EPC - 2020 year SCR LDCE question for 5 marks

 

EPC

§      EPC stands for Engineering, Procurement & Construction

§      Also known as Turnkey project (Turn of the Key)

§      A new and prominent form of Contract Agreement in Construction industry.

§      Key feature: To execute and deliver the Project (from Planning to Completion in all respects) within Agreed time and Budget.

§      In a nutshell, EPC Contractor will carry out:

A.      Carry out the detailed Engineering Design of the Project.,

B.      Procure all the Equipments and Material for construction of the said Project.,

C.      then, Construct the Project and Deliver to their Client.

§      Usually in EPC Contracts, the Client employs PMC - Project Management Consultant to supervise the work. (Click here to access the article on PMC)

Need of EPC in Indian Railways

§      In Conventional Rate Contracts (present Works Contracts), the usual drawbacks are

A.      Delay in Survey

B.      Delay in preparation of Estimates

C.      Delayed Measurements

D.      Inadequate funds

E.       Cost over runs

F.       Time over runs

G.     Disputes on various issues with Contractors

§      To address all the above issues, Railway Board have proposed a Model EPC Agreement, which is released recently.

§      Click here for Model EPC Agreement

Salient features of Model EPC Agreement of Indian Railways

ü  Lump sum Contract Price (subject to Price Variation clause)

ü  Within Time

ü  Damages due to delay i.e., 0.05 % of Contract Price for one day delay.

ü  Maximum damages are not to exceed 10 % of Contract Price.  That means, maximum delay is 200 days ( 200 x 0.05 = 10)

ü  Assigned responsibility for Investigations, Design & Construction to the EPC Contractor

ü   Transferring the Construction Risk to the EPC Contractor.

ü  Payments are linked to the Specific Stages of Construction. (unlike individual measurements like in existing rate contracts/Works contracts)

ü  Defect Liability Period  - 2 years

ü  Bid Security (Replacing EMD )

ü  Performance Security ( May be replacing Security Deposit and Performance Guarantee)

Examples of EPC in Indian Railways / Transport sector.

1.       RE - Railway Electrification Project - 781 Kms in Konkan Railway given to L & T in the year 2017.

2.       Delhi Metro Railway Construction

3.       Construction of Railway Bridge in Jammu - Udhampur Railway Link

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Abbreviations on Traffic / Commercial / Operating

 

Abbreviations on Traffic / Commercial / Operating 

SN	Abbreviation	Expansion
1	LTTC	Long-Term Tariff Contract
2	TEFD	Traditional Empty Flow Direction
3	GFR	Gross Freight Revenue
4	RTT	Round Trip Tariff
5	TAC	Terminal Access Charge
6	CRT	Container Rail Terminal
7	TEU	Twenty-foot Equivalent Unt
8	PCC	Permissible Carrying Capacity
9	NMG rake	New Modified Goods rake
10	EOL	Engine On Load
11	RMC	Railway Material Consignment
12	e-RD	electronic Registration (of Wagons)  of Demand
13	e-RR	electronic (Transmission of) - Railway Receipt
14	TMS	Terminal Management System
15	AFTO	Automobile Freight Train Operator
16	CRT	Container Rail Terminal

Buildings and Rents

 

Buildings & Rents  

Source: Chapter 19 of Engineering Code 

• No employee has any right to be provided with Quarters 

• Quarters provided by Railways - The following circumstances 

1. Where conditions are such that Private enterprise does not adequately meet the demand for housing the staff. 

2. It is necessary for special reasons to provide Quarters for certain staff near to their work (for example: staff working in remote location Railway Stations)  

• GM - Can divide the Quarters into separate classes as per the standard of accommodation approved for various classes of staff. 

• Railway Board - Have the power to prescribe the scale of accommodation and the unit cost of each class of quarters.  

• Motor garages - Should not as a rule be provided in staff quarters. Allowed only in exceptional cases i.e., essential in the interest of the official's work. In such cases, the cost of garages should be added to the capital cost of the quarters to assess the Rent.  

• Temporary Garages - The cost should not exceed Rs.10,000 /-

• Assessed Rent of class of Quarters - 6% of the Capital cost of all the Quarters of the particular class. 

• Rent - Officers Quarters - Floor Area basis 

• Rent - Staff Quarters - Floor Area basis (wherever possible) 

• Rent - Assessed once in 5 years 

• Rent - To work out the details, 2 years is allowed.

