Railway Accounts Department Examinations

Showing posts with label EMD. Show all posts
Showing posts with label EMD. Show all posts

Monday, March 18, 2019

EMD – Earnest Money Deposit (as per GCC for Works – Nov, 2018)

EMD – Earnest Money Deposit
(as per GCC for Works – Nov, 2018)

ü  Earnest means – Showing sincere interest/serious in participating the Tender process, if awarded executing the Work for Organizations like Indian Railways.

ü  EMD – Earnest Money Deposit – means an earnest payment as specific form of Deposit to demonstrate that the applicant is serious/sincere to participate the Tender work and complete the work for orgnisations like Indian Railways, if awarded.

ü  EMD Rates are as follows.

Value of the Work
EMD Amount ( Rounded to a nearest Rs.100)
Up to Rs.1 Crore
2 % of value of the work
Beyond Rs. 1 Crore
Rs. 2 lakhs + 0.5 % of the excess of the estimated
cost of work beyond Rs.1 Crore

ü  Maximum EMD is Rs. One Crore only.

Examples for calculation of EMD under different circumstances: -
1.       Value of Work  - Rs. 25,60,520

2 % of Rs.25,60,520  - Rs. 51,210

Answer is Rs. 51,200 /- (Rounded off to a nearest Rs.100)
2.       Value of Work  - Rs. 4,00,00,000 ( Rs. Four Crores)

First one Crore
Rs.2,00,000 (Rs. Two Lakhs)
One Crore to Four Crore ( 3 Crores)
Rs.3 Crores x 0.5 % = Rs. 1,50,000 (Rs.1.5 Lakhs)
For Value of Rs.4 Crores
Rs.2 Lakhs plus Rs.1.5 Lakhs = Rs.3.5 Lakhs

3.       Value of Work  - Rs. Two Hundred Crores

First one Crore
Rs.2,00,000 (Rs. Two Lakhs)
One Crore to Two Hundred Crore ( 199 Crores)
Rs.199 Crores x 0.5 % = Rs.99,50,000
For Value of Rs.200 Crores
Rs.2,00,000 plus Rs.99,50,000 = Rs.1,01,50,000.  However maximum EMD is Rs.1 Crore.  So EMD is Rs.1,00,00,000/- ( Not Rs.1,01,50,000)

ü  EMD is applicable to all modes of Tenders such as Open, Limited, Single etc.

ü  Exemption for Submission of EMD – Firms recognized as “STARTUPS” by DIPP (Dept of Industrial Policy & Promotion.

ü  EMD of Successful Tenderer – Retained as part of Security Deposit.  But Railway shall return the EMD, if a Successful Tenderer submit “Term Deposit Receipt (TDR) / Bank Guarantee Bond towards the Full Security Deposit.

ü  EMD shall be deposited in Cash (through E-Payment Gateway) or as mentioned in Tender documents.

ü  EMD of unsuccessful Tenderers – Returned to them. But Railway is not liable to pay the depreciated value, if any or any interest on EMD.

ü  Forfeit of EMD:

1.       If the successful tenderer unable to submit the PG – Performance Guarantee within validity of time, or
2.       If the successful Tenderer resile/abandon from his offer, Or
3.       Modify the terms and conditions there of in a manner not acceptable to the Railways.