A Project Report on:

To study the financial elements in the execution of

a Lump Sum Turnkey Project
In
Engineers India Limited
Sumitted in partial fulfilment of P!"#$ program
%&&'(&)
Submitted by:
RAJENDER GUGLANI
Roll Number: 0621002534
Guide:
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(i)e *re!ide+t,
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1
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This project report describes the work done during summer training in Engineers
India Limited3 It also describes the field of operations of EIL in general and the
functions of Finance and Accounts Department in particular.
Training was undertaken in the -inance 4 Account "epartment of the aboe
organi!ation. During the training period" a task was undertaken to stud# the working of
the diision and to anal#!e the financial position and performance of the compan#.
The $#alance Sheet 4 .ash -lo5 Statements6 .ash -orecast Statements% has been
used for financial anal#sis to reflect compan#%s position.
&
A.7*,8LE"!E$E*T
9To ackno5ledge is to kno5 gratitude and to gratitude is :aluale duty 5hich
ought to e paid to :aluale in ones life time;3
(((Roolsseau
First and foremost" I sincerel# thank to $r3 73*3$ehra1 "3!3$ <-4A= and S373
Tikku A3!3$ <-4A=1 EIL for giing me an opportunit# to undertake this project.
And I would also like to thanks $r3 >indal <LST7 Projects=1 $r3 7apil !upta
<#udgeting Section( -4A=1 $s3 Suman <.ash 4 #ank Section= $r3 A373 #ansal
<Local Purchases( Loading -actor1 -inance=1 and $r3 ?373 Agar5al <Sr3 $anager(
$arketing -inance1 -4A= from EIL" for their aluable cooperation and assistance.
I would also like to thank my faculty guide1 "r3 S3S3 ?ernekar <"irector1 #?I$R=
and my class coordinator <$#A( III Trimester= $r3 Ashish .handra for their
time to time guidance.
'o now when m# training has been completed" m# heart is full of gratification" so I
cannot forget to thanks the Almighty !od and $y Parents3 Their blessings help me
eer# where in m# life. Thanks !od3
RA>E*"ER !+!LA*I
P!"#$< -inance=( %&&'(%&&)
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5
Executi:e summary
The project is also to stud# the basic procedure followed b# the compan# to handle a
lump sum turnke# project.
The initial work of the L'T6 department starts with estimating the oerall cost of the
project. For this" a budget for all the eEpected eEpenditure related to that project. 0osting
of eer# project depends upon the work inoled 9 aries accordingl#. Estimating the
total cost of the project is the most important work for the compan# as on the basis of
this" the compan# charges a lump sum fees from its client. It also gies them a guideline
to make future cash flows in accordance to their eEpected amount. The cost of arious
items can be ascertained b# the following wa#s) B

a.A ,+E *ID TIE ?,. This is done before the submission of Fuotation to
supplier to calculate the right $L1G and the tie up depend upon the delier#
period.
b.A I2 /-?'E 0-'T E'TI1ATE ) It is done internall# depends upon the
past relation or eEperience with the supplier.
There are arious factors like change in market situation" monopol# of a endor 9
inflationCdeflation which results in the change of the cost of the project in comparison
with the budget prepared. For eEample" estimated price of an item was +s.1.. but due to
short suppl# 9 increase in demand the compan# had to purchase it in +s.1&." in that case
the compan# has two options. Either" to use the float aailable from an# other item or use
the contingencies for which the approal of top management is reFuired.
'ince costing is done for a future project" so the clauses of inflationC deflation are also
considered carefull#. The cost of the project includes all the coers taken b# the compan#
against an# contingent liabilit# or risk.
8
There are mainl# three kinds of risk inole in these kinds of projects)
1. 0ompletion of project on time
&. ,rice C currenc# fluctuations
(. -ther risks
The arrangements to oer come these problems must be considered before starting the
project b# adding it in the cost of the project.
After the cost of the project is estimated" compan# starts working oer it. The engineering
department prepares a 1T- 9 generates the 1arketing +eFuest @1+A to 0ost 9
,urchase @09,A Department. -n the basis of this" +eFuest for Huotation @+FHA is send to
the listed endors of the compan# initing them to send their price bid for those material
and eFuipments.
+FH also includes the term 9 conditions of the compan# regarding arious issues
inoled in the contract. For eE. ,a#ment terms" delier# period" taEes etc.
The compan# charges some loading to the endors as a penalt# for an# deiations in their
terms. The purpose of loading is done to ealuate all the endors on same grounds. The
Lowest -ne @L1A endor is finall# get selected whose price is lowest with technical
acceptance. -nce the endor is selected the information thereof has to be sent to him in
the Form of Acceptance @F-AA.
;
<
D
Engineers India #ha5an1 #.P1 *e5 "elhi
@Deli%eri+. e1)elle+)e t#rou.# -eo-leA
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#RIE- PR,-ILE
IEngineers India LimitedG proides engineering and related technical serices for
petroleum refineries and other industrial projects. Its fields of actiities include petroleum
refineries" pipeline" oil and gas processing" petrochemicals" offshore structures and
platforms" ports and terminals" metallurg#" fertili!ers" power" highwa#s and bridges"
airports" nonBconentionalCrenewable energ# sources" and intelligent buildings and urban
deelopment. The compan# offers arious serices to conceptuali!e" design" engineer"
and construct projects to meet the specific reFuirements of its clients. It has strategic
alliances with ,etronet L27J 0hina 2ational 1achiner# 9 EFuipment Import 9 EEport
0orporationJ /arbin ,ower Engineering 0o. LimitedJ Apache Energ# LimitedJ 4AI
Industries ?6 LimitedJ Deutsche 1ontan Technologies 7mb/J 0alibre ,rojects ,t#
LimitedJ Thiess ,t# LimitedJ 0urtin ?niersit# of Technolog#J I-0LJ ,etron 'cientech"
Inc.J 'tro#transga!J and 7AIL India Limited. Engineers India Limited was founded in
1>;8 and is headFuartered in 2ew Delhi" India with additional offices in London" the
?nited 6ingdomJ Abu Dhabi" the ?nited Arab EmiratesJ and 6uwait" Hatar" 1ala#sia"
and Australia.
1.
23E 04*AN5
Fort# Three #ears ago the countr#%s planners gae shape to a ision as a result of which
was born EIL an organi!ation to help set up the ital petroleum industr# in the countr#.
Engineers India Limited 5as estalished in B)'C to pro:ide engineering and related
technical ser:ices for petroleum refineries and other industrial projects3
In addition to petroleum refineries" with which EIL started initiall#" it has diersified into
and eEcelled in other fields such as pipelines" petrochemicals" oil and gas processing"
offshore structures and platforms" fertili!ers" metallurg# and power. EIL now proides a
complete range of project serices in these fields and has emerged as Asia%s leading
design and engineering 0ompan#.
Engineers India Limited is diersif#ing into seeral new areas including /ighwa#s 9
*ridges" IT" Airports" 1ass +apid Transport '#stems" ,orts 9 Terminals" ,ower
,rojects" 2onBconentional C +enewable Energ# 'ources" 'pecialist 1aterials and
1aintenance 'erices" Intelligent *uildings" =ater and ?rban Deelopment projects.
EIL%s fields of actiities include)
,etroleum +efineries
,ipeline
-il and 7as ,rocessing
,etrochemicals
-ffshore 'tructures 9 ,latforms
,orts 9 Terminals
1etallurg#
Fertili!ers
,ower
11
/ighwa#s 9 *ridges
Airports
2on 0onentional C +enewable Energ# 'ources
Intelligent *uildings 9 ?rban Deelopment
Ser:ices offered b# EIL includes )
Feasibilit# 'tudies
,roject 1anagement
,lanning and 'cheduling
0ost Engineering
,rocess Design
Detailed Engineering
,rocurement
0onstruction 1anagement
0ommissioning and ,lant 'tartBup Assistance
/eat and 1ass Transfer EFuipment Design
Enironmental Engineering
Information Technolog# 'erices
Engineering 0omputeri!ation 'upport 'erices
'pecialist 1aterial and 1aintenance 'erices
Energ# 0onseration
,lant -perations 9 'afet# including +isk Anal#sis
Adanced 0ontrol and -ptimi!ation
EIL proides the complete range of serices needed to conceptuali!e" design" engineer
and construct projects to meet the specific reFuirements of its clients. Its association with
the clients eEtends be#ond the commissioning of their plants through monitoring
operation of each plant and accumulating feedback on performance. A Lump sum
Turnke# project from concept to commissioning is an area into which EIL has entered in
1&
a big wa#. EIL%s Fualit# management s#stems in respect of its serices hae been
assessed and upgraded to I'- >..1)&... ersion.
*esides its /ead -ffice at 2ew Delhi" EIL has branch office at 1umbai" !onal office at
6olkata" regional offices at 0hennai and 4adodara and inspection offices at all major
eFuipment manufacturing locations in India. It also has oerseas offices at London" Abu
Dhabi" 6uwait" Hatar" 1ala#sia and Australia. EIL has a large number of site offices in
India and abroad.
EIL has two wholl# owned subsidiaries" EIL Asia ,acific 'dn *hd in 1ala#sia and
0ertification Engineers International Ltd. for undertaking independent certification 9