• Example: The Rent worked out based on the cost as on 31.03.2021 will be effected from 01.04.2023.  

•  GM/DRM - Have full powers to incur the expenditure on Repairs to the Quarters. (Previously Rs.1 Lakh on Quarter subject to Rs.30 Lakhs per Annum.  Now it is deleted) 

• Leased and Requisitioned Buildings - The rent paid to the Landlord should be treated as Assessed Rent 

• The Total Cost of the Quarters: 

  Inclusions: 

1. The entire cost of construction irrespective of the source of finance 

2. Sanitary fittings

3. Water Supply fittings

4. Electric Installation & Fittings 

Exclusions: 

1. Cost of Land 

2. Development of Land (Raising, Levelling, Dressing, Construction of Revetments, retaining walls, compound walls, fences and gates, Approach Roads, Sewerage, Street lighting, Water supply arrangements, Over Head Tank, Transformer, etc) 

• Electric Bulbs:  First cost from Railway Funds.  Subsequent replacements are chargeable to the Occupants. 

• Provision of other special installations and fittings such as Heating installations, Electric Lifts, Refrigerators, and Furniture  - Railway Board prior permission is required. 

• Hire Charges for Furniture  

• 14% per annum for Durable articles - Beds, Almirahs, Chairs, Tables etc 

 

• 24.75% per annum for Non Durable articles - Door mats, curtains, mattresses, durries (carpets), chicks (stools), etc  

Obligation of Tenants:  

1. Any additions or alterations to quarters with permission of the Executive Engineer in charge only.

2. Keep their Quarters in a clean and wholesome state. 

Service Buildings: 

• Examples: Railway Stations, Offices, Depots, Workshops, Running Rooms, Guest Houses for Officers and subordinate staff 

• No Rent is chargeable 

• Temporary use of Rest houses etc as Residence -  DRM has powers 

• No Rent  - Accommodation provided for the Officers of Government Inspectors of Railways or for Statutory Audit Officers  

List of Buildings: 

 

• Maintaining a complete and up-to-date list of all Buildings 

• Both Residential and Service 

• Form: E 1977 

• Division wise 

• Reviewed by the Divisional Engineer once in every 3 Months  

Rent Rolls:   

• Prepared in Triplicate (Personnel Dept, Accounts Dept and Office Copy)

• Prepared on the beginning of the Financial Year i.e., 1st April 

• Information of Quarters, Occupants, etc 

• Form: Chapter 16-A of the Engineering Code 

Key Points for MCQ: 

1. Buildings & Rents - Chapter 19 of the Engineering Code 

2. No employee has any right to be provided with Quarters 

3.  Assessed Rent of class of Quarters - 6% of the Capital cost of all the Quarters of the particular class. (whether the Total cost is charged to Capital or any other Source of Finance)  

4. Rent - Assessed once in 5 years 

5. Rent - To work out the details, 2 years is allowed.

6. Example: The Rent worked out based on the cost as on 31.03.2021 will be effected from 01.04.2023.  

7. Rent - Officers Quarters - Floor Area basis 

8. Rent - Staff Quarters - Floor Area basis (wherever possible) 

9. GM/DRM - Have full powers to incur the expenditure on Repairs to the Quarters. 

10.  Temporary Garages - The cost should not exceed Rs.10,000 /- 

11.  Electric Bulbs:  First cost from Railway Funds.  Subsequent replacements are chargeable to the Occupants.  

12. Hire Charges: 14% per annum for Durable articles - Beds, Almirahs, Chairs, Tables etc  

13. Hire Charges: 24.75% per annum for Non Durable articles - Door mats, curtains, mattresses, durries (carpets), chicks (stools), etc  

14. Rent is not chargeable to Service Buildings like Stations, Offices, Workshops etc 

15. Temporary use of Rest houses etc as Residence -  DRM has powers 

16. No Rent  - Accommodation provided for the Officers of Government Inspectors of Railways or for Statutory Audit Officers  

17. Form: E 1977 - List of Buildings 

18. List of Buildings - Reviewed every 3 months. 

19.  Rent Rolls - Prepared in Triplicate (Personnel Dept, Accounts Dept and Office Copy) 

20. Rent Rolls - Prepared at the beginning of the Financial Year i.e., 1st April 

End