Cost Monitoring System

7/30/2019 Cost Monitoring System

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Budgetary Cost Control


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OBJECTIVES

To enable control of cost of various items within the project

budget.

To continuously monitor cost of project and keep the

management informed of the expenditure incurred against

various commitments /orders.

To prepare necessary documentation and records for periodic

reference.

To forecast periodic plans, to phase out fund requirements as

per funds availability.

To prepare comparison of plan Vs actual expenditure

periodically.


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MAJOR AREAS OF

BUDGETARY COST CONTROL

Preparation of Annual Expenditure Plan (Yearly Budget).

Preparation of Monthly Expenditure Report.

Preparation of Revised Cost Estimate.

Preparation of various other reports for our internal use and alsoas per clients requirement.


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ANNUAL EXPENDITURE PLAN

(ANNUAL BUDGET)

The Annual budget is prepared for the year with monthly break-up.

The budget is prepared zone-wise, specifications wise under

following major heads:

(a) Civil work.

(b) Structural work.

(c) Equipment.


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Basis of Budget for Civil Work Monthly forecast for civil work is made based on plan of

concreting work.

Example:

SL

NOSPCIFICATION NO. DESCRIPTION TOTAL APR'08 MAY'08 JUN'08 JUL'08

RAW MATERIAL HANDLING SYSTEM (ZONE - 01)

Civil work Rs. in Cr. 64.12

Quantity (cum) 75000 4000 4000 3500 3500

Budget (Rs. in Cr.) 3.25 3.25 2.84

= 64.12 / 75000 * 4000 * 95%

95% is the progress payment

1 VSP-6.3-01-CVL-003


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Basis of Budget for Structural WorkMonthly forecast for structural work is made based on plan for

structural fabrication & erection. The weightage of fabrication &

erection depends on the scope of work of the contractor.

If steel is free issue then the weightage is normally considered as 60 40

i.e. 60% fabrication & 40% erection. Example:

SL

NO

SPCIFIC

ATIONDESCRIPTION TOTAL APR'08 MAY'08 JUN'08 JUL'08


Structural Work Rs. in Cr. 16.65

Fabrication Ton 12700 650 628 506 451

Erection Ton 12700 100 143 130 123

Structural Work (Weighted average

considering 60% for fabrication

& 40% for erection)

Ton 12700 430 434 356 320

Budget Rs. in Cr. 0.45 0.46 0.37

= 16.65 / 12700 * 430 * 80%


= 650 * 60% + 100 * 40%

1

VSP-6.3-

01-STF-

001


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Basis of budget for equipmentMonthly forecast of equipment is based on terms of payment.

For progress payment of supply & erection monthly forecast is made

considering time schedule & using S curve formula which is as follows:

Y = [ 1 Sin {(X*180/Xn) + 90 } ] * 50 where Y = Percentage payment

(Cumulative) at a particular time (X) within the time schedule (Xn)

1 2 3 4 5

SL

NO

SPCIFICA

TION NO. DESCRIPTION

Rs. in

Cr.

Compl.

Time Start Finish Period APR'08 MAY'08 JUN'08 JUL'08 AUG'08


Supply & Erection of

electric Wagon Pusher &

Wagon Tippler

22.00 4

Equipment Supply 20.00 1 3 3 4.00 8.00 4.00Erection Testing &

Commissioning2.00 2 4 3 0.40 0.80 0.40

Budget (Rs. in Cr.) 4.00 8.40 4.80 0.40


1 VSP-6.3-

01-PRH-

001


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Expenditure Report

Orders placed on the parties are considered as commitments

made against which expenditure is monitored.

Each order is assigned with job code, party code and

responsibility code in order to have proper monitoring of the

actual expenditure. The typical codification system at VSP is

explained below:

(A) Job Code : Job code is a 6 digit numeric.

X X X X X X

Expansion Zone Number Serial Number

Example - 601001


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(B) Party Code : Party code is a 6 digit numeric.

X X X X X X

1 for Public Sector First alphabet Serial Number

2 for Private Sector of the agency3 for Small Scale Ind. name

4 for Foreign Agency

5 for Consortium

6 for others

Example Flsmidth Minerals Pvt. Ltd.

Part Code - 206004


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(C) Responsibility Code : 6 digit alpha numeric.

X X X X X X

Expansion Zone Number Serial Number 0 for item rate

1 for turnkey supply

2 for turnkey erection

Example : E01041


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Actual expenditure is booked on regular basis based on the

Payment details. At the end of the month the expenditure reportis prepared based on the actual payments made.

