1

M.V. Raghu,,

Retd. Controller, KPTCL / CESC

Mysore

Welcome to a discussion on

2

What is Price Variation?

As per the terms of the contract, amounts

payable / recoverable from the contractor /

vendor consequent to fluctuation in the WPI

(Wholesale Price Index) (inflation / deflation) of

the raw materials used in manufacture of

materials supplied against work award /

purchase order.

3

When price variation is applicable?

Projects costing Rs.100 Lakhs and above & the period of completion is 6 months and above. Order No. KPTCL / B37 / 6426 / 2005-06 dt. 05-10-2005.

All projects costing Rs.50 Lakhs and above & the period of completion is 6 months and above. Order No. KPTCL / CS / B37 / 5966 / 2006-07 dt. 05-03-2009.

As per terms and conditions of the contract the rates quoted are not on “FIRM” basis.

Circular

Circular

4

Documents required for calculation of PV

DWA (Detailed Work Award) with special reference to

Schedule 2 (2 of 2) for taxes and duties, Schedule 21

for materials sourced out side the State of Karnataka.

(Scanned copy)

IEEMA (Indian Electrical and Electronics

Manufacturers Association) / CACMAI (Cable and

Conductor Manufacturers Association of India)

circulars issued from time to time.

IEEMA / CACMAI Price Indices applicable to the

case.

Circular

5

Documents required for calculation of PV (Contd.)

PERT / Activity Chart.

Date of delivery of materials / Date of materials ready for delivery / Contractual Deliver Date / Inspection offered date (with documents to prove / substantiate the claim).

Price Variation Bill.

PV Bill must have been assigned with B.R. No. and Date

Details of the bill should have been uploaded in KPTCL Bill Tracking System.

6

Calculation of PV

Arrive at Ex-works price from the quoted price (Excluding Taxes and Duties) (Refer schedule 2 (2 of 2) for percentage of taxes and duties quoted by the firm)

Base date to be considered is, Techno Commercial Bid Opening Date.

Contractual Delivery Date as per PERT Chart (Material Wise)

Inspection Offered Date (Material Wise) (Readiness of the Material)

Refer Schedule 21 for confirming whether materials are actually sourced from outside the state or not for assessing the taxes.

Circular

7

Calculation of PV (Contd.)

Inspection call letter date or Contractual date of delivery which ever is earlier is to be considered as per IEEMA circulars in following cases:

– Materials supplied within the contractual delivery date.

– Materials supplied beyond the contractual period but materials are ready for inspection before contractual delivery date.

– Quantity as per DWA and the actual quantity supplied which ever is less.

8

Calculation of PV (Contd.)

In the following cases PV is to be admitted in

accordance with circulars issued from

Corporate Office from time to time.

(Circular)

– Materials supplied beyond contractual deliver date

and ready for inspection after contractual delivery

date with PV on the lower side.

– Materials supplied beyond contractual deliver date

and ready for inspection after contractual delivery

date with PV on the higher side.

9

Calculation of PV (Contd.)

Whether PV is admissible for Additional Quantity / Revised Quantity / Non-DWA Quantity?

Answer is “YES” as per Circular No. KPTCL / B8 / 2344 / 09-10(9) dt. 15-11-2010. (Circular)

Dates to be considered for Additional / Revised Qty. of DWA materials:

(A) For Supply Portion

• Base Date will be Techno Commercial bid opening date

• Contractual Delivery Date will be earlier of the following:

Date of inspection call letter

Date of Dispatch Instructions given

Actual Date of Supply

10

Calculation of PV (Contd.)

(B) For Erection / Civil Portion

• Base Date will be Techno Commercial bid opening date

• Contractual Completion Date will be the date indicated in the letter of Chief Engineer concerned

Note:

oDWA rates are available / similar materials are supplied as per DWA.

oCertificate of necessity / justification by the Zonal CEE / SEE / EEE for admitting PV is required subject to approval of Work-slip / Variation by Competent Authority.

11

Calculation of PV (Contd.)

For Non-DWA materials:

(A) For Supply Portion: • Date on which Turnkey agency has been intimated by KPTCL or

actual date of supply whichever is earlier is treated as “Base Date”

• “Contractual Delivery Date” will be the actual date of supply.

