by the executive officers should be brought to the notice of the Head of the Railway Administration by the accounts Officer.

  • Sanctioning of CR: 

  1. The authority who accorded the Administrative approval to the work for information or regularisation. 


  1. Structural & Track Renewal works or Works costing over Rs.2.5 Crores included in the Budget with prior approval of Railway Board or Out of Turn works sanctioned with the administrative approval of Railway Board being beyond the GM’s powers         -   GMs  


  1. Where Material modification involved or beyond the GMs powers  - Railway Board.  

Accounts verification: 

  1. Check that the CRS have been prepared in the proper form

  2. Check the entries with the particulars of sanction and  booked outlay. 

  3.  Correctness of postings of all final bills in the CR

  4. Test checking the correctness of a percentage of other items. 

  5. Satisfactory explanations for excesses and savings. 

  6. Unused materials are returned to Stores or  transferred elsewhere and the account of work credited with their value. 

  7. CRRM - Credits for the Railway Released Materials provided in the estimate - adjusted against the work or not

  8. Verification Certificate should state the authority competent to sanction the outlay in the Report. 

Completion Statements: 

  • In case of works - Expenditure on such works is within the competence of the Head of Railway to sanction.  Formal CR on the prescribed form need not be prepared. 

  • All information required in CR, the Accounts officer certificate and the sanction of the competent executive authority may be recorded in the Works Registers under the relevant columns. 

  • E1744 - Completion Statement

  1. Reference to estimate.

  2. Amount of sanctioned estimate.

  3. Actual expenditure as finally booked.

  4. Brief explanation of excess or saving. 

Problems facing drawal of CRs

  1. Works Registers not being up to date

  2. Old works –no Records

  3. Final Bills yet to be passed

  4. Adjustments pending

  5. No Funds

  6. Arbitrations and Disputes

  7.  Lethargy and Slackness

  8.  No adequate  monitoring at higher levels

  9.  Frequent changes in staff/Jurisdictions 

  10.  Lack of interest & guidance

  11.  Large variations in Cost and Sanctions

  12.  Non-realisation of Credits 

  13.  Vigilance Cases/Audit Objections

  14.   Mobilisation Advance remaining unrecovered 

  15.  Compensation for land acquisition not finalised in courts


  1. Reconciliation of Works Registers with the records available in the Accounts Office. 

  2.  Draw up provisional CR in case any Arbitration case is pending or balances lying under MAS or MAC (Risk & Cost) 

  3. Submission of Part CRs to the coordinating Dept for inclusion in the General CR. 

  4. Finally, after the sanction of Competent Authority is obtained, action is to be taken to write to Sr.EDPM to close the work code, for stopping further printing of Works Register.

  • accounting and financial principles envisage that the accounts of the completed works should be closed as expeditiously as possible so that the housekeeping in both the Accounts and Executive Departments will be in order.


Thursday, October 21, 2021

Tuesday, October 19, 2021

Price Variation clause

PVC – Price Variation Clause

  • Source: 46A of GCC for works

  • Purpose: 

  • To resolve the conflicts between Contractors and Railway due to variation in prices

  • To protect the interests of Contractors as well as Railways against the rising and declining prices of

  • components of the Contract respectively.

  •  Applicability:  Contract agreement value is Rs. 5 Crores or more.

  •   However the authority competent to accept the tender or SAG officer of Executive Dept,

  • whichever is higher may decide that PVC shall not be applied to the contract’s Agreement

  • value of Rs. 5 Crores or more   OR that PVC  shall apply to the contract’s Agreement value

  • of less than 5 Crores also.  Such a decision should be taken with the concurrence of associated

  • finance and the same should be incorporated in the Special conditions of Contract

  • before issuance of NIT – Notice Inviting Tender.


  •  Example: Estimated value of Tender is Rs. 5.50 Crores  (as per NIT).  But the value of the Contract

as per Contract Agreement is  Rs. 4.75 Crores, then PVC shall not apply, even if the actual final value
is Rs.5 Crores  or more due to variation in quantities during the execution of the Contract. 
Thus variation in quantities after signing of Contract Agreement is not relevant for deciding whether
PVC is applicable to a Contract or not.

  • PVC shall not be applicable to a Works Contract which is either an AMC or a Zonal Contract.


  • PVC shall not be admissible for the following items

  1. Specific payments to consultants.

  2. Materials supplied free of cost by Railways to the Contractor

  3. Fixed component.

  4. Any extra NS items included in subsequent variation

  • Base Month: Shall be taken as month 28 days prior to opening of Tender including extensions,

  • if any, unless otherwise stated elsewhere. 