third part# inspection assignments.
EIL has grown oer the #ears to become a uniFue organi!ation" the likes of which has not
been created in an# other deeloping countr#. The last four decades hae proided
enormous opportunities to EIL and it goes to the credit of the compan# to hae
successfull# met the challenges that came its wa#.
1(
?ision
To ecome a 5orld class gloally .ompetiti:e EP. 4 total solutions .onsultancy
,rgani@ation3
$ission Statement
1. To achiee ITotal 0ustomer 'atisfactionG while deliering innoatie" cost
effectie and alue added consulting 9 E,0 serices at global leel.
&. To ensure growth and professional eEcellence b# building intellectual capital and
core competencies.
(. To maEimi!e creation of wealth" alue and satisfaction for stakeBholders.
5. To foster a culture of participation and innoation for emplo#ee%s growth and
contribution through a climate of fairness and transparenc# in operation.
8. To promote and encourage best practices for /ealth" 'afet#" Enironment and
Ethics.
;. To achiee prominence in deeloping" adopting and assimilating stateBofBtheBart
technologies for competitie adantage.
2#e 0ore ($lue!
1. 6e+)#m$r7 to learn from superior role models.
&. 2urture the essence of 0ustomer Rel$tio+!#i- and bonding.
(. Foster I++o%$tion with emphasis on alue addition.
5. I+te.rity and Trust as fundamental to functioning.
8. Thrie upon constant 8+o'led.e updation as a learning organisation.
;. *$!!io+ in pursuit of eEcellence.
<. 9u$lity as a wa# of life.
D. 0ollaboration in s#nerg# through crossBfunctional 2e$m e::ort!.
>. 'ense of o'+er!#i- in what we do.
15
Risk $anagement Policy
EIL is committed to effectie management of risks across the organi!ation b# aligning its
risk management strateg# to its business objecties through instituting a risk management
structure for timel# identification" assessment" mitigating" monitoring and reporting of
risks. +isk management at EIL is the responsibilit# of eer# emplo#ee both indiiduall#
as well as collectiel#.
9AI$S A*" ,#>E.TI?ES; of .ompany
To proide serices of high Fualit# in process design engineering" detailed
engineering" procurement" construction as well as oerall project management in
oil refining" oilCgas processing" petrochemicals" fertili!ers" chemical process
industries" metallurg# and mining" offshore platforms" ports and terminals and
other selected sectors of industr#.
To proide engineering and technical consultanc# serices of high Fualit# in
selected areas of technolog# such as heat9 mass transfer eFuipment design"
enironmental engineering. Energ# conseration" safet# and risk management"
adanced control of process industries" s#stem studies and software deelopment.
To continuousl# improe the Fualit# of serices to clients and meet client
reFuirements promptl# and economicall#.
To maintain a sustained rate of growth in turnoer and profitabilit# in domestic
and international operations through aggressie marketing strateg#.
To foster and accelerate the deelopment of indigenous technologies.
To promote linkage between +9D organi!ations" engineering organi!ations"
eFuipments manufacturers and operating companies in order to modif#" adapt and
upgrade technologies on a continuous basis.
18
RESEAR./ 4 "E?EL,P$E*T
6eeping an e#e on the future needs" EIL initiated its +esearch 9 Deelopment actiities
in 1><.. Its +9D 0entre is located at 7urgaon on the outskirts of Delhi. The +9D 0entre
is manned b# about D. trained engineers and necessar# support staff.
EIL has been working closel# with operating companies in setting up pilot plants for
collection of design data" and with 2ational Laboratories and premier technical
institutions and has deeloped technologies in the fields of petroleum refining"
petrochemicals" nonBferrous metallurg# and h#draulic transportation of solids. EIL%s
+9D has made significant contribution towards process design of a number of units such
as aromatics eEtraction" isbreaker" acr#lates" transportation through slurr# pipelines"
propane deasphalting plants" etc. EIL is currentl# carr#ing out research programmes in)
Distillation
Ejectors
Eductors
Incineration
Furnaces
'olent EEtraction
'imulationC0omputer Aided Design
0ommerciali!ation
2on ferrous metallurg#
.omputer soft5are is also eing de:eloped for data reconciliation1 atch scheduling1
etc3 and for rigorous simulation of specific refinery processes3
1;
04*AN5;S 3IS24R5
B)'C Foundation of Engineers India Limited.
B)'D EIL became a wholl# owned 7oernment 0ompan#.
B)') Diersification into ,etrochemicals.
B)D& 0reation of /eat 9 1ass Transfer Design and 0omputer 'erices Departments.
B)DB -cean Engineering Department formed.
B)D% First 1etallurgical ,roject.
B)DF ,rocurement office opened in London
Entr# into Fertili!er and ,ipeline projects.
B)DG First -erseas assignment
Inhouse process designCengineering" technolog# deelopment.
B)DC Installed a third generation computer s#stem.
B)D' Training Diision formed.
B)DD First -il 9 7as processing project.
B)DC(
B)E&
Deelopment of skills in the areas of ,rocess ,lant serices e.g. -perations" 'afet#"
1aterials" and Enironmental Engineering.
B)EB ?se of computers at construction sites" ,rocurement office opened in Tok#o.
B)EF -wn office compleE B EIL *haan occupied" Independent 0ertification Diision formed.
B)E) -wn +9D 0entre at 7urgaon.
B))% Engineering -ffice opened in Hatar" :ointB4enture with A1E0" ?6.
B))F +egional -ffices opened in 0hennai 9 4adodara.
B))G
0reation of subsidiar# B EIL Asia ,acific 'dn. *hd
I'- >..1 0ertification
,eak eEport earnings.
B))C
'iE ,ercent Disinestment
Formation of 'ubsidiar#B0ertification Engineers International Ltd.
B))D Four per cent eFuit# for emplo#ees.
B))E Diersification into L27 and +efiner# +esidue based ,ower ,lants
B)))
EIL enters into Turnke# 0ontractingB?ndertakes turnke# projects in the areas of -ffshore
,latforms and -ffsite Automation
/ighest Diidend of 18.K paid.
%&&&
EIL%s 1-? rating highest amongst all ,'?s under the 1inistr# of ,etroleum 9 2atural
7as.
%&&B
1ajor diersification into seeral new infrastructure and other areas.
EIL%s 1-? performance improed to 1..1< @in &...B&..1A and is ranked no. 1 amongst
the ,'Es under the 1inistr# of ,etroleum 9 2atural 7as
%&&%
1ajor *reakthrough in Turnke# 0ontracting. -270 awarded the prestigious 12=
,latform to EIL on Lumpsum Turnke# basis
1<
A&ARDS < A03EI(EN2S
%&&E
Amit# Award for *est Engineering 0onsultanc# 'erices.
%&&E
,etroFed award for $*est =omen EEecutie of the 3ear% to 1s 4artika" A71 @,rocess
Design 9 De.A
%&&D
EIL receied a shield and a certificate from Abu Dhabi 0ompan# for -nshore -il -perations
@AD0-A on for successfull# completing 8 1illion manBhours without Loss Time incident at
their Tank Farm ?pgrade Facilities ,roject" :ebel Dhanna.
%&&D
/indalco awarded a I0ertificate of +ecognitionG to EIL for achieing a landmark of 1.1;
million accidentBfree manBhours at 1uri Alumina *rownfield EEpansion ,roject.
%&&D
Appreciation letter from ,une 1unicipal 0orporation for bringing about noticeable
improement in Fualit# and reliabilit# of arious projects like roads" drainage s#stems etc.
%&&D
Fifth time recipient of Indira 7andhi 'hield @1
st
,ri!eA for +ajbhasha Implementation @&..8B
&..;A
%&&D
=orld Intellectual ,ropert# -rganisation @=I,-A%s 0ertificate of 1erit to Dr. ' *anik" 0hief
0onsultant" for 0oBinentor of *est Inention of India for commerciali!ation of 2oel
,rocess for +emoal of /&' and 1ercaptans from L,7 through 0F0.
%&&D EIL amongst 1ost Admired 0ompanies in 0onstruction =orld maga!ine @2o. &..< IssueA
%&&D
EIL bagged two 2ational awards from ,ublic +elations 'ociet# of India for the
following)IAap Aur /umGB 1
st
I/amara EIL @In /indi 0ategor#A B (
rd
,ri!e
%&&'
0D0 2ational Award for EEcellence in 0onsultanc# 'erices &..8 for eEecution of 0apacit#
EEpansionBcumB1oderni!ation ,roject ,haseBI of 6+L.
%&&'
1erit 0ertificate for EEcellence in the achieement of 1o? Target for the #ear &..(B&..5
b# /on%ble 4ice ,resident of India
%&&'
EIL ranked at 15& in the list of ET 8.. companies @published in Februar# &..;A up from (11
an #ear ago based on an aerage of eight separate factors
%&&'
EIL has been ranked at &; in *usiness India%s Top 8. ,'?s based on the 1arket
0apitali!ation
%&&'
2+D0 award for innoation and commerciali!ation of 0F0 Technolog# of EILB+9D and
I-0B+9D
%&&'
EIL bagged two 2ational awards from ,ublic +elations 'ociet# of India for the
following)B IAap Aur /umGB (
rd
B I0orporate *rochureG B (
rd
,ri!e
%&&'
Fourth time recipient of Indira 7andhi 'hield @1
st
,ri!eA for +ajbhasha Implementation
@&..5B&..8A
%&&'
Appreciation from 1Cs /EI'0- for completing the job of /eater and *oiler 'afet#
?pgradation and Emission project of 62,0" 6uwait in record time as Engineering
0onsultant
%&&'
0ertificate of appreciation for achieing oer (; million accident free construction manB
hours at the ,TA ,roject of I-0L at ,anipat.
%&&'
0ertificate of appreciation for achieing 1. million accident free construction manBhours at
+efiner# EEpansion ,roject of I-0L at ,anipat.
%&&' EIL receied a shield and a certificate from Abu Dhabi 0ompan# for -nshore -il -perations
1D
@AD0-Afor successfull# completing 1.8 1illion manBhours without Loss Time incident at
their Tank Farm ?pgrade Facilities ,roject" :ebel Dhanna
1>
04*AN5 S2RU02URE

