Estimates and Check on Estimates
CHAPTER VII
ESTIMATES
Kinds of Estimates | |
The Abstract Estimate | |
Detailed Estimates | |
The Statement showing Details of Estimated Cost of Works | |
Details of Cost of Permanent Way Material | |
The outer sheet of Open Line Estimates | |
Revised Estimate | |
The Project Abstract Estimate | |
The Construction Estimate | |
Estimate of Junction Arrangements | |
Completion Estimate | |
Estimate for Railway Project Scope | |
Rolling Stock Estimate | |
Indirect charges | |
Commencement of Construction | |
Estimates of Open Line Works Detailed Estimates in support of Abstract Estimate | |
Report and Justification | |
Specification | |
Rates | |
Provision for contingencies | |
Schedule of Rates | |
Standard Specification | |
Covering Letter for Estimates | |
Estimates for Deposit Works | |
General Rules Applicable to AII Estimates Design and Execution | |
Works executed on Contract | |
Units of Measurements | |
Units of Rate | |
Drawing | |
Verification of Estimate | |
Propriety of Expenditure | |
Incidence and Classification of Charges | |
Competency of Sanction | |
Grouping of Works | |
Subsidiary points to be checked | |
Certificate of Accounts Verification | |
Sanction to Estimate | |
Currency of Sanction | |
Scope of the sanction to an Estimate | |
759. | Register of Estimates |
1. What is an Estimate?
Estimate: An Estimate is a statement, showing the items of work, materials, required with its cost and labour and other charges for carrying out a particular work. There are seven kinds of estimates prepared on railway at different stages and for different purposes.
2. Why and how is an estimate prepared?
An estimate is prepared to arrive at approximate total expenditure required to carry out a particular work and also to get an idea of the expenditure to be incurred on a work in order to obtain the sanction of the competent authority and also to see that the work is financially justified. Through the estimate the authority competent to give administrative approval to the expenditure proposed to be incurred is determined who after thorough examination as to its necessity, utility and financial prospects, is also able to find out if funds are available for the work and when sanctioned , is to control expenditure against the same.
There are seven kinds of estimates prepared on railway at different stages and for different purposes. Different forms are prescribed for them. In the estimate, items of work are shown, then material required for the same along with its cost and then labour and other charges are shown. The allocation is also shown. Report and justification for a work are also given at the bottom of an estimate. Remarks of the Accounts officer are also given.
3. For what works estimates need be prepared?
All proposals for,
- The construction of new works or purchase of new assets,
- The renewals and replacements of existing works or assets chargeable to DRF/DF/RSF/SRSF and Capital Fund when estimated to cost more than Rs.50,000/-,
- The renewals and replacements of existing works or assets chargeable to Revenue when estimated to cost more than Rs.2 lakhs,
- The scrapping, dismantlement or abandonment of existing works or assets,
- Temporary and experimental works,
- Renewals of ballast,
should, ordinarily be scrutinized by the authority competent to sanction them before any expenditure or liability is incurred thereon. This scrutiny is exercised through what are called Estimates for the works.
4. Name the different kinds of Estimates prepared for works on Railways?
The following are the different types of Estimates prepared for works on Railways:
For Open Line Works:-
(a) Abstract Estimates.
(b) Detailed Estimates.
(c) Supplementary Estimates.
(d) Revised Estimates.
For Construction of New Line Projects:-
(e) Project Abstract Estimates.
(f) Construction Estimates.
(g) Completion Estimates.
5. When can a work be commenced without Estimate?
(i) Works which are considered to be urgently necessary to safeguard life or property or to repair a damage to a line caused by flood, accident or other unforeseen contingencies, so as to restore or maintain through communications.
(ii) a) For "New Minor Works" costing Rs.50,000/- and less,
b) for renewals and replacement works chargeable to Revenue costing Rs.2 lakhs and less and
c) for "Reconditioning Works" costing Rs.1lakhs and less
detailed estimates need not be prepared for formal sanction. Rough estimates should be prepared and kept on record by the Executive Engineer.
6. What are the estimates prepared for open line works? Explain each of them in detail?
The following are the different Estimates prepared in connection with Open Line works:
(a) Abstract Estimates.
(b) Detailed Estimates.
(c) Supplementary Estimates.
(d) Revised Estimates.
