Welcome to a discussion on

M.V. Raghu,,
Retd. Controller, KPTCL / CESC
Mysore
1
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.

2
 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.
Circular

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

3
 Documents required for calculation of PV
Circular
 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.
4
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

5
Bill Tracking System.
 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) Circular

 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.
6
 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.
7
 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.
8
 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

9
 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:
o DWA rates are available / similar materials are
supplied as per DWA.
o Certificate of necessity / justification by the Zonal
CEE / SEE / EEE for admitting PV is required
subject to approval of Work-slip / Variation by
Competent Authority.
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 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.

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 CONTROL CHART
Sl. Particulars
No.
1 Name of the work / Project
Description of Price Variation Bill (Supply,
2
Erection or Civil)
3 Name of the Material
Base Date as per DWA (Techno Commercial
4
Bid Opening Date)
5 Price Bid Opening Date

6 Date of LOI

12
 CONTROL CHART (Contd.)
Sl. No. Particulars

7 Date of Contract Agreement

8 Project Completion Date

Contractual Delivery Date as per PERT Chart

9
(Material Wise)
Inspection Offered Date (Material Wise)
10
(Readiness of the Material)

11 Schedule 2 (2 of 2)

Schedule 21 - Material sourced from outside

12
Karnataka.

13 IEEMA circular to be used

13
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

= (Ex-Works + Excise Duty) 5.5%

VAT
= (Ex-works+0.1036Ex)0.055
= Ex+0.1036Ex+(Ex+0.1036Ex)0.055
Amount
= Ex+0.1036Ex+0.055Ex+0.005698Ex

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

Amount = Ex(1.164298)

= Amount
Ex-Works
1.164298

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Calculation of Ex-Works price when quoted price is inclusive of
Taxes and Duties (10.36 ED;14.5% VAT)

= Quoted Price to be arrived (Excluding Taxes and

Ex-Works
Duties)

Excise Duty = 10.36% on Ex-Works

= (Ex-Works + Excise Duty) 14.5%

VAT
= (Ex-works+0.1036Ex)0.145
= Ex+0.1036Ex+(Ex+0.1036Ex)0.145
Amount
= Ex+0.1036Ex+0.145Ex+0.015022Ex

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

Amount = Ex(1.263622)

= Amount
Ex-Works
1.263622
15
 Materials for which PV is admissible
i. Power Transformers
Circular
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

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 POWER TRANSFORMER – 10 MVA & above AND
VOLTAGE 33 Kv ABOVE
 IEEMA formula:

 W.E.F. 01-06-2003 Circular

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 Circular

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

Circular
 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”

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Switchgear / Circuit Breaker above 36 KV
 IEEMA formula:

 W.E.F. 01-01-2002 Circular

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 Circular

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”

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 Switchgear / Circuit Breaker above 36 KV
Contd…

 IEEMA formula effective from: 01-06-2010

Circular

 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.

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 Lightning Arrestor
 IEEMA formula:
 W.E.F. 01-09-2001 Circular

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.

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 Transformer Oil
 IEEMA formula:
 W.E.F. 01-01-2000 Circular

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

 W.E.F. 01-07-2011 Circular

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.

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 STATION / MOUNTING STRUCUTRES /
TOWER PARTS
 IEEMA formula effective from: 01-01-2002 Circular

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)

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 STATION / MOUNTING STRUCUTRES Contd….

 IEEMA formula effective from: 01-07-2010 Circular

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)

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 STATION / MOUNTING STRUCUTRES Contd….

 IEEMA formula effective from: 01-04-2014 Circular

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)

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 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.

25
 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 Circular

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)

26
 TRANSMISSION LINE ACCESSORIES
AND HARD WARE Contd. ….
 IEEMA formula effective from: 01-09-2008 Circular

“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.

27
 TRANSMISSION LINE ACCESSORIES
AND HARD WARE Contd. ….
 IEEMA formula effective from: 01-09-2008 Circular

“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)

28
 TRANSMISSION LINE ACCESSORIES
AND HARD WARE Contd. ….
 IEEMA formula effective from: 01-03-2011 Circular

“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.

29
 TRANSMISSION LINE ACCESSORIES
AND HARD WARE Contd. ….
 IEEMA formula effective from: 01-03-2011 Circular

“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)

30
 STATION BATTERIES

 IEEMA formula:

W.E.F. 01-01-2001 Circular

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

Same formula continues as on date.

31
 BATTERY CHARGER

 IEEMA formula:

W.E.F. 01-01-2002 Circular

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

Same formula continues as on date.

32
 INSTRUMENT TRANSFORMERS – CT / PT / VT

IEEMA formula effective from: 01-06-2005 Circular

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)

33
INSTRUMENT TRANSFORMERS – CT / PT / VT Contd.
…
IEEMA formula effective from: 01-06-2010 Circular

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.

34
 INSULATORS

 IEEMA formula:

W.E.F. 01-04-2003 Circular

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

Same formula continues as on date.

35
 CIVIL WORKS AND ERECTION

 IEEMA formula effective from: 01-04-2005 Circular

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)

36
 CIVIL WORKS AND ERECTION Contd. …

IEEMA formula effective from: 01-06-2010 Circular

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.

37
 PVC and XLPE Insulated Cables
 W.e.f. 01-01-2001 Circular

 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)

38
 Insulated Cables Circular

 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.

39
 Conductor and Ground Wire Circular

 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)

40
 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
EXERCISE

46
Thank you

47