&.
$A>,R .,$PETIT,RS ,- EIL
Larsen 4 Touro <L4T= = Engineering and 0onstruction in major
engineering disciplines like ciilCstructural" plant designCmechanical" electrical"
and process controlCautomation.
#chtel corporation( construction 9 engineering in discipline like
ciilCinfrastructure" mining 9 metals" oil" gas" chemical 9 power.
Punj Lloyd LimitedB It is a transnational compan# speciali!ing in the
energ# and infrastructure sectors. Its business areas include -ffshore
9-nshore Field Deelopment" ,ipelines" Tankage 9 Terminals" ,ower"
0iil Infrastructure" Asset 1anagement" and Telecom 9 *roadband.
Tata .onsultancy ser:ices(0onsulting" IT 'erices" *,-" IT Infrastructure
'erices" Engineering 9 Industrial 'erices" ,roduct *ased 'olutions.
*A#,RS I*"+STRIES LT"3( 2abors Industries" Ltd. operates as a land
drilling contractor. It conducts oil" gas" and geothermal land drilling operations
in the ?nited 'tates" Alaska" 0anada" 'outh America" 1eEico" the 0aribbean"
the 1iddle East" the Far East" +ussia" and Africa. The compan# also operates
as a land wellBsericing and workoer contractor in the ?nited 'tates and
0anada. In addition" 2abors Industries proides offshore platform workoer
and drilling rigs that offer wellBsericing" workoer" and drilling serices.
Further" the compan# offers a range of ancillar# wellBsite serices" including
engineering" construction" maintenance" well logging" directional drilling" rig
instrumentation" data collection" and other support sericesJ and logistics
&1
serices for onshore drilling in 0anada using helicopters and fiEedBwinged
aircraft. Additionall#" it manufactures and leases or sells top dries for a range
of drilling applications" directional drilling s#stems" rig instrumentation and
data collection eFuipment" pipeline handling eFuipment" and rig reporting
software. 2abors Industries also inests in oil and gas eEploration"
deelopment" and production actiities. The compan#%s customers include oil
and gas companies" foreign national oil and gas companies" and independent
oil and gas companies. As of December (1" &..<" its fleet of rigs consisted of
approEimatel# 8(8 land drilling rigs" approEimatel# 8;5 domestic and 1<(
international land workoer and wellBsericing rigs" (8 offshore platform rigs"
1& jackBup units" and 5 barge rigs" as well as arious trucks and fluid hauling
ehicles. The compan# was founded in 1>;D and is based in /amilton"
*ermuda.
SAA! RR I*-RA LT"3 ( 'AA7 ++ Infra Limited operates in the
construction industr#. It proides solutions for largeBscale infrastructure
projects" such as oil and gas projects" including pipeline" work oer rig
serices" and other speciali!ed sericesJ water and sewer comprising water and
sewerage treatment plants" and pipeline worksJ and general" institutional" and
industrial buildings. 'AA7 ++ seres industrial clients and goernment
departments. The compan# was founded in 1>>8. It was formerl# known as
6aash#ap Foundations Limited and changed its name to ++.0-1 Limited in
&.... Later" the name was changed to ++ 7reenhands Infrastructure India
Limited in &..&J and to 'AA7 ++ Infra Limited in &..5. The compan# is
based in 0hennai" India. 'AA7 ++ Infra Limited is a subsidiar# of 'AA7
0onsolidated @1A */D.
?EL,SI LT"3 ( 4elosi Europe Limited proides Fualit# assurance and
Fualit# control serices to oil and gas companies. The compan# was founded in
1>D& and is based in +eading" ?nited 6ingdom3 4elosi Limited follows a
&&
strateg# of entering new geographic markets" eEpanding eEisting markets
through joint enture and acFuisitions. 4elosi Limited also announced that the
7roup continues to ealuate appropriate acFuisition opportunities. Dr. 2abil
Abdul :alil" 0E-" commented) I=ith reenue growth across all areas of the
globe" &..< has been a #ear of eEpansion for the 7roup" both through our
eEtended serice offerings and through our acFuisitions. 1arket conditions
remain faorable and the *oard is confident on the outlook for &..D.G The
compan# announced that it would follow the same strateg# of growth in &..D.
,T/ER $I*,R .,$PETIT,RS:B
Pri:ate Sector
-L,+R "A*IEL1 TE./*IP(7TI1 L4T(./I0,"A1 TRI+*E1 T,0,
I*"IA1 SPI. TE./*IP1 +/"E1 ./E$TEA1 L+R!I1 T.E1 /4!1 >,/*
#R,8*1 //I1 SA$S+*!3
Pulic Sector
$"L1 /SL1 .SL1 P"IL1 $E.,*1 -E",1 RITES3
&(
S8,T A*AL0SIS
STRE*!T/:
Stro+. 6u!i+e!! *o!itio+ EIL is the onl# Indian consultanc# organi!ation which
is capable of taking up large and mega projects in a wide range of ,rocess
industries for eEecution.
In addition" it is the onl# compan# to hae undertaken all aspects of refiner#
projects including basic design. The compan# has thus built up high brand eFuit#
with both technolog# suppliers and end users.
/le1ibility to 'or7 A)ro!! Are$! EIL possess eEpertise in a wide range of
industries b# aailing of the s#nerg# aailable across a wide range of industries in
terms of designing and engineering practices" similarit# of eFuipment and
materials and applicabilit# of codes. This has helped EIL to diersif# business
risk so that downturns in an# one industr# would not undul# affect EIL%s income.
3um$+ Re!our)e! EIL%s main capital is intellectual in nature. Among all
companies including foreign 120 consultants" EIL has the largest manpower
base which is rated Fuite high in terms of capabilit#.
Stro+. /i+$+)i$l *o!itio+ EIL has demonstrated consistent profitabilit# since
inception which has contributed to a high leel of internal accruals. As on date"
the compan# has no borrowings. The reseres as on 1arch (1" &..D are
substantial at around +s. 1..1 crores against an eFuit# capital of +s. 8;.1; crores.
6ri.#t Gro't# *ro!-e)t! The Indian h#drocarbon sector has been opened up to
priate sector participation. This is eEpected to increase the leel of inestments
thus opening new growth opportunities for EIL
&5
8EA7*ESSES:
Internal disputes amongst emplo#ees.
1ost of the efficient emplo#ees do not hae long term interests in the compan#.
Laid back attitude possessed b# man# emplo#ees in the organi!ation.
There is no s#nerg# between strateg# and implementation.
=ork is done on stated guidelines" so lack of innoation is here.
,PP,RT+*IT0:
It is the one of the number1 compan# of Asia among consultanc# serices. 2ow it
is diersif#ing to be number 1 compan# of the =orld.
A new trend which seems to be emerging is that global engineering consulting
companies hae started acFuiring specific technologies in order to create entr#
barriers. Therefore it is perceied that access to technolog# will become
increasingl# important in future. Anticipating these changes" EIL has alread#
entered into strategic alliances with specific suppliers for specific technologies.
These would allow EIL to enhance its business through access to new markets
and eEposure to latest technologies. /oweer" it is more likel# to be aailable
along with eFuit# participation.
T/REATS:
0#$+.i+. 6u!i+e!! S)e+$rio In the past" EIL had a near monopol# position due
to arious reasons. The liberali!ation measures initiated b# the 7oernment hae
brought about a change from cost plus method of bidding to the L'T6 method of
project management. EIL currentl# does not hae enough eEperience in terms of
bidding for projects on a L'T6 basis.
&8
I+)re$!ed 0om-etitio+ The entr# of priate sector participants in the +efiner#
sector due to the liberali!ation measures initiated b# the 7oernment hae seen
the entr# of a number of established multiBnational companies into India like
power gas 9 *echtal 0orporation" Flour Daniel etc. These companies are
eEpected to increase the competition leels for EIL.
A))e!! to 2e)#+olo.y Increasingl#" global engineering consulting companies
hae started acFuiring specific technologies in order to create entr# barriers.
Therefore it is perceied that access to technolog# will become increasingl#
important in future. In such a scenario" EIL abilit# to source technolog# will
become important.
&;
-I*A*.E 4 A..,+*TS "EPART$E*T
Engineering India Limited is a large consultanc# -rgani!ation in the field of ,etroleum
+efining" ,etrochemicals" -il and 7as ,rocessing etc. proiding serices such as ,roject
1anagement" Detailed engineering" ,rocurement" 0onstruction and other technical
serices.
Finance and Accounts Diision has t5o distinct departments namel#J -inance
"epartment and Accounts "epartment.
-inance "epartment is performing serices related to EIL%s clients as well as assisting
the management of EIL in arriing at managerial decisions reFuiring financial anal#sis.
Finance Department performs the functions of preBaudit of the ,rocurement and
0onstruction ,roposals related to arious ongoing projects of the arious clients where"
EIL has been entrusted with the responsibilit# of procurement" tender award and
construction superision b# the clients and also for inBhouse purchase contracts and
accords financial concurrence on arious marketing and L'T6 proposals.
Accounts "epartment on the other hand has been entrusted with function of recording
the managerial decision in monetar# terms with an emphasis on time" accurac# and cost
to the satisfaction of the related agencies and indiiduals.
Accounts Department has been entrusted with all the accounting functions of the
compan# such as making and receiing mone# whether in the form of cash or in the
form of negotiable instruments from the suppliers and emplo#ees" generating inoices for
the serices rendered" preparing and pa#ment of pa#roll etc. and recording of all the
transactions with proper proisions of eEpenses and income so as to come out with a
statement representing the profit and loss of the compan# and also with a statement
&<
representing the assets and liabilities of the compan# giing a true and fair iew of the
affairs of the compan# on Fuarterl# basis and for the financial #ear ending on (1
st
1arch
to meet the statutor# reFuirements.
The Finance and Accounts Diision has deplo#ed persons eFuipped with sufficient
eEperience and Fualifications at arious leels in the field of Finance and Accounts" and
hae been proided with adeFuate facilities b# wa# of computers" communications and
secretarial assistance. The endeaor of deliering the assurance on Fualit# is through a
wellBdocumented Fualit# s#stem and audit.
The Diision has handled the needs of 0ompan# at commercial and statutor# plans with
an unblemished track record and our Annual Accounts hae the recognition of
,rofessional Institute such as IThe Institute of 0hartered Accountants of IndiaG.
The Diision has also gien Fualitatie support to other Diisions such as 1arketing"
,ersonnel and Administration" ,rocurement Diision for inBhouse reFuirements and also
other Diision hae been categori!ed and listed respectiel# under Functions of Finance
Department and Functions of Accounts Department.
&D
9-+*.TI,*S; ,- -I*A*.E 4 A..,+*TS "EPART$E*T
As the Finance and Accounts Diision has been distinctl# working as two independent
departments namel# Finance Department and Accounts Department" the functions of this
diision hae been categori!ed and listed respectiel# under Functions of Finance
Department and Functions of Accounts Department.
-+*.TI,*S ,- -I*A*.E "EPART$E*T
'crutin# and etting of 1arketing ,roposals.
Framing and etting of agreements with clients and negotiation with clients
regarding prices" commercial conditions and arious other agreement clauses.
Foreign collaboration and 7oernment approals.
'crutin# and etting of project and construction proposals for clients.
,a# fiEation of emplo#ee%s benefits.
Financial etting of EIL ,urchases and ,rice negotiation with endors.
,reparation of manBhour rates and oerhead rates" office maintenance etc.
'crutin# of Administration ,roposals for EIL propert# C office maintenance etc.
&>
-+*.TI,*S ,- A..,+*TS "EPART$E*T
,a#ment to emplo#ees for personal claims like 1edical" EEpense +eports" LT0"
Local 0one#ance and disbursement of /ouse *uilding" 0one#ance" Loans"
and also pa#ment to landlords for compan#%s accommodation on behalf of
emplo#ees.
Time sheet accounting in respect of /ead -ffice" Inspection -ffices" Field
-ffices" Foreign -ffices" 7eneration of *illing +eport" 'tatus +eport on manB
hour utili!ation on different jobs for use b# ,roject 1anagerC1anagement.
0orporate taEation.
,reparation of 0apital 9 +eenue *udgets for EIL.
Inoicing to clients i.e. raising of 1onthl# Inoices" Accounting of +eceipts"
FollowBup with ,roject 0oordinators" 0lients for outstanding amount.
,a#roll accounting i.e. preparation of monthl# pa# bill of /ead -ffice and /ead
-ffice controlled FieldCInspection -ffices" incomeBtaE of emplo#ees" maintenance
of Loan Ledger of emplo#ees to ensure regular monthl# recoeries and charging
of interest.
,a#ment of endor bills for supplies" serices" maintenance contract" purchase of
capital eFuipment etc.
Accounting of ,rint +oom" Telephone" FaE" TeleE eEpenses.
1aintenance of *ankC0ash Account and Inestment of surplus funds of the
0ompan#.
Finali!ation of Accounts of the 0ompan#" preparation of *alance 'heet" ,rofit
and Loss Account and 0oordination with 7oernmentC'tatutor# Auditors.
,rocessing and consolidation of Interest Accounts in respect of Field" Inspection"
Foreign -ffices.
1aintenance of ,ropert# +egister of 0ompan#%s assets.
0oordination with selfBaccounting ?nits" issue of guidelines for finali!ation of
accounts and to ensure timel# receipt of final accounts of the ?nits.
(.
+elease of foreign eEchange for tours abroad" arranging *ank 7uarantees and
opening of Letters of 0redits.
-pening and closing of bank accounts and transfer of funds to 'ites and *ranch
-ffices.
The financial terms on 5hich projects are a5arded :ary from the
cost(plus $ethod to the Lump sum Turnkey method as sho5n
elo5:
-inancial Terms of Projects:
$ET/," "ES.RIPTI,*
0ost plus or @Time plus 9
1aterial plusA
0onsultant is reimbursed for the
actual effort based on a manBhour rate
which has inBbuilt margins
Lump sum fee The entire consultanc# effort is
estimated and Fuoted for as one figure
Lump sum Turnke# @L'T6A 0onsultant is responsible for
engineering" design" procurement"
construction 9 commissioning within
oerall financial limits
In the past" most of the projects eEecuted b# EIL were on a costBplus or a lump sum basis
which had limited emphasis on time and costs and therefore had low financial risks. As a
conseFuence" margins" though limited were protected.
-n the other hand" the trend abroad is that a significant number of projects are undertaken
on a lump sum turnke# basis @either the whole project or the project diided into twoB
three modules each of which is eEecuted on a turnke# basisA.
Domesticall# too" it is eEpected that L'T6 would be increasingl# preferred
(1
-er the other methods as the customer will benefit b# wa# of reduced costs and onBtime
implementation.
As far as the consulting companies are concerned" project eEecution on L'T6 basis will
inole the abilit# to conceptuali!e" monitor and implement projects b# adhering to time
and cost schedules. If the project has not been properl# estimated in terms of
organi!ational effort and time" the consulting compan# could face penalties. Thus" taking
on large projects on L'T6 basis ma# be riskier for a consultanc# compan#. In addition"
the consultant ma# be reFuired to proide funds for temporar# periods during project
implementation. Also the abilit# to arrange longBterm finance for eEecution of the
projects assumes importance.
In addition" strong bidding skills and strong linkages with suppliers Csubcontractors
Ctechnolog# licensers will also be important. ,resentl#" EIL%s capabilit# to take on
projects on a L'T6 basis is relatiel# limited. The compan# is in the process of
improing internal s#stems in order to progressiel# switch oer to this method.
(&
SEGEMNET WISE REVENUE OF LAST 5 YEARS
0
100
200
300
400
500
600
700
800
2004 2005 2006 2007 2008
YEAR
R
S