Abstract Estimates: (AE) (702 E)
1. An abstract estimate is prepared in order to enable the authority competent to give administrative approval to the expenditure of the nature and magnitude contemplated to form a reasonably accurate idea of the probable expenditure and such other data sufficient to enable authority to gauge adequately the financial prospects of the proposal.
2. It avoids the expenses and delay of preparing estimates for works in detail at a stage when the necessity and the general desirability of the works proposed have not been decided upon by the competent authority.
3. It should contain a brief report and justification for the work, specifically should mention whether funds are required in the current FY and to what extent.
4. It should also show the cost sub-divided under main heads and sub-heads or specific items, the purpose being to present a correct idea of the work and to indicate the nature of expenditure involved.
5. The allocation of above items as between Capital, DRF, DF etc., should be indicated.
6. Administrative approval to a work should be accorded by the authority competent to do so after a thorough examination as to its necessity, utility and financial prospects.
7. In regard to works which are specified in the sanctioned budget of a year i.e., in the "Works, Machinery and Rolling-stock Program" accompanying the Budget Orders, the total estimated cost shown against each work should be regarded as the AE.
8. The inclusion of a work in the sanctioned budget should be deemed to carry with it the administrative approval of the Railway Board except that in the case of structural works, other than track renewal works, costing more than Rupees one crore each, the administrative approval of the RB should be obtained by submission of separate AE notwithstanding their specific inclusion in the sanctioned budget.
Detailed Estimate:(DE) (703 E)
1. On receipt of administrative approval to a project or scheme other than for the construction of new line, conveyed through the sanction to the AE relating thereto, detailed estimates for various works included in the AE should be prepared and submitted for technical sanction of the competent authority.
2. It should be prepared in sufficient detail to enable the competent authority to make sure that the abstract estimate sanctioned by a higher authority is not likely to be exceeded.
3. No work included in an abstract estimate should be commenced till a detailed estimate for the same is prepared and sanctioned and adequate funds are allotted by the competent authority.
4. The detailed estimate of an open line work will comprise
(i) Statement is showing details of estimated cost and
(ii) An outer sheet giving the abstract of cost of work, the report, the financial justification and the allocation.
5. Technical Sanction – The sanction of the competent authority to the detailed estimate of a work is called the “technical sanction”. The authority according technical sanction should satisfy itself that
(i) the details of the scheme as worked out are satisfactory,
(ii) the method proposed for the execution off the work are adequate; and
(iii) the cost has been estimated from reliable data and likely to be reasonably accurate.
6.
6. In the case of works within his power of sanction, the General Manager may, in lieu of the procedure of preparing Abstract Estimates for administrative approval, prescribe that both the administrative approval and the technical sanction should be accorded on the detailed estimates.
Supplementary Estimate: (SE) (707 E)
1. A supplementary estimate should be prepared for any item of work, which ought to have been included in the first instance in an estimate already sanctioned but has not been so included, or which it is found later, should be considered as being a part of an estimate already prepared and sanctioned, if it cannot be met out of contingencies.
2. Such a supplementary estimate should be prepared in the same form and the same degree of detail as the main estimate and for all purposes be treated as a part of the main estimate.
Revised Estimate: (RE) (708 E & 1136 E)
1. As soon as it becomes apparent that the expenditure on a work or Project is likely to exceed the amount provided there for in the detailed estimate or construction estimate a revised estimate should be prepared and submitted for the sanction of the competent authority.
2. It should, unless otherwise ordered by the sanctioning authority, be prepared in the same form and the same degree of detail as the original estimate, and should be accompanied by a comparative statement showing the excess or saving under each sub-head of account against the latest sanction.
3. In cases where a supplementary estimate or a previous revised estimate has been sanctioned by the Railway Board, it should be made clear how the original sanction has been modified by such further sanctions.
4. In cases where the work is in an advanced stage and is likely to be completed before a revised estimate can be got out, the excess may, with the prior approval of the competent authority, be dealt with in the completion report of the work.
5. The fact that a competent authority has permitted the regularization of excess over an estimate through the completion report should invariably be intimated to the Accounts Officer.
7. What are the estimates which are prepared in connection with New Line, or construction project? Explain each in detail.
The following are the estimates prepared for construction of new line projects:
a) Project Abstract Estimate,
b) Construction Estimate and
c) Completion Estimate.
Project Abstract Estimate: (PAE) (709 E)
1. This is an abstract estimate for a Construction project. It should be prepared in Form E. 554 and submitted for the approval of the Railway Board.