Example1: 5th July, 2021 is Tender Opening Date.  In this case, June, 2021 is the Base month. 

Example2: 31st May, 2021 is Tender Opening Date.  In this case, May, 2021 is the Base month. 

  • Base Quarter: Shall commence from the month following the Base month.  

In above Example1: The Base Quarter is July to September, 2021. 

In above Example2: The Base Quarter is April to June, 2021

  • The Price Variation shall be based on the average Price Index of the Quarter under consideration.

  • The percentages of different components of various types of engineering works are as follows.

Type of work

Earth work, Ballast

supply, Tunneling

(without explosives)


(with explosives)












other material







Plant, Machinery

& Spares







Fuel & Lubricants







Detonators &








Fixed Component














  • Fixed component @15% shall not be considered for any price variation.  

  • Formulae for Labour component : 

        W x (Lq – Lb)  x Lc

        L  =     ___________     ___

                                        Lb                   100


 L = Amount of price variation in Labour

W= Gross value of Work (excludes: Specific payments to consultants, material supplied by Railways at

fixed price, Price value of Steel & Cement) 

Lq= Consumer price index number for Industrial workers – All India published by RBI for the

Average price index of the 3 months of the Quarter under consideration.

Lb= Consumer price index number for Industrial workers – All India published by RBI for the Base period.

Lc= % of Labour component

  • The above formulae is applicable for other components i.e., Other Materials, Plant & Machinery,

Fuel & Explosives.  (not applicable for Cement & Steel) 

  • Formulae for Steel : 

        Sw x (Sq – Sb)  

        S  =     ___________    


 S = Amount of price variation in Steel 

Sw= Gross value of Steel supplied by the Contractor as per the On Account Bill for the month under consideration.  

Sq= Index number of Monthly wholesale Price Index for the relevant category of mild steel  item  for the Average price index of the 3 months of the Quarter under consideration.(DIPP)

Sb= Index number of Monthly wholesale Price Index for the relevant category of mild steel  item  for the Average price index of the Base period under consideration.(DIPP)

  • Formulae for Steel is equally applied to the Cement component too. 

  • PVC – Extended period of Contract

  1. PVC applicable , if extension granted vide Clause 17-A of Standard GCC. (Due to delay on part of Railways)

  2. PVC not applicable, if extension granted vide Clause 17-B of Standard GCC. (Due to delay on part of Contractor ) But if PVC is favorable to the Railways, that is the rates under consideration are decreased, then the PVC is applicable even under the extension is granted vide clause 17-B of Standard GCC.

  • Example: Construct a PV formula from the following data of Building Contract.  Total Agreement Value is Rs.2,40,000.  ( includes: Consultant payment - Rs. 10000, Cement - Rs. 20,000, Steel - Rs.10000) 



Fixed component




Other materials


Plant, Machinery & Spares


Fuel & Lubricants




  • Base rate indices and End of Quarter figures for the Indices are as follows.


Base Quarter Period index

End of the Quarter under consideration index




Fuel (F)



Cement ( C)



Steel (S)



Workout the PV payable

W= Gross Value = Rs.2,40,000 - Rs.40,000 (Excluded items) = Rs.2,00,000


Labour component ( L):

                                   W x (Lq – Lb)  x Lc

        L  =     ___________     ___

                                        Lb                   100

      2,00,000  x ( 105 -100)  x   40

   = -------------------------------     ----  =  Plus Rs.4000

                      100                      100

Fuel Component (F):

                                   W x (Fq – Fb)  x Fc

        F  =     ___________     ___

                                        Fb                   100

     2,00,000  x ( 150 -200)  x      5

   = -------------------------------     ----  =  Minus 2500 

                     200                        100

            Cement Component (C):

                                    Cv x (Cq – Cb)  

        C  =     ___________    


                  20,000  x ( 630-600)  x        

   C  =     -------------------------------       =  Plus 1000 



            Steel Component (S):

                                        Sw x (Sq – Sb)  

        S  =          ___________    


                  10,000  x ( 535-500)  x        

   C  =     -------------------------------       =  Plus 700 


Total of variation = 4000 – 2500 + 1,000  + 700 = Rs. 3200

Revised amount to be paid to the contractor = Rs.2,40,000 + Rs. 3,200 = Rs. 2,43,200