No: AEE(C)/2014-15/1 dt.25-8-2014

SUBMITTED 

SUB: ADOPTION OF NEW DATABOOK , NEW SCHEDULE OF RATES AND LMR JUSTIFICATION

REF:  1) Order No: 1/2010/ Fin Thiruvananthapuram dated 5-10-2010

2) B.O (FTD) No. 2033/2014 (DGC/AEE-II/Data & SoR/2014) Thiruvananthapuram

dated, 25. 07. 2014

3) G.O. (P) No: 36/2013/ PWD thiruvananthapuram dated 17-4-2013

4) No: 19 (1) CE (SZ)V/ 2014/1/30 Dated: 28-7-2014

5) Order No: 2/2010/ Fin Thiruvananthapuram dated 4-01-2010

6) CPWD website : http://cpwd.gov.in/

7) Kerala PWD website: http://www.keralapwd.gov.in/

8) KSEB Circular FA/Tax Cell/ 2014-15 dated 08-04-2014

This is to bring to the kind attention of the KSE Board regarding the need to adopt CPWD

databook, DSR multiplied by cost index of each area, and LMR (local market rate) justification

and issue a B.O. for the same.  

It is essential to adopt these practices that are currently followed in the Kerala State Government

PWD and other departments to enable smooth execution of works in the Kerala State Electricity

Board Limited

As per B.O cited under ref.2 above, the last two paras read as

“Having examined the matter in detail, sanction is hereby accorded to adopt CPWD Data

in  Kerala  State  Electricity  Board  Ltd  for  preparation  of  estimates  of  civil  works  where

mechanised work is not possible.

Sanction is also accorded to adopt CPWD SoR and National Building Code Guidelines in Kerala

State Electricity Board Ltd with prospectiveeffect. This shall be made applicable to civil and

electrical works with prospective effect.”

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The following points may be noted:

REGARDING DATA BOOK TO BE ADOPTED

1.      It may be noted that CPWD Data book contains data of most of the works commonly executed

and the mechanical means of execution of works is considered in the data, by including the rental

value of equipments used. Therefore there is no need to adopt this databook where mechanical

work is not possible, as it is wrongly assumed that the CPWD databook contains only data for

works that do not use mechanical means of execution. Therefore there is no need for separate

KSEB databook for mechanized works as the former takes care of these.

2.      It is essential for KSEB Ltd, being a public sector company, to adopt standard codes, databook

and practices followed in the State government. State government departments like the PWD

have already switched over to CPWD databook. Adoption of KSEB databook in preference to

CPWD databook leads to lot of confusion, legal issues and conflicts with the State government

authorities such as State vigilance, Chief Technical Examiner office etc.

3.      Only for those items of works that are not given in the CPWD databook, there is need to go for

adopting data from KSEB databook or other observed data. KSEB databook could be revised to

include only such items that are not present in the CPWD databook

4.      For treating the works of hydel projects and hilly areas, there is no need to have a separate

KSEB databook, because LMR (local market rate) justification provision for awarding works at

higher rates is permitted by the government.

REGARDING THE SCHEDULE OF RATES TO BE ADOPTED

1.      The B.O. under ref.2 above directs to adopt DSR (Delhi Schedule of Rates). The practice

followed in the State government departments is to multiply the DSR rates by the cost index

approved by the Chief Engineer, CPWD and published in the Kerala PWD website. It may

kindly be clarified and new BO issued regarding adoption of DSR multiplied by the cost index.

2.      Adoption of the practice of multiplying the DSR with the cost index, that is revised quarterly,

will eliminate the problem

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REGARDING LMR (Local Market Rates) JUSTIFICATION

If the tenderers quote above the schedule rates, more than 10%, then the practice in the State

government is to go for LMR justification and awarding the works. If this practice is adopted in

the KSEB Ltd. the present imbroglio of awarding works at tender excess beyond estimate would

cease.

There is no need to have a separate databook for hydel projects or for mechanized works. KSEB

Ltd can set an additional justification limit for such works and that will take care of it.

REGARDING ADDING PROVISION FOR SERVICE TAX IN WORK ESTIMATES

The KSEB Ltd has to pay service tax @12.36% for the services part of the works contract. For

original works 40% of total amount is taken for calculation of service tax, of which service

recipient is liable to an amount of 50% of the tax. This adds to the estimated cost of the works.

There is no clear directon yet whether to add this component of service tax is to be added to the

estimate for the works and there is confusion and likelihood of mis-interpretation in this regard.

Therefore, this aspect may be kindly clarified 

CONCLUSION

Many works recently tendered by the KSEB Ltd are not getting responses from tenderers

because the estimates rates were low compared to market rates; and ther was no provision for

awarding the works in excess of SOR 2012 rates. The problem would be solved by adoption of

cost index and LMR justification in KSEB Ltd.

If a Board Order that reads as follows, with necessary variations, is issued, it would certainly

solve the confusion and enable smooth work executions. A separate clarification on service tax

addition to work estimates may also be issued.

“It is clarified that, in future, estimates for Civil and Electrical works in KSEB Ltd. shall be

prepared based on CPWD specifications and Delhi Schedule of Rates only. In the estimate, rates

for DSR items shall be worked out by multiplying DSR item rate with applicable cost index factor

published by CPWD time to time. For Non DSR items, Observed Data approved by KSEB Ltd.

can be used.

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Tender excess above 10% over current estimate rate shall be allowed only with Local Market

Rate (LMR) justification. For this, LMR justification based on LMR published by Kerala PWD

Buildings Wing shall be prepared and the reasonableness of quoted rate be worked out.

Generally, allowable tender excess over current estimate rate shall be limitted to the rates

worked out based on LMR. 

For specialized works with difficult and restricted working conditions, additional justifications

shall be furnished to KSEB Ltd. for considering the tender acceptance proposal in excess of LMR

justified rate.”

Kozhikode

25 Aug 2014

Sreekumar B

Asst. Executive Engineer (Civil)

Transmission Circle, Kozhikode-27Encl: documents referred above 

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