2. It should show the Abstract cost of Railway, for the whole line by each section of the line. It should be accompanied by
(i) an abstract estimate of junction arrangements,
(ii) a narrative report explaining the salient features and major items of expenditure
(iii) detailed estimates on Form E. 553 showing the cost of construction of the projected railway under various heads of Capital classification viz. –
a) Capital-1120-Land
b) Structural Engineering Works :-
1132--Tunnels, 1151 & 1152-Major Bridges, 1153 & 1154Minor Bridges, 1140 Ballast and Permanent-Way (Detailed estimate for one Kilometre).
c) 2000 --- Rolling Stock
d) 1180 & 1190-General Charges - Establishment and General charges - Other than Establishment.
Ø Note(i) :- Head shown above are for plan Head `New Lines' as an example.
These detailed estimates should be prepared from an engineering survey report.
Ø Note (ii):- The abstract estimate of an unremunerative project chargeable to Development fund will be prepared in the same detail as the abstract estimate for a construction project chargeable to Capital.
Construction Estimate: (CE) ( 710 E)
When it is decided to undertake the execution of a new line, gauge conversion or doubling of lines, a final location survey should be made; and based on the information collected in that survey detailed estimates of all the works included in the project as a whole should be prepared. These detailed estimates are collectively called the "Construction Estimate" of the project.
1. It should be prepared after a careful examination of the various details of construction involved in the project.
2. It should be in such detail as to render it possible to dispense with working estimates or any other further estimating after the construction estimate has been sanctioned (except when supplementary or revised estimates are necessary).
3. It should provide for the buildings and equipment of the railway up to a standard that will be sufficient for working such traffic as may be expected during the first year or two after opening of the line.
4. It is the basis on which technical sanction to the various works included in the construction of a project is accorded.
5. In special cases where works are required to be commenced before the earliest date by which detailed estimates for the project as a whole could be prepared and sanctioned, part estimates for sub- works may be prepared. To enable the commencement of work on such works forming a part of the project, part estimates for the following sub-works may be sanctioned progressively by the authority competent to sanction the detailed estimate for the whole project :
(i) Preliminary works including final location survey etc.
(ii) Setting up of project offices and organisation including office accommodation, construction equipment minimum vehicles and provision for gazetted and non- gazetted staff etc.
(iii) Land acquisition
(iv) Formation and bridge works for whole or part of the project where survey has been done and alignment determined.
(v) Minimum service buildings in case of new line works required to meet immediate needs of construction organisation and subsequently required for operation of the project.
(vi) Minimum residential quarters required to meet immediate needs of construction staff. The number and location of quarters should be within the overall requirement of Open Line for operation of the project.
6. Before forwarding part estimates duly concurred by FA & CAO and approved by General Manager for sanction to the Rly. Board, it should be certified that no works included in the part estimates are likely to become redundant when estimate for the whole project is prepared.
7. The Construction Estimate of project should be prepared in Form E. 553 prescribed for the purpose. It should be divided into convenient sections in accordance with the following principles:
a) When, as is usually the case, certain works within the limits of a junction station are incidental to the project, these works should form a distinct section;
b) When a project comprises a "main line" and a "branch", the "branch" should form at least one distinct section;
c) Where the country traversed by a line is such that it may readily be divided into tracts of distinctive topographical character, the length through each class of country may comprise a section or a project may be divided into "engine runs" or into lengths suitable for "construction divisions".
d) Where there is likelihood of different sections of a project being opened to traffic at different intervals, the estimate for each such section should be kept distinct;
e) When an estimate for any alternative alignment of importance is included, the estimate for the alternative alignment and for the length which it would supersede, if adopted, should each be comprised in a distinct section.
1. A completion Estimate is prepared in supersession of a construction estimate.
2. In the case of Railway Projects costing over rupees one crore, the Construction or Abstract Estimate should be closed at the end of one of the first three financial half years after the date of "opening" as may be convenient and a "completion estimate" prepared.
3. The completion estimate is a "stock taking estimate", and all works not started on that date are excluded from the scope of the project and are to be dealt with separately. The financial half year in which the project is opened should be excluded for determining the date of closing of project estimate and preparation of completion estimate.