(
I
N

C
R
O
R
E
S
)
consutancy & engineering
projects
lump sum turkey projects
((

,R!A*ISATI,*AL STR+.T+RE ,- T/E "I?ISI,*
The Finance 9 Accounts Diision is headed b# Diisional /ead" who reports to Director
@FinanceA. /e is assisted b# /eadsC InBcharges of the following departmentsCsections)
Accounts Department
Finance Department
The Finance 9 Accounts officers posted at arious sites outside Delhi report
administratiel# to respectie +01s C/eads of -ffices for all functions. /oweer" the
Finance and Accounts -fficers posted at +egional offices outside Delhi reports
administratiel# to respectie /ead of the -ffice and functions reports to D#. 7eneral
1anager of Accounts Diision.
In the absence of Diisional /ead" his work is looked after b# the authori!ed officer.
In the absence of /eadC InBcharge of an# department C sections" his work is looked after
b# a person nominated b# the authori!ed officer.
In the absence of an# dealing officer" his work is looked after b# InBcharge and C or b# a
person nominated InBcharge.
(5
?ARI,+S "I?ISI,*S6 A.TI?ITIES LI*7E" 8IT/ -I*A*.E 4
A..,+*TS <-4A=
B3 TI$E S/EET
The purpose of the pa#roll s#stem is to allocate the direct pa#roll cost to respectie job
on the basis of timeBsheet which contains the job number and time worked b# each
emplo#ee during a fortnight C month.
S.,PE
This coers all the emplo#ees on regular pa#roll of the compan#.
%3 .AS/ 6 #A*7 "I?ISI,*
1aking cash" 0heFue C draft pa#ments telegraphic transfer on the basis of approed
documents and proper accounting of the same.
+eceipt of cash" 0heFue C draft from emplo#ees" clients" regional C!onal C officers C sites
and proper accounting of the same.
S.,PE
The main actiities coered b# the 0ash and *ank section are listed below)
0ash ,a#ments
0ash +eceipts
0heFue ,a#ments
0heFue +eceipts
*ank transfer of emplo#ee%s pa#ments like salar#" lease rent" medical bills"
and ?niform minor repair claims" bonus" LT0" out of pocket claims etc.
Foreign EEchange +eceipts
Foreign EEchange ,a#ments
Transfer of funds to site branch offices C regional offices C !onal offices
(8
-pening and closing of bank accounts at /ead office and for sites branch
and foreign offices including amendments
-pening of letter of credit and issue of bank guarantees
Inestment of 'urplus funds
,a#ments to landlords for compan# leased @self and priateA accommodation
+econciliation of bank accounts
+econciliation of accounts heads 15." 1;1" 1;& and &.>
Attending to Auditors.
F3 ?E*",R PA0$E*T "I?ISI,*
4endor ,a#ment Diision deals with the billing to clients and recoer# of outstanding
dues. This procedure will enable the Accounts department @*illing groupA to follow a set
s#stem for raising the inoices on arious clients and the subseFuent followBup of
outstanding dues.
S.,PE
The scope of work of *illing 7roup is to raise the inoices under the following
categor# of :obs)
0ost plus percentage fee without ceiling.
0ost plus percentage fee with an oerall ceiling.
FiEed 1an hour rate C 1an month rate plus out of pocket eEpenses.
Lump sum jobs.
Lump sum job with certain eEpenses @e.g. Trael cost or Adertisement
costA on reimbursable basis.
Inspection C /1TD jobs with fee at fiEed percentage of eFuipment cost.
Turnke# :obs.
1iscellaneous :obs.
(;
G3 PA0R,LL "I?ISI,*
The ,a#roll Diision of the compan# enables the emplo#ees to know the procedure of
making the ,a#roll in accordance with the +ules of the 0ompan#. This would also enable
them to know the time frame for pa#ments.
S.,PE
The main actiities of the ,a#roll 7roup are listed below)
,reparation of ,a#roll of each and eer# emplo#ee.
,rocessing of loan and adances.
,rocessing of IncomeBtaE calculations.
,rocessing of 0one#ance allowance C 0one#ance reimbursement.
,rocessing of Famil# ,ension.
,rocessing of 7ratuit# claims.
C3 $E"I.AL 6 EAPE*SE REP,RTS !R,+P
The main actiities coered b# the 1edical C EEpense reports group are following)
,rocessing of 1edical claims.
,rocessing of EEpense +eports.
,rocessing of LT0 claims.
,rocessing of 'ea Allowance claims of emplo#ees.
Entertainment +eimbursement.
,rocessing of Entertainment claims.
0ontrol of ,ersonal ledger of emplo#ees relating to tour C medical C
miscellaneous adance.
(<
'3 #+"!ET "I?ISI,*
In EIL Lero *ase *udgeting @L**A techniFue is used to prepare *udgets biannuall#.
L** is defined in EIL as a financial C Fuantitatie statement presented prior to the
end of the budget period @financial #earA with each budget estimate starting from
scratch and with fresh justifications of each estimate. Estimates b# nature can neer
be 1..K correct" howeer while estimating C projecting of efforts @eEpenditure C manB
hoursA" proper justification must be eEamined and closel# scrutini!ed so as to at
I,rudent and True EstimatesG. The aim of the *udget eEercise is to proide the
1anagement with a true picture of compan#%s projected performance and thereb#
enables it to take tactical C strategic based on efficient utili!ation of aailable
resources.
S.,PE
'cope defines the actiities undertaken b# the *udget 'ection to achiee the aboe
purpose. The main actiities coered b# this section are as follows)
To prepare biannual @original C reisedA budgets with respect to both 0apital
9 +eenue items.
The +eenue estimates include 1anBhour 9 EEpenditure estimation for
each job coordination in EIL.
The 0apital estimates include eEpenditure done in acFuiring FiEed Assets
like Land" *uilding" 0omputers" and *ooks etc.
Income is recogni!ed based of the pa#ment terms. *roadl# the t#pe of jobs
eEecuted b# EIL can be categori!ed as Lump sum @L'T6A. Income is
recogni!ed for each of the job eEecuted in EIL.
Estimates of efforts in EEpected :obs are also considered in *udgeting
process and the inputs are receied from 1arketing in consultation with
arious Diisions.
(D
+egular reporting to 1inistr# of ,etroleum 9 2atural 7as" Department of
,ublic Enterprise" and ,lanning 0ommission is also done through *udget
'ection. 'ome of the major reports are ,erformance *udget" Internal 9
EEtra *udgetar# +esources" and Annual ,lan etc.
D3 PR,>E.T P+R./ASE "I?ISI,*
,roject ,urchase diision proide preBauditing serices to undertakes the procurement
of eFuipments" plants and machiner# for and on behalf of arious clients for projects
undertaken b# EIL.
S.,PE
,roject ,urchase Diision proides following serices)
That the best aailable material is bought at the lowest aailable prices.
That the procedures and policies laid down for ,rocurement actiities in
consultation with clients are being followed and the same are not diluted.
That the ,rocurement actiities are completed within the scheduled time.
That the selection of endor@sA is unbiased and is based on competitieness.
+easonabilit# of price is established for sole offers C 'TA offers before
according Finance approal.
E3 .,RP,RATE TAAATI,* 8,R7
The main actiities coered under the corporate taEation work are listed below)
,reparation of details for computation of Assessable Income.
,a#ment of Diidend TaE under section 118B..
,a#ment of Installments of AdanceBTaE and self Assessment TaE.
Filing of Huarterl# +eturns regarding taE deducted at source in case of nonB
resident in Form 2o. &<.
(>
+econciliation of &51 AC0 @adance taE paid and TD' certificates receied
from clientsA
Filing the Income TaE +eturn.
Filing the =ealth TaE +eturn and pa#ment of wealth taE.
Follow up of pending cases for assessment rectifications and appeal.
TaE Audit +eport.
-btaining Income TaE 0learance 0ertificate @I.T.0.0.A
Finali!ation of Account of the 0ompan#
It is the reFuirement of the 0ompanies Act to close the books of accounts eer# #ear to
gie true and fair iew of ,rofit 9 Loss" the statement of assets and liabilit# owned b# the
compan# as on a particular date.
The main actiities coered b# the 7eneral Accounting section is coordinating among all
sections of the compan# to gie the desired result of presenting the facts and figures to
the 1anagement " 7oernment 9 0.A.7 and 'tock EEchange of compan# act" 1>8;.
5.
,#>E.TI?ES ,- ST+"0
T
The major objectie of the stud# was to get an understanding of financial actiities as
done in EIL. Also to understand the process adopted starting from undertaking a
project to its completion. This broad objectie was then further classified in to smaller
objecties which are as follows)
+nderstanding the ,rganisational Structure of EIL and its *usinesses.
+nderstanding the role of different departments in -inance1 especiall# the
0ash 9 *ank DepartmentB Inestment of 'urplus Funds and a stud# of Lump
sum Turnke# ,rojects.
7etting insights about the functioning and actiities performed b# the
compan# and banks in relation to its surplus mone#.
?nderstanding how EIL makes clients for arious actiities like ,rojects
@L'T6A" *anks" etc. I also came across in knowing the procedures of *idding"
Huotation" etc. on which EIL makes clients
Sources:
0ollection of Data includes making plans regarding how to proceed for gathering
information and data. /ere in this research we will use both ,rimar# and 'econdar#
sources of data. ,ersonal interaction was done for ,rimar# data. /oweer the research
will rel# heail# on 'econdar# data sources.
51
5&
5(
,#>E.TI?E ,- T/E ST+"0
The objectie of m# stud# to understand the ,+-0ED?+E of cost estimation for lump
sum turnke# projects in EIL" including the process of selecting arious material 9
eFuipment for the project at minimum cost.
1# subBobjectie was to understand the arious risks inoled in such
projects and what all procedures the compan# follows to oercome it.

