Railway Accounts Department Examinations
Showing posts with label PV clause. Show all posts
Showing posts with label PV clause. Show all posts
Friday, December 21, 2018
Sunday, April 15, 2018
Price Variation clause
PVC
– Price Variation Clause
·
Purpose:
To resolve the conflicts between Contractors and Railway due to variation in
prices, PVC is incorporated in the Conditions of the Contract. This will protect the interests of
Contractors as well as Railways against the rising and declining the prices of components
of the Contract respectively.
·
PVC
clause – 46 A of GCC – Standard General Conditions of Contract (of
Indian Railways) -
Click
here for GCC
·
Applicability: Applicable only for contracts
of value (contract agreement value) as prescribed by Ministry of Railways from
time to time. At present the contract agreement value is Rs.5 Crores or more.
·
However
the authority competent to accept the tender or SAG officer or 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.
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authority
·
Example:
Estimated value of Tender is Rs.5.05 crores (as per NIT). But value of Contract as per Contract
Agreement is Rs.4.5 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 applicable to a Works Contract
which is either an AMC or a Zonal Contract.
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authority
·
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.
·
Base Month: Month of opening Tender (incl:
Extension if any)
·
The quarter for applicability of PVC shall
commence from the month following the month of Opening the Tender.
·
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
|
Labour
|
Fuel
|
Material
|
Detonators
|
Explosives
|
Other Material
|
Fixed
|
Total
|
Earthwork
|
50
|
20
|
-
|
-
|
-
|
15
|
15
|
100
|
Ballast & Quarry products
|
55
|
15
|
-
|
-
|
-
|
15
|
15
|
100
|
Tunnelling
|
45
|
15
|
-
|
5
|
15
|
5
|
15
|
100
|
Other works
|
30
|
15
|
40
|
-
|
-
|
-
|
15
|
100
|
·
Formulae for Labour component :
W
x (Lq – Lb) x Lc
L
= ___________
___
Lb 100
Where
L = Amount of price variation in Labour
W= Gross
value of Work
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
·
PVC – Extended period of Contract
1.
PVC applicable , if extension granted vide
Clause 17-A of Standard GCC.
2.
PVC not applicable, if extension granted vide
Clause 17-B of Standard GCC. 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.
·
Practical
example: 2015 Appendix 3 exam General
Expenditure paper (Without Books)
Construct a
PV formulae from the following data.
Component
|
Percentage
|
Fixed component
|
15
|
Skilled Labour (L)
|
20
|
Fuel (F)
|
15
|
Cement ( C )
|
25
|
Steel (S)
|
25
|
Total
|
100
|
·
Base rate indices and End of Quarter figures for
the Indices are as follows.
Particulars
|
Base date index
|
End of the Quarter index
|
Skilled Labour ( L)
|
100
|
103
|
Fuel (F)
|
200
|
120
|
Cement ( C)
|
300
|
309
|
Steel (S)
|
400
|
380
|
Workout the
PV payable, if the value of the Work done in the quarter is Rs.50 lakhs.
Solution:
Labour component ( L):
W x (Lq –
Lb) x Lc
L
= ___________ ___
Lb 100
50,00,000
x ( 103 -100) x 20
= ------------------------------- ----
= 30,000
Plus
100 100
Fuel Component (F):
W x (Fq –
Fb) x Fc
F
= ___________ ___
Fb 100
50,00,000
x ( 120-200) x 15
= ------------------------------- ----
= 3,00,000
Minus
200 100
Cement
Component (C):
W x (Cq – Cb) x Cc
C
= ___________ ___
Cb 100
50,00,000
x ( 309-300) x 25
= ------------------------------- ----
= 37,500
Plus
300 100
Steel
Component (S):
W x (Sq –
Sb) x Sc
S
= ___________ ___
Sb 100
50,00,000
x ( 380-400) x 25
= ------------------------------- ----
= 62,500
Minus
400 100
Total of variation = 30,000 – 3,00,000
+ 37,500 – 62,500 = 2,95,000
Revised amount to be paid to
the contractor = Rs.50,00,000 – Rs.2,95,000
= Rs. 47,05,000
Alternate Solution
Particulars
|
%
|
Base date
index
|
End of the
Quarter index
|
Change in %
|
% of Gross
value Rs.50,00,000
|
Revised Gross value due to PVC
|
Variation
|
1
|
2
|
3
|
4
|
5 =
(4-3)/100
|
6 =
Rs.50,00,000
x Column 2
|
7 = 6 x 5
|
8 = 7 - 6
|
Skilled Labour ( L)
|
20
|
100
|
103
|
Plus 3 %
|
10,00,000
|
10,30,000
|
30,000
|
Fuel (F)
|
15
|
200
|
120
|
Minus 40 %
|
7,50,000
|
4,50,000
|
(-) 3,00,000
|
Cement ( C)
|
25
|
300
|
309
|
Plus 3 %
|
12,50,000
|
12,87,500
|
37,500
|
Steel (S)
|
25
|
400
|
380
|
Minus 5 %
|
12,50,000
|
11,87,500
|
(-) 62,500
|
Fixed component
|
15
|
100
|
100
|
No change
|
7,50,000
|
7,50,000
|
Nil
|
Total
|
100
|
50,00,000
|
47,05,000
|
2,95,000
|
Note:
Candidates are advised to
monitor the latest guidelines issued by Railway Board in regard with Price
Variation Clause.
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