4. Completion estimate should show in a tabular form (E. 713) the following particulars in respect of all the works included in the construction estimate :
(i) amount of sanctioned estimate;
(ii) actual expenditure on all works up to the date of closing of the construction estimate;
(iii) commitments on that date;
(iv) anticipated further outlay;
(v) total estimated cost [ (ii) to (iv) ]; and
(vi) difference between the sanctioned estimate and the estimated cost [ (v) – (i) ].
5. It is accompanied by an Abstract under Capital classification of heads if there is any Material Modification, requiring Rly. Board’s sanction. Explanations for excesses of not less than Rs. 10,000 or 10 per cent over the provision under sub-heads of account and for savings of 20 per cent or one lakh, whichever is less, occurring under any main head of account.
6. Provision for further outlay should be made in completion estimate only for those works which are in progress or completed on the date of closing of the construction estimate.
8. What are the main points to be seen in the verification of estimates for works by the Accounts?
(741 E to 748 E)
One phase of the control of expenditure on railways is a regular check by the Accounts Officer of all the estimates before they are sanctioned by the competent authority. The object of this preliminary check of estimates is to avoid irregular sanction to expenditure and the main points which require consideration are:
(i) The propriety of the expenditure;
(ii) The incidence and classification of charges;
(iii) The existence of budget provision to meet the proposed expenditure during the FY
(iv) Freedom from errors and omissions and
(v) Competency of sanction.
Propriety of Expenditure.
1. It is the duty of the Accounts Officer, in his capacity as Financial Adviser, to examine zealously all proposals for expenditure with a view to see
(i) that the expenditure proposed to be charged to railway funds in the estimate, is properly and legitimately so chargeable;
(ii) that proper financial justification is forthcoming in the case of all works requiring such financial justification; and
(iii) that in the case of estimates for staff quarters and other rent returning building, the anticipated yield of rent as shown in the `Rent Statement' will not have the effect of reducing the return on the cost (excluding cost of land) of each class of Quarters to less than 6 per cent per annum.
Incidence and Classification of Charges.
1. These should be verified in an estimate in accordance with the rules of incidence and
the classification of expenditure prescribed in the Indian Railway Financial Code. In his verification certificate, the Accounts Officer should clearly state that incidence and allocation have been so verified.
2. The submission of an estimate to the sanctioning authority should not be delayed when there arises any doubt as to the correct allocation of estimated cost and the question at issue will take time to settle. In such cases, the approximate allocation between Capital or Development Fund, Open Line Works-Revenue, Depreciation Reserve Fund and Revenue may be certified by the Accounts Officer, as far as it is possible for him to do so, and the sanctioning authority may sanction the estimate, if otherwise in order, leaving over the question of allocation for subsequent consideration.
If the estimate of the work is altered as a result of verification of the estimate by the Accounts officer, the previous sanction should be revised.
Budget Provision:
1. The existence of budget provision for a proposed work should be verified from the sanctioned budget allotments for the year.
2. In case no funds exists, competent authority should be asked to arrange for funds before the work is actually taken in hand.
Freedom from Errors and omissions:
1. Errors and omissions noted in the course of the accounts Verification of estimates should be got corrected by the executive authority responsible for the preparation of the estimate.
2. The Accounts Officer may, in case where this becomes necessary, append to his verification certificate, a check note specifying such items of errors or omissions as have been pointed out by him, but have not been accepted by the executive authority and any other matter of importance.
Competency of Sanction:
The previous sanction of an authority higher than the General Managers of Indian Railways is necessary :
(i) To expenditure on new lines or rolling stock or surveys not provided in the sanctioned budget for the year or carried forward from the sanctioned budget of the previous year;
(ii) To expenditure on other works not provided in the sanctioned budget or carried forward from the sanctioned budget of any previous year except :
(a) (i) Track renewal works costing not more than Rupees two lakhs;
(ii) Other works costing not more than Rupees one lakh;
(iii) Machinery & Plant-costing not more than Rupees fifty thousands.
Provided that the total lump-sum provision made in the budget for such works is not exceeded;
(b) (i) On line capacity works costing above Rupees one lakh but not more than Rupees ten lakhs each;
(ii) On track renewal works costing above Rupees two lakhs but not more than Rupees five lakhs each;
(iii) On other than line capacity and track renewal- works costing above Rupees one lakh but not more than Rupees five lakhs each;
Subject to ceiling of Rupees one crore in all in a financial year provided that the sanctioned budget (other than lumpsum) for works in these categories is not exceeded.
*****
No comments:
Post a Comment