I*TR,"+.TI,* T, L+$P S+$ T+R*7E0 PR,>E.TS
In iew of the change in the mode of contracting and in line with its ision of becoming a
globall# competitie E,0 organi!ation" EIL has successfull# started enturing into
turnke# contracting and has eEecuted number of contracts. ?nder this mode" EIL takes
single point responsibilit# for managing all elements of project eEecution i!." basic and
detailed engineering" procurement" plant construction" erection" startBup and
commissioning. EIL has also implemented seeral -nshore and -ffshore projects worth
oer +s. 1D8. 0rore on turnke# basis. ,rojects worth oer +s. 1&(. 0rore are currentl#
under eEecution.
LST7 PR,>E.TS:
These are lump sum turnke# projects wherein EIL just not onl# proide
consultanc# but undertakes the whole responsibilit# to complete the whole project of its
client on time" for which it charges a fiEed amount of mone# depending on the cost to be
incurred on that project.
55
L'T6 is a lucratie deal for both the parties as through this client gets the
suret# for its project to be done on time and EIL gets an opportunit# to earn huge profits
from the difference amount of E'TI1ATED 0-'T 9 A0T?AL 0-'T incurred on the
project.
8,R7I*! ,- LST7 "EPART$E*T:
.ost estimation:
The first and foremost work of L'T6 department is to ascertain the total cost of the
project" which EIL charges from its clients including its profit margins.
0osting of different projects depends upon the kind of projects undertaken and aries
accordingl#.
There are arious factors like change in market situation" monopol# of a endor 9
inflationCdeflation etc which results in the change of the cost of the project in comparison
with the budget prepared. For eEample"
A budget is prepared for a project" in which the eEpected eEpenditure for arious items is
as follows)
Insulator +s1" .."...
/eat eEtinguisher +s.1" &&"...
0onstructor +s. <8" ...
*ut due to monopol# created in the market the compan# is not being able to get thee
insulator for price less than +s 1" 1." .... *ut the actual eEpenditure incurred on heat
eEtinguisher 9 constructor was +s 1" 1D"... 9 +s. ;>"... respectiel# in that case" the
float aailable with compan# is +s 1."... so it can purchase that insulator for that higher
price.
58
*ut a situation arises where the compan# does not hae an# float aailable" then it can
use the contingenc# kept for that project with the approal of top management as it
contingenc# is a part of profit margins of the compan#. 'o an# decrease in that would
ultimatel# results in the decrease of profit margins.
There is no standard format or procedure for cost estimation of an# project.
*ut there is a basic structure followed in almost all the projects which is as follows)
&A "esign 4 Engineering ) this is a kind of InBhouse costing. It includes all the
eEpenses incurred on the emplo#ees engaged in proiding serices like
engineering or designing the project. For e.g. total man hours paid to the
emplo#ees against the time rendered b# them for that particular project1 tra:eling
expenses incurred in commuting between office and the site.
(A Site Expenses ) B This includes the eEpenses incurred on the deelopment and
construction of the site. For eEample eEpenses on -ffice EEpenses" 0apital
EEpenses @like office eFuipment 9 furnitureA .0ost for these items is considered at
the present market rate M Future Escalations depending upon the kind of product.
5A $aterial .ost )B It includes cost of material to be used in a project. For eEample
*oiler 0ost" 'teel 0ost" constructor 0ost 9 /eat EEtinguisher etc. The cost of
these items can be ascertained b# the following wa#s) B
a.A ,+E *ID TIE ?,. This is done before the submission of Fuotation to
supplier to calculate the right $L1G and the tie up depend upon the delier#
period.
b.A I2 /-?'E 0-'T E'TI1ATE ) It is done internall# depends upon the
past relation or eEperience with the supplier.
5;
For eEample the cost of *oiler to be used in a particular project is +s 1.. in the #ear
&..8 And there hae been no technical changes taken place in the kinds of boiler to
be used for a project in the #ear &..D" then the price would be considered as same as
of &..8 with some increment@if an#A.
8A Su .ontractor ) B these are the eEpenditure incurred on the people engaged in
ph#sical construction of the project. The# deelop structure in all t#pe of work
like) B ci:il 5ork1 $echanical 8ork1 Structure 5ork1 painting1 Insulation etc.
costing for this" again is done through ,+E *ID TIE ?, or on the basis of last
eEperiences.
;A -E ?ariation ) B It includes the cost which is charged as a coer for fluctuation in
Foreign EEchange +ates and the techniFue used in determining the cost of
imported item is known as InB/ouse hedging. ?nder this techniFue" the data
related to currenc# rates for past 5B8 #ears is gathered and then plotted graphicall#
to ascertain the ?pper limit" middle limit and lower limit of the rate. Then the
growth rate for all the limits is considered" and the weighted aerage rate is
finali!ed.
<A Risk 4 Liaility ) B It is the kind of coer which is made in adance for an# kind
of material lossJ loss b# fire etc depends on the basis of last eEperience on the
same kind of product. ,roper feedback related to same kind of past projects is
necessar# to determine this cost.
DA Insurance: B Insurance as per client reFuirement. There are three categor# of
insurance i.e. *A+ @builder all riskA and the second is 0A+ @constructor all riskA
and the last one is professional indemnit# i.e. due to the knowledge loss on the
part of EIL.
>A .ontingency ) B As per past eEperience" 8K contingenc# is considered as standard
and is charged on the total cost of the project. The amount of contingenc# is
5<
estimated b# the ILE4EL -F 0-2FIDE20EG showed b# concerned
departments.
'tandard amount)
1anBhour BBBBBBBBBBBBB 8K of the project cost as standard
TraelBBBBBBBBBBBBBBBB8K of the project cost as standard
1aterialBBBBBBBBBBBBB @depend upon the 1T- accurac#A
1.A $argin ) B This is the ultimate profit margin earned b# EIL" which is based on the
opportunit# cost of time and effort of EIL" standard rate preailing in the industr#
and the influence of the competitors.
Procurement of the material:
The actual work of EIL starts from the engineering department who prepares material
take off @1T-A and generate material reFuisition @1+A to 09, department.
09, department further adds Engineering 1+ and commercial portion to it.

Engineering 1+ includes technical specification reFuired for the project and commercial
portion includes cost estimation and checking of financial iabilit#.
After this 09, department issues ReHuisition for Huotations @+FHA to either
EIL%s listed endors or b# notice in:iting tenders @2ITA. 2IT can be made to both
Indian as well as foreign bidders but still foreign bidders are not preferred much to aoid
FE1A +egulations.
*ids are inited in two parts)
1A. 0ommercial M Technical N ?2,+I0ED *ID
&A. ,+I0ED *ID
Purchase procedure co:ers the follo5ing)
5D
,urchase of eFuipments" materials" spares" serices etc from indigenous and
foreign sources are reFuired for the project.
'election of bidders and issue of reFuest for bids @+F,A.
P+R./ASE PR,.E"+RE -,R I*"I!*I,IS ITE$S:
$ode of procurement(
=heneer client%s contact with EIL makes it mandator# to procure from bidder%s listed in
the contract" procurement for projects shall made on limited EnFuir# basis" irrespectie of
the alue of order. /oweer" for the items not conerted in such mandator# bidders list in
EIL%s contact with client" EIL $s D-, shall be followed.
=heneer it is not mandator# to procure material from bidders listedC approed b#
clients" EIL%s D-, is allowed.
Project idders list:
=heneer +F*s are to be issued on limited basis" the bidders list for each item shall be
deeloped as detailed below)
All the bidders listed in the clients contract document shall be selected for issue of
+F* eEpect for bidders on /olida#s list of EILC client. 0apacit# range restrictions
shall be followed as per EIL%s 1'L data. The list can be further supplemented b#
project manager. *idders added b# project manager will be informed that their
offer is subject to approal of clients. ,rice bids of such bidders will be opened
onl# if client%s approal is reached.
=heneer the clients bidder list is not aailable for an# item" +F* shall be issued
to all the bidders listed in the EIL%%s 1'L.
For items where bidders list is not aailable I contract and also in EIL 1'L" the
bidder list shall be furnished based on inputs @with respect to known
manufacturersCbidders of similar materialCeFuipmentA receied from ,DDC
5>
EngineeringC,10CclientC other operating companies and C or through internet.
Approal o bidders list shall be as per D-,.
#I""I*! PR,."+RE:
A=3 T8, #I" S0STE$
In two bid s#stem" the enFuir# shall specif# the receipt of bids in two cases in two
separate sealed enelopes i!.
a= +*PRI.E" #I":
-ne sealed enelope containing 5 copies ach of compliance to technical
reFuirement" delier# schedule with all commercial condition and unpriced copies of
price schedule.
= PRI.E" #I":
'econd sealed enelope shall contain original priced bid.
*oth unpriced and priced sealed enelopes are to be put in a common sealed enelope.
.ATE!,RISATI,* ,- $Rs:
,rojectC engineers ma# identif# where $no deiation bids% are to be inited and in such a
cases THCT*A ma# not be issued b# engineering.
#+L7 ITE$S ,* R,LLI*! $T,)
,rocurement of bulk items like pipes" fittings" flanges" ales" cables etc. can be restored
to either b# processing 1+s against each 1T- or b# entering into rate contarcts to sae
time and efforts on processing the 1+sC EnFuir# 9 recommendationC ordering. The
decision regarding items" applicabilit# and period of rate contract will be taken b# project
8.
manager in consultation with engineering and 09,. the rate of contract. if an#" will be
finali!ed as follows)
09, Department will issue enFuir#" based on the first 1T- 1+s as follows)
The inFuir# shall contain instructions to endors that the Fuantities against each
items as indicated as initial Fuantities which ma# increase up to 1..K or reduce
b# &8K.the Fuoted unit rates should be alid for a rate contract for issue of
purchase order for 1&C&5 months" starting with an initial purchase order for the
indicated Fuantities@less &8K" if reFuiredA. ,rices will be goerned as per price
ariations formula gien in F+*.
The recommendation shall be decided on the items wise L1 bidder basis for
entering into a rate of contract. The slabs will be adised to engineering" b# 09,"
,rior to issue of 1+. In case of few items are not in range of a particular
bidder@for slab wise ealuationA" such bidder will be allowed to source these items
from an# EIL approed supplier.
The first 1T- shall be ordered on the basis of rates established" through purchase
orders" on arious endors for different Items.
For reFuirements as and when firmed up @1T-sA" within the alidit# of rate
contracts" the orders for such items shall be placed using +ate 0ontracts within
the alidit# through 0all -ff -rders @0--A.
=heneer +ate 0ontract is being operated 0-- can be issued without financial
etting.
#AS7ET .,*.EPT:
81
In order to sae cost of inspection 9 eEpediting" transportation" endors data reFuirement
etc." items of similar specifications C reFuirement @e.g. pressure essels" EEchangers"
columns" air coolers" in column internals etc.A ma# be grouped together as a basket in the
+F* documents. The decision regarding such grouping shall be taken b# 09, in the
consultation with the project after receipt of 1+. Ealuation and -rdering of such
grouped items shall be done on the bottom lines basis.
The stipulation regarding group wise comparison shall be clearl# indicated in the enFuir#
document. *idder shall be reFuired to Fuote onl# total price of each group. Distribution
of total price for the purpose of billing 9 ,+' shall be gien b# EIL as percentage of
total price. ,- shall indicate item wise prices calculated based on percentage specified in
+F*.
I*STR+$E*TATI,* ITE$S:
=heneer possible the instrumentation items shall be procured b# bunchimg identical
items" and one data sheet for each t#pe of instruments will be made with tag numbers
falling into that categor#.
REI+EST -,R #I":
09, Department will issue reFuest for bid @+F*A to the approed bidders.
The +F* shall normall# be issued to bidders allowing & weeks of time for bulk
items" ( weeks time for others and 5 weeks for imported items 9 ,ackage for
submission of bids eEpecting proprietar# r single source items where enFuir#
could be issued with lesser time for submission of offer. For bulk items" not
coered in rate contracts" shorter period ma# be gien with the approal of project
manager.
8&
The reFuest for bids shall be hosted on EIL website with user IDC ,assword issued
to selected bidders. 09, ma# issue +F* on 0D as well" wheneer it is felt
necessar# to eEpedite offers.
In case an# bidder seeks clarification from compan#%s repl# has an effort on
scopeC reFuirement" the change accepted" if an#" will be communicated to all the
bidders before the due date.
EnFuiries will not be issued to the bidders on $/olida#% or in case of bidder is
deleted from EIL 1'L. The unpriced bidC price bid of the bidder shall not be
opened if the bidder is put on holida# list after issue of +F*.
Initiall# bids shall be generall# called for with a alidit# of & months from the bid
due date in case of indigenous suppl# 1+s and ( months for all packages and
foreign C global +F*s. The alidit# shall be eEtended further" if reFuired. -ffers
with shorter alidit# than specified in +F* shall be liable for rejection after giing
opportunit# to bidders for eEtending alidit# as reFuired.
#I" ,PE**I*!:
The unpriced will be opened jointl# b representaties of 09, and Finance department of
EIL in presence of attending bidders" on the da# and time specified in +F* or eEtended
thereafter. In case bid due date falls on holida# then the neEt working da# shall be
deemed to be the bid due date. A bid response sheet will be prepared and signed b# all
the participants in bid opening.
,rice bids will" howeer" be kept unopened till technoBcommercial
ealuation is complete.
After obtaining T*A or approed ,*- recommendation from complete authorit# as per
D-," the priced bids of technical and commerciall# acceptable bidders along with sealed
in house cost estimates shall be opened jointl# b# representaties of 09, and finance
8(
departments of EIL in presence of attending technicall# and commerciall# acceptable
bidders. =heneer reised prices hae been sought b# EIL from all the bidders" reised
prices onl# will be opened. -riginal price bids will be returned to the bidders. 7enerall#
onl# price implications will be sought against TH'C 0H' and reised prices shall be
sought onl# in certain eEpectation circumstances to be recorded and approed b# ED
committee.
-ffers receied in the form of teleEC telegramC faEC email in open conditions shall not b
considered.
LATE #I"S A*" RE>E.TI,*S ,- #I"S:
?nsolicited bids and bids receied after the final bid due date and time shall not be opend
and shall not be considered for ealuation.
In case minimum response is not receied the bid due date shall be eEtended b# 09,. In
case minimum response is still not receied the due date ma# b suitabl# eEtended further
in consultation with approal of project manager.
1inimum of two eEtensions shall be gien after which the offer as receied shall be
opened for further ealuation. An# deiation to aboe proision of clause shall be with
the approal of ED committee.
1inimum response shall be considered as under)
=here the enFuir# is issued to fie or more bidders" the minimum response shall be
three bids.
=here the enFuir# is issued to twoB four bidders" the minimum response shall be two
bids.
85
S+PPLIERS SELE.TI,* A*" RE.,$$E*"ATI,* -,R APPR,?AL:
Each bid both from technical and commercial considerations shall be reiewed
independentl# and erifications 9 confirmations from bidders shall be obtained b# wa#
of correspondents C discussions whereer reFuired for preparing a comparable bid
anal#sis complete in all respect. =hereer no deiations bids are inited THCT*A ma#
not be issued b# Engineering. In all other cases where price implication is not predicted"
THs will be issued b# Engineering directl# to the bidders. TH reFuiring price
implications will be issued through 09, departments. *idders shall normall# be gien a
cut off date of one week for furnishing clarification. EEtension" if an#" will be gien with
the approal of project manager. T*AC recommendations shall be processed based on
clarification receied as aboe. All responses receied before approal of T*A shall be
considered for ealuation. Al correspondentsC responses considered for ealuation are to
be listed in T*A.
T*A where eer reFuired shall be released onl# after receipt of all responsesC price
implications against THsC 0Hs. T*A shall clearl# state technical acceptance of the offer
with the acceptable deiations recorded therein and also detailing reasons for rejections"
if an#. T*A shall also list out start upsC commissioning spares madator# and special tools
9 tackles etc. to be ealuated. ,roject shall insured aailabilit# of cost estimates in sealed
enelope" prior to opening of price bids. /oweer" in case of bulk items @including
electrical" instruments 9 piping bulk itemsA reasonabilit# of prices for 'TAC '- items
will be determined b# cost engineering after opening of price bids.
#AISI. .RITERIA -,R ?E*"ER SELE.TI,*:
1. ?nbiased selection of ender.
88
&. *eat price is paid.
(. 1aterial specialist.
5. All goernment%s circularsC guidelines as receied shall be followed" and the
following shall be considered in ealuation)
The purchase preference applicable to central ,'?s" shall be recommendation as
pr the preailing got. guidelines.
This being a L'T6 projects" price preference to ''I units shall not be allowed.