(B) Erection / Civil Portion • Date on which Turnkey agency has been intimated by KPTCL /

approval of drawing / work slip / variation statement or actual completion of work which ever is earlier.

• “The Contractual Completion Date” will be the date intimated by the KPTCL to complete the work to Turnkey Agency.

12

CONTROL CHART

Sl.

No.

Particulars

1 Name of the work / Project

2 Description of Price Variation Bill (Supply,

Erection or Civil)

3 Name of the Material

4 Base Date as per DWA (Techno Commercial

Bid Opening Date)

5 Price Bid Opening Date

6 Date of LOI

13

CONTROL CHART (Contd.)

Sl. No. Particulars

7 Date of Contract Agreement

8 Project Completion Date

9 Contractual Delivery Date as per PERT Chart

(Material Wise)

10 Inspection Offered Date (Material Wise)

(Readiness of the Material)

11 Schedule 2 (2 of 2)

12 Schedule 21 - Material sourced from outside

Karnataka.

13 IEEMA circular to be used

14

Calculation of Ex-Works price when quoted price is inclusive of

Taxes and Duties (10.36 ED;5.5% VAT) (Tax Table)

Ex-Works = Quoted Price to be arrived (Excluding Taxes and Duties)

Excise Duty = 10.36% on Ex-Works

VAT = (Ex-Works + Excise Duty) 5.5%

= (Ex-works+0.1036Ex)0.055

Amount = Ex+0.1036Ex+(Ex+0.1036Ex)0.055

= Ex+0.1036Ex+0.055Ex+0.005698Ex

Amount = Ex(1+0.1036+0.055+0.005698)

Amount = Ex(1.164298)

Ex-Works = Amount

1.164298

15

Calculation of Ex-Works price when quoted price is inclusive of

Taxes and Duties (10.36 ED;14.5% VAT)

Ex-Works = Quoted Price to be arrived (Excluding Taxes and

Duties)

Excise Duty = 10.36% on Ex-Works

VAT = (Ex-Works + Excise Duty) 14.5%

= (Ex-works+0.1036Ex)0.145

Amount = Ex+0.1036Ex+(Ex+0.1036Ex)0.145

= Ex+0.1036Ex+0.145Ex+0.015022Ex

Amount = Ex(1+0.1036+0.145+0.015022)

Amount = Ex(1.263622)

Ex-Works = Amount

1.263622

16

Materials for which PV is admissible i. Power Transformers

ii. Circuit Breakers / Switchgears

iii. Conductors and Ground Wires (CACMAI)

iv. Lightening Arrestors

v. Transformer Oil

vi. Tower Parts / Station Structures

vii. Control Cables

viii. HT / EHT U.G. Cable

ix. Conductor Hardware

x. Battery

xi. Battery Chargers

xii. Instrument Transformers

xiii. Insulators

xiv. Civil works

Circular

17

POWER TRANSFORMER – 10 MVA & above AND

VOLTAGE 33 Kv ABOVE

IEEMA formula:

W.E.F. 01-06-2003

P=P0/100(13+23(C/C0)+28(ES/ES0)+7(IS/IS0)+7(IM/IM0)+7(TB/TB0)+15(W/W0)

W.E.F. 01-01-2009

P=P0/100(13+23(C/C0)+28(ES/ES0)+7(IS/IS0)+7(IM/IM0)+7(TO/TO0)+15(W/W0)

o TB (TOBS) is substituted by TO (Transformer Oil).

o Except for this change the formula remains the same.

o Though the formula remains the same months to be considered is changed

W.E.F. 01-06-2010

P=P0/100(13+23(C/C0)+28(ES/ES0)+7(IS/IS0)+7(IM/IM0)+7(TO/TO0)+15(W/W0)

o IS hither too which was “Iron & Steel” is changed as IS “Ferrous Metals”

Circular

Circular

Circular

18

Switchgear / Circuit Breaker above 36 KV

IEEMA formula:

W.E.F. 01-01-2002

P=P0/100(25+17(IS/IS0)+18(C/C0)+10(Al/Al0)+13(In/In0)+17(W/W0)

W.E.F. 01-06-2007

P=P0/100(19+17(IS/IS0)+17(C/C0)+13(AL/AL0)+19(IN/IN0)+15(W/W0)

“C” Price of Electrolytic copper wire bars is substituted by Average LME settlement price of copper wire bars. (months to be reckoned is also changed)

“In – price of epoxy resin” is replaced by “IN- IEEMA index for Insulator”

Circular

Circular

19

Switchgear / Circuit Breaker above 36 KV

Contd…

IEEMA formula effective from: 01-06-2010

P=P0/100(19+17(IS/IS0)+17(C/C0)+13(AL/AL0)+19(IN/IN0)+15(W/W0)

IS hither too which was “Iron & Steel” is changed as IS

“Ferrous Metals”

If the project commenced prior to 01-06-2010 but

continued after this date this formula is to be used.