Formats for expenditure report are given in the following pages.


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Sl NoGovt. Approved Budget Heads

(PIB Heads)

Total

amount

sanctioned

(1)

Committm

ents made

till date

(2)

Exp. Upto

March '08

(3)

Jan.' 09

(4)

Expenditure

for the year

2008-09

(5)

Cumulative

expenditure

till date

(3+5)

(6)

A Plant Cost

1 Land & site development

2 Civil works

3 Structural works

4 Plant & Equipment

5 Erection charges incl.

Supervision & Training

6 DE, Consultancy services &

Project Management

B Other fixed investment

1 Spares

2 Start up expenses(Preliminary

pre- Operating expenses)

C Total fixed investment (A

+ B)

D Contingency

E Interest during

construction

F Development /

Expansion of Mine.

G Materials Received At

Stores

a) Reinforcement Steel

b) Structural Steel

H Total Capital Expenditure

VSP 6.3 MTPA - EXPANSION PROJECT

EXPENDITURE REPORT (Rs Crores)

SUMM OF COMMT & CAPITAL EXP FOR ORDERS RELEASED OF ALL ZONES FOR VSP EXPANSION PROJECT


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REPORT NO : 01

MONTH :January 2009

ALL ZONES FINANCIAL YEAR 2008-2009

STATUS AS ON 25-01-2009 RS. IN CRS.

ZONE ITEM DESCRIPTION/ ACTIVITY DESCRIPTION

ESTIMATED

VALUE

(UPDATED)

ORDER VALUEEXP UPTO

MAR'2008

Exp for

Jan'09

EXP FOR THE

YEAR 08-09

CUM EXP TILL

DATE

ZONE -01 RAW MATERIAL HANDLING SYSTEM (ZONE -I)

ZONE -02 SINTER PLANT (ZONE -02)

ZONE -03 BLAST FURNACE # 3 (ZONE - 03)ZONE -04 STEELMELT SHOP # 2 (ZONE - 04)

ZONE -05 LIME CALCINING PLANT / CRMP (ZONE - 05)

ZONE -06 WIRE ROD MILL # 2 (ZONE - 06)

ZONE -07 SEAMLESS TUBE PLANT (ZONE - 07)

ZONE -08 STRUCTURAL MILL (ZONE - 08)

ZONE -09 SPECIAL BAR MILL (ZONE - 09)

ZONE -10 THERMAL POWER PLANT & BLOWER HOUSE (ZONE -

10)

ZONE -11-I MADHARAM DOLOMITE MINE (ZONE 11-I)ZONE -11-II LIMESTONE MINE (ZONE-11-II)

ZONE -11-III MANGANESE MINE (ZONE-11-III)

ZONE -11-IV QUARTZITE MINE (ZONE-11-IV)

ZONE -12 POWER DISTRIBUTION SYSTEM (ZONE-12)

ZONE -13 UTILITY (ZONE-13)

ZONE -14 WATER SYSTEM (ZONE-14)

ZONE -15 WORKS TRANSPORT & OTHERS (ZONE-15)

ZONE -16 AIR SEPARATION PLANT (ZONE-16)

ZONE -17 POWER PLANT (ZONE-17)ZONE -18 REINFORCEMENT STEEL (ZONE-18)

ZONE -19 STRUCTURAL STEEL NON FLAT (ZONE-19)

ZONE -20 STRUCTURAL STEEL FLAT (ZONE-20)

ZONE -21 PROJECT CONSULTANCY (ZONE-21)

ZONE -22 OTHERS (ZONE-22)

ZONE -23 SPARES (ZONE-23)

ZONE -00 PRELIMINARY CONSTRUCTION WORK OF VSP (ZONE-

00)

TOTAL (ALL ZONES)

TOTAL (ALL ZONES)( WITH OUT SERVICE TAX)