Purchase Recommendation:
As soon as satisfactor# technical and commercial clarifications are obtained and
the Technical *id Anal#sis is receied in 09," 09, Department shall put up the
+ecommendation for ,rice *id -pening approal" if reFuired or proceed for ,rice
*id opening as the case ma# be in accordance with D-,.
,rice *ids shall be opened in accordance with the proision herein aboe and
09, Department shall prepare the recommendation for Award.
The lowest ealuated bid which is technicall# and commerciall# acceptable shall
be recommended for placement of order.
The recommendation for Award shall be forwarded to Finance for approal of
competent authorit# as per D-,.
,roject shall ensure aailabilit# of *udget ,roision while approing
recommendation for negotiation or award.
,riced Enelops of not acceptable bidders shall be returned to respectie bidders.
S/I-TI*!:
8;
In order to aoid splitting of order on number of bidders" particularl# when order
alue is small" shifting shall be resorted to so that time and effort on ordering"
eEpediting" inspection" etc. is saed in dealing with eEtra endors. For the purpose
of shifting cost of ordering @each orderA is considered as +s.&8"...CB.

1. *ased on lowest ealuated item wise prices the shifting shall be carried out
proided the following conditions are met)B
aA 'hifting shall be done onl# if shifting cost of each order is upto +s.
&8"...CB
bA 'hifting shall not be resorted to if the alue of the order is more than
&8K of the total order alue of the recommendation. /oweer this
ceiling will not be applicable where total order alue of
recommendation is upto +s. 1.. lakh.
cA In case the order alue on L1 bidder is more than +s 1".."...CB then
shifting shall not be resorted.
=ith aboe shifting the selected bidder for award will be deemed to be L1
bidder.
*E!,TIATI,*
2egotiation will be carried out with L1 bidder in following eEceptional situations)
=here the rate Fuoted b# the L1 bidder is not reasonable but the reFuirement is
urgent" and an# dela# in aailabilit# of the item@sA on account of re tender would
jeopardi!e timel# completion of ,roject.
In case of proprietar# items"
=here limited sources of suppl# are aailable for the item.
=here there is suspicion of cartel formation.
2egotiation with L1 bidder shall be conducted b# a committee as per D-,.
2egotiations shall generall# be conducted b# the wa# of meeting. /oweer" in certain
8<
cases" where meetings ma# not be possible" negotiation ma# be conducted b# the wa#
of faE or eBmail or telephone or ideo conference" to be confirmed b# a formal letter.
In case een after the negotiation with L1 endor" his price are not reasonable with
respect to inBhouse 0ost estimate" approing authorit# as per D-," ma# decide to
inite best reduced pricesC reerse auction from all technicall# and commerciall#
acceptable bidders. Decision for seeking best reduced prices shall be with the
approal of ED 0ommittee@EDB,'" EDB, and ED F9AA.
E?AL+ATI,* $ET/,",L,!0 -,R PRI.E I*.REASE6"E.REASE
aA An# unsolicited increaseCdecrease in price submitted b# *idder after bid due date
shall not be considered.
bA An# increaseCdecrease in price offered b# a bidder b# the wa# of price implication
or reised prices against THC 0H will be considered for ealuation.
cA An# increaseCdecrease in price subseFuent to the submission of replies and price
implication" if an# on account of THC 0H shall be treated as unsolicited.
dA In case of unsolicited price increase" the *idder@sA%s such offer@sA will not be
considered for ealuation and recommendation and shall be rejected. In case of
unsolicited price decrease" the bidder@sA%s offer shall be compared as per
originall# Fuoted prices and if the bidder@sA happens to be the recommended
*idder" the decrease in prices shall be taken into account for ordering. /oweer
aboe facts shall be recorded in 09, recommendation.
eA An# increaseCdecrease in price due to alidit# eEtension will be considered for
ealuation.
The Fuoted price for 0ommissioning and 1andator# spares whereer listed in the 1+
and T*A shall be considered for price ealuation.
'uperision 0harges @per diem ratesA for erection" testing" commissioning andC or
operation will not be considered in ealuation unless specificall# adised in 1+C ,roject
8D
coer note and informed to bidders in +F*. 2umber of da#s for which loading is to be
done shall also be identified b# department originating 1+.
After approal of +ecommendation b# competent authorit#" 09, shall issue the FaE of
acceptance followed b# detailed ,urchase -rder within & weeks along with ,urchase
+eFuisition.
The itemi!ed prices of &#ears -perational 9 maintenance 'pares shall be asked from the
bidder" howeer same shall not be taken into consideration for ealuation. 4alidit# of
offer for spares shall be reFuested from the successful endor as EIL 0ontract with
0lient. 'imilarl#" rates of Annual 1aintenance 0ontract @A10A will be sought from
*idders" whereer specified in 1+. A10 will not be considered for ealuation of bids
unless specified otherwise b# the originating department.
In case of ales" manufacturer%s maintenance contract including material ma# be
reFuired during commissioning for replacement of seals" packing etc. 'uch optional rates
will be sought from ale manufactures" if specified in 1+. These rates will not be used
for ealuation.
0ommercial loadings on account of technical parameters shall be done as per formula
proided in 1+ and in T*A.
ISS+E ,- TELE-AA ,- A..EPTA*.E A*" P+R./ASE ,R"ERS)
-n approal of ,urchase recommendation as per D-," 09, shall issue FaE of
acceptance @F-AA to the recommended *idder@sA. *ased on F-A" ,urchase -rder
shall be prepared b# 09, and ,urchase +eFuisition b# Engg. @b# 09, for items
as agreed with EngineeringA and the same shall be sent to *idder. *idder shall be
sent to *idder. *idder shall be reFuested to acknowledge receipt of F-A and
return a signed and dated cop# for out records.
8>
'uppliers@sA shall be asked to return the acknowledgment cop# of the ,urchase
-rder dul# signed and dated as a token of 'uppliers%s complete unconditional
acceptance thereof.
FaE of Acceptance @F-AA shall be numbered as gien below to facilitate project
monitoring)
Indigenous ) C...1 to &>>>
Imported ) C(..1 to (>>>
.,$$ER.IAL TER$S 4 .,*"ITI,*S A*" E?AL+ATI,*
0ommercial Terms and 0onditions and its ealuation will be approed b#
0ommittee of EDs of ,rocurement" ,roject and Finance.
Purchase Procedure for Imported Items:
,urchase procedure as specified for the indigenous purchase shall also be applicable for
the foreign purchase to the eEtent it is releant with additions andCor modifications
described in the following ,ara)
o Initiall# bids shall be called for with a alidit# of ( months. 'horter
alidit# ma# be sought in specific cases with the approal of ,roject
1anager.
o The reFuest for bids shall be hosted on EIL website with ?ser IDC
,assword issued to selected bidders. 09, ma# issue +F* on 0D as well"
whereer it is feel necessar# to eEpedite offers.
o Inolement of Indian Agents
;.
o Foreign manufacturesC bidders shall be asked to submit direct offer
without the inolement of an intermediar# as an Indian Agent. /oweer"
if Indian Agents are inoled" the *idder will be asked to indicate the
agenc# commission included in their offer. The pa#ment to supplier@sA
shall be released through LC0 after deducting the Indian Agent%s
0ommission from the Fuoted prices. Indian Agent 0ommission as
included in the offer will be paid directl# b# EIL to Indian Agent in
eFuialent Indian +upees after satisfactor# completion of the order.
o EIL Accounts will arrange necessar# foreign eEchange and open the
irreocable LC0 etc. after receiing acceptance of ,urchase -rder 9 ,*7
whereer reFuired from 'upplier. 09, shall follow for receipt of ,-
acceptance. +eceipt of ,*7 shall be ensured b# ,rojectC Finance.
=hereer" ,*7 is not receiedC dela#ed in processing" LC0 can be opened
for reduced amount @>.K where 1.K ,*7 is reFuiredA subject to bidder
accepting to bear amendment charges. This shall be part of +F*
conditions.
o It shall be ensured that the items being ordered are not coered in the
negatie list of the present EOI1 ,olic#.
o *ills selling rates of Foreign EEchange as aailable from 'tate *ank of
India or its subsidiar# shall be considered. In case" the same is not
aailable then eEchange rate taken from Economic Times will be utili!ed
for comparison purposes as on the da# of ,rice -pening and a cop# of
newspaper cutting will be kept in the file.
6idder mu!t e+!ure t#$t :or -ro-er < :$!ter )ommu+i)$tio+, t#e )o+t$)t -er!o+$l
det$il! li7e +$me, -#o+e +o", :$1 +o", em$il ID < :or %ideo )o+:ere+)e $ll rele%$+t
i+:orm$tio+ i! $%$il$ble i+ t#e o::er"
;1
PA0$E*T TER$S -,R:(
I2DIA2 *IDDE+' @all itemsA
8here $R is
only for the
supply of
material 4 no
?"R specified
in $R3
8here the $R calls for
?"R3
All items including Site
5ork3
Super:ision of
Erection6
testing6commissioning3
a3= )&J on pro(
rata asis
against dispatch
document 5ith
taxes1 duties
4transportation
charges except
excise3
S+PPL0 PRI.E:(
a.A 8K on approal of
drawings 9
manufacturing schedule
S+PPL0 4
TRA*SP,RTATI,*:(
,a#ments shall be as per
1+ calls for 4D+
eEcept 1.K pa#ment for
suppl# released on
successful completion of
site work.
,a#ment shall be 1..K
proBrata against
monthl# progressie bill
to be submitted b#
seller dul# certified b#
'iteBinBcharge.
,a#ment shall be" made
within (. da#s of
submission of bills.
3= B&J on
receipt
4acceptance of
last
consignment of
material at site
4 on
sumission of
#ank
!uarantee :alid
b.A D.K on proBrata basis
against dispatch
documents with# taEes"
and duties charges
eEcept EEcise dut#.
SITE 8,R7:(
a.A >.K against monthl#
running bills dul#
certified b# EngineersB
inBcharge.
;&
for F month3
c.A 8K on receipt of
finalCas built drawingsC
documentsCdataCmanual
in reFuisite no. of
copiesCset as per 4D+.
b.A 1.K on successful
completion 9 handling
oer of goods C
eFuipments at site.
d.A 1.K on receipt 9
acceptance of
goodsCeFuipment at site
9 submission of *ank
guarantee3
TRA*SP,RTATI,*:(
1..K on receipt of
material at site.
PA0$E*T TER$S -,R -,REI!* #I""ERS:(
Supplies:(
>8K against shipping documents.
8K pa#ment shall be made on submission of final technical documentsCdrawings
as per endor data reFuirement specified in the 1+. in case submission of final
technical documentsCdrawing as per endor data reFuirement are not reFuired as
per 1+" this pa#ment shall be made along with aboe.
ALL OTHER PAYMENTS ITEMS FOR /4REGN 6IDDERS ARE SAME AS INDIAN
BIDDERS.