Circular

20

Lightning Arrestor

IEEMA formula:

W.E.F. 01-09-2001

P=P0/100(20+15(ZN/ZN0)+15(CO/CO0)+10(BI/BI0)+10(BC/BC0)+10(FP/FP0)+15(W/W0)+5(AL/AL0)

W.E.F. 01-06-2010

There is no change in the formula.

FP hither too which was “whole sale price index for Fuel, Power, Light and Lubricant” is changed as FP “Power and Light”

If the project commenced prior to 01-06-2010 but continued after this date revised WPI is to be used in the formula.

Circular

21

Transformer Oil

IEEMA formula:

W.E.F. 01-01-2000

P = P0 + 1.2 (TB - TB0) + 4.8 (D - D0)

W.E.F. 01-07-2011

There is no change in the formula.

Values for T.O.B.S. is revised

If the supply falls beyond 01-07-2011, then P is calculated up to July 2011 using 01-01-2000 formula and the value so obtained shall be used as P0 in the formula using new values given.

Circular

Circular

22

STATION / MOUNTING STRUCUTRES /

TOWER PARTS

IEEMA formula effective from: 01-01-2002

In respect of Transmission Line Towers using both Heavy and Lighter Angles:

P=P0/100(15+18(HA/HA0)+40(LA/LA0)+16(Zn/Zn0)+11(W/W0)

In respect of Transmission Line Towers using Only Heavy Angles:

P=P0/100(15+58(HA/HA0)+16(Zn/Zn0)+11(W/W0)

In respect of Transmission Line Towers using Only Lighter Angles:

P=P0/100(15+58(LA/LA0)+16(Zn/Zn0)+11(W/W0)

Circular

23

STATION / MOUNTING STRUCUTRES Contd….

IEEMA formula effective from: 01-07-2010

Consequent to substituting HA - Heavy Angles with SBL – Blooms and LA – Lighter Angles with SBI – Billets IEEMA formula has been changed

In respect of Transmission Line Towers using both Heavy and Lighter Angles:

P=P0/100(11+32(SBL/SBL0)+25(SBI/SBI0)+9(Zn/Zn0)+23(W/W0)

In respect of Transmission Line Towers using Only Heavy Angles:

P=P0/100(11+57(SBL/SBL0)+9(Zn/Zn0)+23(W/W0)

In respect of Transmission Line Towers using Only Lighter Angles:

P=P0/100(11+57(SBI/SBI0)+9(Zn/Zn0)+23(W/W0)

Circular

24

STATION / MOUNTING STRUCUTRES Contd….

IEEMA formula effective from: 01-04-2014

Consequent to substituting SBL – Blooms with SBLR – Steel Blooms Retail and SBI – Billets with SBIR – Steel Billets Retail IEEMA formula has been changed w.e.f. 01-04-2014

In respect of Transmission Line Towers using both Heavy and Lighter Angles:

P=P0/100(11+32(SBLR/SBLR0)+25(SBIR/SBIR0)+9(Zn/Zn0)+23(W/W0)

In respect of Transmission Line Towers using Only Heavy Angles:

P=P0/100(11+57(SBLR/SBLR0)+9(Zn/Zn0)+23(W/W0)

In respect of Transmission Line Towers using Only Lighter Angles:

P=P0/100(11+57(SBIR/SBIR0)+9(Zn/Zn0)+23(W/W0)

Circular

25

STATION / MOUNTING STRUCUTRES Contd….

IEEMA formula effective from: 01-04-2014

Care has to be exercised while calculating PV when the project has

commenced before 01-04-2014 and supply has been done after this date

as per PERT.

In such an event calculate “P” using the IEEMA formula effective from 1st

July 2010 up to April 2014. Then substitute the value of “P” so arrived as

“P0” in the formula effective from 01-04-2014.