SUMM. OF COMMT. & CAPITAL EXP. FOR ORDERS RELEASED OF ALL ZONES FOR VSP EXPANSION PROJECT


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RS. IN CRORE

BUDGET

2008-09 BUDGET ACTUAL BUDGET ACTUAL CUM. BUDGET CUM. ACTUAL

RMHS

I CIVIL

a VSP-6.3-01-CVL-003

b VSP-6.3-01-CVL-004

SUB TOTAL

II STRUCTURAL

a VSP-6.3-01-STF-001

b VSP-6.3-01-STF-002

SUB TOTAL

III EQUIPMENT SUPPLY

a VSP-6.3-01-PRH-005

b VSP-6.3-01-PRH-006

SUB TOTAL

TOTAL

ESTIMATED EXPENDITURE VS ACTUAL EXPENDITURE

For The Year 2008-09Jan-09 UPTO Jan-09

RS. IN CRORERS. IN CRORE RS. IN CRORE

SL. NO. DEPARTMENT PARTY NAME


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REPO

MONTH :Jan

FINANCIAL YEAR

R

STATUS AS ON 25-01-2009

SL

NO

SPCIFICAT

ION NO.

PACKAGE

DESCRIPTION

ESTIMATE

D VALUE

(UPDATED)

RESP.

CODE

JOB

CODEORDER REF NO

ORDER

RELEASED

DATE

PARTY NAMEPARTY

CODE

ORDER

VALUE

EXP

UPTO

MAR'08

Exp

for

Jan'09

EXP

FOR

THE

YEAR

08-09

VSP-6.3-01-

PRH-001

WAGON TIPPLER AND

CAR PUSHER

DE, and Supply of all

eqpt. Incl. Comm. & Ins

Spares

17.28 E01041 601017 VSP/CONT/S(100)/104/EXPN/1840

8 VSP-157

27-Sep-07 McNally Bharat

Engg. Co. Ltd.

513006 21.72 2.17 2.17

SERVICE TAX AND E

CESS

0.02 0.02

ESCALATION

Storage, Handling, ETC

of all eqpt. Incl. Comm.

Spares & Ins Spares

1.31 E01042 601018 VSP/CONT/S(100)/104/EXPN/1840

9 VSP-157

27-Sep-07 McNally Bharat

Engg. Co. Ltd.

513006 1.87 0.19 0.19

SERVICE TAX AND E

CESS

0.02 0.02

ESCALATION

Sub-Total (With

Service Tax & E Cess

and Escalation)

2.40 2.40

Sub-Total (Without


and Escalation)

18.59 2.36 2.36

PILING

VSP-6.3-01-

CVL-

001(R1)

Piling work for RMHS

(Part-Zone-1)

E01030 601001 VSP/CONT/EXPN

/57/2006-

07/17867 (DLOA)

23-Nov-06 VIJAY NIRMAN

CO.

222003 10.18 6.64

SERVICE TAX AND E

CESS

0.79

ESCALATION 0.12 0.05

SERVICE TAX AND E

CESS FOR

ESCALATION

0.02 0.01

Sub-Total (With


and Escalation)

7.57 0.05

Sub-Total (Without


and Escalation)

6.64

DETAILS OF COMMITMENT & CAPITAL EXPENDITURE FOR ORDERS RELEASED OF RMHS (ZONE-I) FOR VSP EXPANSION PROJ

R i d C t E ti t


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Revised Cost Estimate

With the commitments made and commitments yet to be

made Revised Cost Estimate is prepared.

To prepare RCE following are considered

(a) Actual commitments made upto date.

(b) Balance commitment yet to be made.

Revised Cost Estimate is compared with the Original

Sanctioned Cost. The cost over run is explained under the

following heads:

(a) Escalation from the base date.(b) Additional items / change in scope.

(c) Exchange rate variation.

A typical format is given in the next page


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(Rs. in Crore)

Sl.

No.

Item Description Original

Provision

Commit

ment

made

Order

No., Date

& Party

Change

Order to be

made

Fresh Order

to be placed

/ Sanctioned

under

process

Revised Cost

ZON

E-01

SPECIFICA

TION NO.

RAW MATERIAL

HANDLING SYSTEM

1 WAGON TIPPLER AND

CAR PUSHER

2 STOCK YARD

EQUIPMENT

3 CIVIL WORK

4 PILING

5 STRUCTURAL STEEL

WORK

6 PLANT ELECTRICS &

CONTROL SYSTEM

7 AUX. POWER WIRING

ETC.

8 WATER SYSTEM9 PLANT

TELECOMMUNICATION

SYSTEM

10 ADDITIONAL ITEMS

11 SCOPE CHANGE

12 QUANTITY CHANGE

13 EXCHANGE RATE

VARIATION

14 ESCALATIONTOTAL (RMHS)

Revised Cost Estimate


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THANK YOU

Documents

Cost Monitoring System