;(
-T/E+ TE+1')B
All pa#ments shall be released within (. da#s of receipt of inoice 9 all the reFuisite
documents" complete in all the respects.
*ank charges of respectie bankers shall be to respectie account.
An# pa#ments before dispatch of material shall be considered as adance pa#ment. 'uch
pa#ment shall be interest bearing P1(K per annum 9released against eFuialent bank
7uarantee which shall be alid up to contractual delier# date.
All *ank 7uarantee shall be issued through 2ationali!ed Indian *ankC Indian 'cheduled
*ank 9 the claim period of three month after its eEpir#.
'ellers reFuire multiple dispatches will be restricted to maEimum three dispatches.
RE>E.TI,*6L,A"I*! .RITERIA -,R "E?IATI,*S:(

A *id with incomplete scope of work does not meet the Technical reFuirements shall be
considered as nonBresponsie 9 ma# be rejected.
*idders are reFuested to note that eEpectationsCmodifications taken b# them to the
submission of reFuisite performance *ank 7uarantee including its alue" period9
applicabilit# as per guarantee clause of general purchase conditions shall make the mid
liable for rejection.
"E?IATI,* T, PRI.E RE"+.TI,* S./E"+LE -,R "ELA0E" "ELI?ER0
<PRS=:(
T-4B Total -rder 4alue.
D-4B Dela#ed order alue.
;5
S3no Terms offered y the idders Price loading
B3 1K of D-4 up to maE. of 1.Kof T-4 2- loading
%3 1K of D-4 up to maE. of 1.K of D-4 &.8K
F3 -ther Than the aboe 8K
PRI.E ?ARIATI,*K(
2o Terms offered b# the bidders ,rice loading
1. Firm prices 2o loading
&. In case of price ariation
formula
=ith ceiling.
Loading b# ceiling percentage offered.
(. 2o ceiling on the formula
specified.
1.8 times the maE. ceiling specified b# other
*idders.
5. 2o formula 9 no ceiling
specified b# the bidders.
-ffer ma# be rejected.
,rice loading on account of pa#ment terms at ariance with *idding documents pa#ments
will be loadedP1(K per annum for the releant period.
E?AL+TI,* 4.,$PARISI,* ,- #I"S:(
The ealuated price of Indian bidders are)B
F-T Dispatch point price Fuoted b# the bidders.
Fright charges up to site as Fuoted b# bidders.
0ost of mandator# spares" if identified in the 1aterial +eFuisition 9
0ommissioning spares will be included for ealuation of bids" but cost of spares
of two #ears trouble free operation shall be eEcluded.
0ommercial loading. If an#.
;8
Loading on account of technical parameters" if specified stipulated in the 1aterial
+eFuisition.
Loading on account of commercial terms 9 conditions 9 technical ,arameters
calculated on F-T dispatch point price.
,urchase preference to central goernment public sector undertaking shall be
allowed as per goernment instructions.
If freight charges are not Fuoted" loading shall be done b# maEimum freight
Fuoted b# the seller.
TRA*SP,RTATI,*:(
*idders to note that material against this +FH are reFuired to be dispatched on
door delier# basis through an# of the bank approed transport compan#.
PR,>E.T A+T/,RIT0 .ERTI-I.ATE <PA.=6ESSE*TIALIT0
.ERTI-I.ATE <E.=:(
Indian bidders ma# note that the owners will not issue an# ,A0 9E0 for aailing
the project rate of custom dut# on imported raw material. *idders ma# consider
the merit rate of dut# on imported raw material in the Fuoted price.
Further no ariation in taEes" duties" custom dut# 9 foreign eEchange rate for
importation of raw material shall be considered.
*ID ,+I0I27)B
In case of discrepanc# in $unit price% 9 $total price% for an# item" the Fuoted unit
price shall preail for ealuation and ordering.
In bid price no oerwriting or use of fluid is permitted. All corrections shall be
signed b# the bidders otherwise it shall be liable for rejection.
/i+$lly '#e+ $ %e+dor i! !ele)ted, /4A >:$1 o: $))e-t$+)e? i! !e+t to #im :or t#e
)o+:irm$tio+ t#ereo:"
;;
Risk management in LST7 projects
Types of risks
2. Price and currency
Fluctuations
1. Late completion 3. Overall risk
Of the project
LA2E 04*LE2I4N 4/ 23E *R4JE02: One of the critical risk inole in an!
LST" #ro$ect is the co%#letion of the &hole #ro$ect on ti%e. To esti%ate the e'act ti%e
for co%#letin( a #ro$ect itself is a )iffic*lt task+ a,oe that to %aintain the #ace of &ork
re-*ire) to co%#lete that $o, is een %ore )iffic*lt.
A #ro$ect can ,e )ela!e) )*e to ario*s reasons as follo&s.
Delier! of %aterial an) e-*i#%ents *se) in the #ro$ect is )ela!e)
,! the en)ors.
Riots an) strike o*ts at the site )*e to (oern%ent interention an)
#olitical )ist*r,ances.
Inefficienc! inc*rre) on the #art of EIL/s e%#lo!ees+ etc.
In case of an# dela# which occur due to the default on EIL%s part or if EIL repudiates the
0ontract before completion of the serices EIL shall be liable to pa# the client LiFuidit#
Damages @LDA.
;<
LD%s aries from ,roject to ,roject for eEample if the compan# is enable to complete the
,roject within the stipulated time period then the 0lient can force LD at a rate of ..&8K
of the Total EIL Fee per week of dela# subject to a maEimum of 8K of the total EIL Fee
or an# such smaller amount as ma# be fiEed b# the 0lient.
EIL coer this risk on ack to ack asis i.e. it charges LD on dela# of delieries from
its endor. For eEample a 4endor of 1achineries is unable to delier a machine on time
than EIL as per the 0ontract with the 4endor would charge 1K @ma# ar#A of the total
alue of 0ontract per week" subject to a maEimum of 1.K of the 0ontractual alue.
/oweer" if dela# occurs due to the reasons be#ond EIL%s control like +iots" 0iil =ar"
'trikes etc. EIL approaches its client with full details for eEtension of time limit for
completion of works.
PRI.E A*" .+RRE*.0 -L+.T+ATI,*S: Due to increasing inflation rate" it
is Fuite a difficult task to predict the prices of arious items especiall# in case of long
term projects. It is becoming neEt to impossible to ascertain the prices of steel and
cement which hae been facing a remarkable increase in the recent #ears.
9Price escalation; is the strateg# used b# the compan# to o:er come this risk.
?nder this" 0ompan# Fuotes the price of the raw material at the time of 0ontract
and the 0lient is liable to pa# an# ariations in the price. For this purpose a ,rice
4ariation 'tatement is prepared and compan# raises inoice on its client for the
changed amount.
For this purpose a special 0lause is included in the 0ontract stating that IIn case of
Escalation in the 0ost Estimates which ma# occur due to reason be#ond the control of
EIL" EIL would approach to client with full details of sanction there of .
For eEample the compan# incorporates a clause in its contract on the escalation in the
price of steel for a gien job then according to contract
The ,rice 4ariation is applicable on suppl# price of bulk steel material for site
fabrication Cconstruction for permanent incorporation in work i.e. for structural steel
;D
@reinforcement bars 9 steel grating plates onl#A. The contract price shall be adjusted
for an# on Account 4erification in 'teel ,rices. The following formula is used for
calculation of escalation.
4mN I+ E H E 1oB1
1o
4m N 4ariation in material cost
I+ N +ate of 'teel item declared b# 'AIL and due date of submission of last price
bid.
H N Huantit# of 'tructural 'teel date eEecuted b# 0-2T+A0T-+.
1-N All India 4ariation ,rice IndeE for Iron 9 'teel commodit# released b# office
of Economic Adisor to 7oernment of India" 1inistr# of 0ommerce and Industr#
at the time of last price bid.
1 N All India 4ariation ,rice IndeE for Iron 9 'teel commodit# released b#
office of Economic Adisor to 7oernment of India" 1inistr# of 0ommerce and
Industr# at the Time of placement of ,urchase -rder to 1aterial 'upplier.
In order to proide a coer against price rise for items that are not listed in the
contract for price escalation" appropriate contingencies are made at the time of
costing for this purpose.
-luctuations in foreign exchange rates
In case of imported items for L'T6 projects" compan# do not undertake outside hedging
in large scale.
;>
'o compan# in its eer# contract includes a clause to the effect that an# IIn case of
ariation in the 0ost Estimates which ma# occur due to fluctuations in the foreign
eEchange rates" it would approach to its client with full details of sanction there of.
In those situations compan# is 1..K protected against an# fluctuations in foreign
EEchange rates.
/oweer" EIL also undertakes InB/ouse hedging which is calculated on the basis of the
weighted aerage of past four #ear trend of the foreign eEchange market.
,?ERALL RIS7 .,?ERI*!: Apart from the aforesaid risks the compan# protects
itself against the risks like accident" fire" theft" natural calamities etc. through an oerall
risk coering insurance polic# it includes *uilders All +isk @barA
((#uilder risk insurance is a speciali!ed polic# designed to coer the propert#Bloss
eEposures associated with construction projects. This coerage protects the owner%s
inestment from direct ph#sical loss to the storage during the progress of construction.
0oerage ma# be written for the completed alue of the project and can be eEtended for
facilities under eEpansion. *uildings under construction ma# be included" and then
endorsed to finished operations.
The insuranceBreFuirements section of the construction contract should specif# who is
responsible for purchasing the builder%sBrisk insurance and eEactl# what coerage to
include in the polic#. In some cases" the builder ma# be responsible for proiding
coerage. In others" it ma# be the storage ownerCdeeloper%s responsibilit#.
((.ontractors All Risk policy Q It coers eEposure causing *odil# Injur# or ,ropert#
Damage with eEceptions. It coers #ou acting in #our capacit# as a contractor onl#" for
eEample" kids pla#ing on the job site fall in an uncoered trench. A 0A+ polic# would
respond on #our behalf. It would also respond to a claim such as one of #our emplo#ees
accidentall# damages the plumbing in a building 9 causes water damage.
<.
((Professional Indemnity coers professional serices such as design work" site
assessments 9 the like. An# contractor that does an# sort of design work needs a
,rofessional Liabilit# polic# in case the# make design errors.