26

TRANSMISSION LINE ACCESSORIES

AND HARD WARE

As on date IEEMA formulae for this has been revised three times

IEEMA formula effective from: 01-01-2001

In respect of Accessories and Hardware using both Aluminum and Steel:

P=P0/100(20+40(AL/AL0)+5(Zn/Zn0)+20(Fe/Fe0)+15(W/W0)

In respect of Accessories and Hardware using only Aluminum:

P=P0/100(20+65(AL/AL0)+15(W/W0)

In respect of Accessories and Hardware using only Steel: P=P0/100(20+58(Fe/Fe0)+7(Zn/Zn0)+15(W/W0)

Circular

27

TRANSMISSION LINE ACCESSORIES

AND HARD WARE Contd. ….

IEEMA formula effective from: 01-09-2008

“Fe – whole sale price index for Iron & Steel has been substituted with “LA –

Lighter Angles”

Consequent to this the IEEMA formula has also been changed.

Care has to be exercised while calculating PV when the project has

commenced before 01-09-2008 and supply has been done after this date

as per PERT.

In such an event calculate “P” using the IEEMA formula shown on the

previous slide up to September 2008. Then substitute the value of “P” so

arrived as “P0” in the formula effective from 01-09-2008.

Circular

28

TRANSMISSION LINE ACCESSORIES

AND HARD WARE Contd. ….

IEEMA formula effective from: 01-09-2008

“Fe – whole sale price index for Iron & Steel has been substituted

with “LA – Lighter Angles”

In respect of Accessories and Hardware using both Aluminum and Steel:

P=P0/100(20+40(AL/AL0)+5(Zn/Zn0)+20(LA/LA0)+15(W/W0)

In respect of Accessories and Hardware using only Aluminum:

P=P0/100(20+65(AL/AL0)+15(W/W0)

In respect of Accessories and Hardware using only Steel: P=P0/100(20+58(LA/LA0)+7(Zn/Zn0)+15(W/W0)

Circular

29

TRANSMISSION LINE ACCESSORIES

AND HARD WARE Contd. ….

IEEMA formula effective from: 01-03-2011

“LA – Lighter Angles” has been substituted with “SBI – Steel Billets”

Consequent to this the IEEMA formula has also been changed.

Care has to be exercised while calculating PV when the project has

commenced before 01-03-2011 and supply has been done after this date

as per PERT.

In such an event calculate “P” using the IEEMA formula shown on the

previous slide up to March 2011. Then substitute the value of “P” so

arrived as “P0” in the formula effective from 01-03-2011.

Circular

30

TRANSMISSION LINE ACCESSORIES

AND HARD WARE Contd. ….

IEEMA formula effective from: 01-03-2011

“LA – Lighter Angles” has been substituted with “SBI – Steel Billets”

In respect of Accessories and Hardware using both Aluminum and Steel:

P=P0/100(20+40(AL/AL0)+5(Zn/Zn0)+20(SBI/SBI0)+15(W/W0)

In respect of Accessories and Hardware using only Aluminum:

P=P0/100(20+65(AL/AL0)+15(W/W0)

In respect of Accessories and Hardware using only Steel: P=P0/100(20+58(SBI/SBI0)+7(Zn/Zn0)+15(W/W0)

Circular

31

STATION BATTERIES

IEEMA formula:

W.E.F. 01-01-2001

P=P0/100(40+30(LD/LD0)+30(W/W0)

Same formula continues as on date.

Circular

32

BATTERY CHARGER

IEEMA formula:

W.E.F. 01-01-2002

P=P0/100(20+50(IN-BTR-CHRG/IN0-BTR-CHRG)+30(W/W0)

Same formula continues as on date.

Circular

33

INSTRUMENT TRANSFORMERS – CT / PT / VT

IEEMA formula effective from: 01-06-2005

In respect of Instrument Transformers BELOW 72.5 KV:

P= P0/100 (18 +18(C/C0) +20(ES/ES0) +10(IS/IS0) +12(ER/ER0)

+9(TB/TB0) +13(W/W0)

In respect of Instrument Transformers ABOVE 72.5 KV:

P= P0/100 (18 +13(C/C0) +12(ES/ES0) +12(IS/IS0) +23(IM/IM0)

+6(TB/TB0) +16(W/W0)

Circular

34

INSTRUMENT TRANSFORMERS – CT / PT / VT Contd.

…

IEEMA formula effective from: 01-06-2010

There is no change in the formula.

However “IS- Whole sale price index for iron & steel” has

been replaced by “IS-Ferrous Metals”

If the contractual delivery date is beyond 01-06-2010

substitute IEEMA indices in the formula with values of

“FERROUS METALS” for IS.

Circular

35

INSULATORS

IEEMA formula:

W.E.F. 01-04-2003

P=P0/100 (15 +5(Zn/Zn0) +53(IN-INSLR/IN0-INSLR) +27(W/W0)

Same formula continues as on date.

Circular

36

CIVIL WORKS AND ERECTION

IEEMA formula effective from: 01-04-2005

In respect of Concreting:

P=P0/100 (20 +20(HSD/HSD0) +30(C/C0) +20(SC/SC0) +10(W/W0)

In respect of Reinforced and other steel works:

P=P0/100 (20 +65(IS/IS0) +10(HSD/HSD0) +5(W/W0)

In respect of Erection :

P=P0/100 (20 +22(HSD/HSD0) +58(W/W0)

Circular

37

CIVIL WORKS AND ERECTION Contd. …

IEEMA formula effective from: 01-06-2010

There is no change in the formula.

However Indices in respect of Cement & Lime, Structural

Clay, HSD have been changed.

If the contractual delivery date is beyond 01-06-2010

substitute IEEMA indices in the formula with new

values.

Circular

38

PVC and XLPE Insulated Cables

W.e.f. 01-01-2001 Formula (A) : For aluminium conductor PVC insulated cables.

P = Po+ AIF (AI - Alo) + CCFAI (CC - CCo)

Formula (B) : For aluminium conductor PILC cables. P = Po+ AIF (AI - Alo) + PbF (Pb - Pbo)

Formula (C) : For copper conductor PVC insulated cables. P = Po+ CuF (Cu - CUD)+ CCFCu (CC - CCo)

Formula (D) : For steel armoured PVC insulated copper control cables P = Po+ CuF (Cu - CUD)+ CCFCu (CC - CCo) + FeF (Fe - Feo)

Circular

39

Insulated Cables

W.e.f. 01-01-2007

Even though the formula remains the same,

months to be reckoned have been changed.

New variation factors have been introduced.

Circular

40

Conductor and Ground Wire PV formula for ACSR Conductor:

At present the formula will be as per the DWA of the concerned work to be followed:

For example formulae from one of the DWA is as follows:-

P = P0 + K1 (Ar – AO) + K2 (Sr – SO)

For All Aluminum Conductors

P= P0 + ALF (AL-AL0)

For All Aluminum Alloy Conductors

P= P0 + ALF (ALY-ALY0)

For ACSR Conductors

P= P0 +ALF(AL-AL0) + FeF (Fe –Fe0)

PV formula for Ground Wire:

P = (P0 * 0.20) + 0.70(A1/A0) + 0.10(L1/L0)

Circular

Applicability of VAT

for different materials Transformer, CT, PT, NCT, Transmission Line Towers,

Cable / HT xlpe, Instrument Transformer, Aluminum

conductor / GI wire, GI flat VAT = 5.5 %

VAT for other materials - 14.5 %

41

ACSR conductor Accessories &

HARDWARE – Material Content

Vibration Damper, T & S clamp, Post insulator

clamp, PG clamp, MSC joint has Steel &

aluminum content

Pre formed Armored Rods, Repair Sleeve has

only aluminum content

Tension clamp, Suspension clamp, PG clamp,

MSC joint, Hardware relating to ground wire

has only STEEL content

42

TRANSMISSION LINE TOWERS

where Heavy Angles are used

(1) Stubs of normal 220 KV

(2) 66kv Stubs of Narrow Base / 220 kv Stubs

of Narrow Base Tower

(3) stubs of Multi voltage multi circuit Towers

43

TRANSMISSION LINE TOWERS

where Heavy and Lighter Angles are used

(1) Towers of 220kv & Towers of narrow base

except their Stubs

44

TRANSMISSION LINE TOWERS where only Lighter Angles are used

(1) Stubs & towers of 66 KV & Station

structure such as 2T1 & 2T2, 6T1 & 6T2,

Mounting structure

45

46

EXERCISE

47

Thank you