<1
A 0ASE:=
I2 T/E L'T6 ,+-:E0T" T/E 1AI2 -*:E0TI4E I' T- 7ET T/E TE0/2I0AL 9
0-11E+0IAL A00E,TA*LE 1ATE+IAL F-+ T/E ,+-:E0T AT T/E L-=E'T
,-''I*LE ,+I0E '- T/AT 0-1,A23 0A2 1A6E *ETTE+ ,+-FIT'.IF T/E
4E2D-+' 'E2D T/EI+ *ID' =IT/ '-1E DE4I'TI-2' LI6E DELA3 I2
DELI4E+3 ,E+I-D" DE4IATI-2' I2 T/E ,A31E2T TE+1' 9 2-2
'?*1I''I-2 -F ,E+F-+1A20E *A26 7?A+2TEE" T/E2 T/E 0-1,A23
=-?LD 0/A+7E '-1E L-ADI27 A' A ,E2ALT3 A7AI2'T T/-'E
DE4IATI-2' I2 -+DE+ T- E4AL?ATE ALL T/E 4E2D-+' -2 'A1E
7+-?2D.

'?,,-'E T/E+E I' A 0A'E" =/E+E EIL /A' A2 ?+7E2T
2EED -F I/EAT EO0/A27E+G =/I0/ I' 7-I27 T- *E ?'ED I2 IT'
?,0-11I27 ,+-:E0T 2A1EL3 ,O19 ,O&. F-+ T/I'" FI+'TL3 T/E
I2F-+1ATI-2 I' 'E2D T- 4A+I-?' 4E2D-+' I2 T/E F-+1 -F +FH
AL-27 =IT/ T/EI+ TE+1' A2D 0-2DITI-2' 9 T/E L-ADI27 T/AT
=-?LD *E 0/A+7ED *3 T/E1 I2 0A'E -F A23 DE4IATI-2' F+-1 T/E
TE+1' -F EIL.
FE= 4E2D-+' 2A1EL3 I*",TE./ ,- ./E**AI1 7+$AR ELE.TRI.ALS
-R,$ $EER+T1 RI$A TRA*S-,R$ER -R,$ #A*!AL,RE
A*"?,LTA$P-R,$ ?A",-ARA +E',-2DED *3 'E2DI27 T/EI+ *ID%'
@?2,+I0ED 9 ,+I0ED 'E,E+ATEL3A T- T/E 0-1,A23.T/E'E 4E2D-+'
'E2D T/EI+ *ID' *?T =IT/ '-1E DE4IATI-2' F+-1 T/E TE+1' -F EIL.
T/E *EL-= 1E2TI-2ED 0A'E EOI*IT' T/E *A'I' ,+-0ED?+E -F *ID
A2AL3'I' A2D 0AL0?LATI-2 -F LI 0-'IDE+I27 L-ADI27 FA0T-+.
<&
$,"EL R-I SE*" T, ?ARI,+S ?E*",RS
REI+EST -,R I+ATATI,* <R-I=
+ef.',0C;(1DC1..;C.88C;(1>C5;C;(1DC.1<C..81C;(1DC.<1CR.CRC...
Date) .5C.5C&..D
1C'. O3L LTD.
>.< ,+A6A'/ DEE,
<"T-L'T-3 1A+7
0-22A?7/T
,LA0E
2E= DEL/IB11...1
,/. 2-. .11BBBBBBB
India.
FaE 2o.B.11BBBBBBB
EBmailBBBBBBBB
0lient ) Indian oil corporation limited
,roject ) ,O1 9 ,O& ,+-:E0T
+fF no.
',0C;(1DC1..;C.88C;(1>C5;C;(1DC.1<C..81C;(1DC.<1CR.CRC...
Item) heat eEchanger
Due date ) Immediatel# b# faE 9 EBmail
+eference.
-ur purchase order no. ',0C;(1DC1..;C.88C;(1>C5;C;(1DC.1<C..81C;(1DC.<1R.CRC...
Item) /EAT EO0/A27E+
7entlemen"
*ids are reFuested for spares as per the enclosed list" against the aboe referred purchase
order. The bids ma# be submitted through return eBmail or faE or b# courier" for the
captioned item in complete accordance with +FH documentCattached.
0omposite *ids should be submitted" in a single enelop. The offer shall onl# contain
dul# filled up price schedule as per the enclosed format. ,lease do not furnish an#
technical and commercial informationCdeiation other than the price schedule.
,rices shall be filled up strictl# in the in closed price schedule format" without an#
modifications.
0ontact person for this +FH are) 1r.O" 'enior 1anager @09,A) EBmail BBBBBBBBB
<(
The bids will be opened immediatel# on the receipt of the same. There shall be no public
opening of bids.
As purchaser intends to contract directl# with supplier of the goods for which bids are
inited" the bids should be prepared b# the supplier and submitted directl#. ,urchaser
reseres the right to reject offers made b# intermediaries.
The order" if placed" will be issued b# EIL.
The bidder shall bear all costs associated with the preparation and submission of its bid"
and the purchaser shall in no case be responsible or liable for these costs regardless of the
conduct or outcome of the bidding process.
The enclosed Icommercial terms and conditions @anneEure 1AG shall be applicable.
=e resere the right to make an# changes in the terms and conditions of purchase and to
reject an# or all the bids.
3ours trul#
1r.O
'enior 1anager @0 9,A
Enclosures)B
,+I0E '0/ED?LE F-+1AT @1 ,ageA
A22EO?+EB 1) 0-11E+0IAL TE+1' A2D 0-2DITI-2'

<5
PRI.E S./E"+LE -,R$AT <I*"IA* #I""ERS=
+FH 2o.) ',0C;(1DC1..;C.88C;(1>C5;C;(1DC.1<C..81C;(1DC.<1CBBBBCRC...
-+DE+ 2o.) ;(1DC1..;C.88C;(1>C5;C;(1DC.1<C..81C;(1DC.<1CR..CRC...
,roject) ,O19,O& ,+-:E0T
Item) heat eEchanger
'.2o. ITE1
DE'0+I,TI-2
TA7 2-. HT3
@nos.A
?nit ,rice
@+s.A -n
F-T
dispatch
point basis
Total
amount @rs.A
on F-T
dispatch
point basis
1. DE D=7 2-.
&/>51;>
&.;B,(AC* 1
&. 2DE D=7
2-. &/>51;<.
&.;B,(AC* 1
Transit risk insurance shall be arranged b# EIL.
The salient features of the offer are as below)
1. Dispatch point BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
&. EEcise dut# Meducation cess SSSSSSSSSSSSSK EEtra
(. EEcise dut# ) Tariff 'ub heading 2o. SSSSSSSSSSSSSSSSSS
5. 0entral sales TaE against form $0% SSSSSSSSSSSSSK EEtra
8. 4AT against form $D1%
@applicable for supplies from /ar#ana 'tateA
SSSSSSSSSSSSSK EEtra
;. 0enatable 'erice taE on fright 0harges" if an#
@not included in the freight chargesA
SSSSSSSSSSSSSK EEtra
<. ,acking 9 Forwarding charges Included
D. Freight 0harges eEtra upto ,roject site SSSSSSSSSSSSSSK EEtra
-+
1
.
0?++E203 -F H?-TE SSSSSSSSSSSSSSSSSSSSSSSS
&
.
AI+,-+T -F '/I,1E2T SSSSSSSSSSSSSSSSSSSSSSSS
(
.
,A06I27 9F-+=A+DI27 9F0A 0/A+7E' I20L?DED
5
.
AI+ F+EI7/T 0/A+7E' eEtra up to DEL/I
AI+,-+T" I2DIA
SSSSSSSSSSSSSSK EOT+A
We confirm total compliance to the commercial terms an conitions enclose
!ith the "#$%
&&&&&&&&&&&&&&&&&
&&&&&&&&&&&&&&&&&&&&&&&&&
<8
@2A1E -F *IDDE+A
@'I72AT?+E -F *IDDE+A
.,$$ERI.AL TER$S A*" .,*"ITI,*S
"ELI?ER0 PERI,"
Indian idders to deli:er in eight month on -,T dispatch point asis from the date
of -, and P,3
PA0$E*T TER$S:(
-,R I*"IA* #I""ERS
1..K pa#ment including taEes" duties and transportation charger shall be released after
receipt 9 acceptance of material at site against submission of dispatch documents.
-,R -,R!EI!* #I""ERS
1..K pa#ment shall be made through wire transfer against submission of shipping
documents.
,--ER ?ALI"IT0:(
-ffer alidit# shall be one month from the final bid due date.
PER-,R$A*.E #A*7 !+ARA*TEE
,erformance bank guarantee shall not be reFuired to be furnished b# bidders.
I*SPE.TI,*
<;
'upplier%s inBhouse inspection and test certificate shall be alid for inspection
reFuirement.
TRA*SP,RTATI,*
F-+ I2DIA2 *IDDE+')
All indigenous materials shall be transported through 7ATICO,' 0argoC0ourier on
freight preBpaid basis.
ALL F-+EI72 '/I,1E2T')
All foreign shipments shall be airBfreighted @,ort of entr# shall be DelhiA.
TER$I*ATI,*
TER$I*ATI,* -,R "E-A+LT
The purchase reseres the right to terminate the purchase order or na# part thereof b# a
written notice to the supplier if)
The supplier fails to compl# with the terms of purchase order including specifications and
other technical reFuirements.
The supplier becomes bankrupt or goes to liFuidation.
The supplier fails to eEecute the purchase order on timeCor replace the rejected goods
promptl#.
?pon receipt of the said termination notice" the supplier shall discontinue all work on the
purchase order and matters connected with it.
<<
The purchaser in that eent will be entitled to get the contract eEecuted from another
agenc# and recoer the eEcess pa#ment oer the supplier%s ,urchase -rder amount" if
an#" from the supplier.
TER$I*ATI,* -,R .,*?E*IE*.E
EIL resere the right to terminate the order" in whole or in part" at an# time for its
conniance. /oweer" the pa#ment shall be released to the eEtent to which work has been
eEecuted as determined b# ,urchaser till the date upon which such termination becomes
effectie.
!,?ER*$E*T LA8 A*" >+RI"I.TI,*:
The order shall be goerned b# Indian Law. All disputes relating to this order between
the purchaser and the supplier shall be deemed to hae risen in the 'tate of Delhi and is
subject to :urisdiction of 2ew Delhi 0ourts" India.
ARIT/$ATI.AL ERR,RS 8ILL #E RE.TI-IE" ,* T/E -,LL,8I*!
#ASIS:
If there is discrepanc# between the unit price and the total price that is obtained b#
multipl#ing the unit price and Fuantit#" the unit price shall be preailing and the total
price will be corrected.
If there is discrepanc# between the total bid amount and the sum of total prices" the sum
total prices shall preail and the total bid amount will be corrected.
8ARRA*TIES6 !+ARA*TEE
The supplier shall guarantee that an# and all materials used in eEecution of the order shall
be in strict compliance with characteristics" reFuirements and specifications agreed upon
<D
and that the same shall be free from an# defects. The supplier will guarantee that all
materials shall be repaired or replaced as the case ma# be" at his own eEpense in case the
same hae been found to be defectie in respect of materials" workmanship or smooth
and rated operation within a period of 1& months after the same hae been put up in
serice or 1D months from the date of shipment" whicheer is earlier.
'hould an# defect deelop during guarantee period" it shall be rectified promptl# free of
charge b# the supplier and all eEpenses for transportation and return of goods
necessitated for such repair or replacement shall be borne b# the supplier.
AR#ITRATI,*
All disputes and Fuestions whatsoeer which shall arise between the purchaser and the
supplier out of or in connection with this agreement as to the construction or application
there off or to the respectie right and obligations of the parties there Q under or b#
reason of the suppl# or failure or refusal to suppl# an# material or as to an# other mater in
an# wa# relating to these presence" shall be referred to the arbitration" in accordance with
Indian arbitration and conciliation act" 1>>;. The enue of such arbitration shall be 2ew
Delhi.

<>
L,A"I*! -A.T,R
PRS: ( "E?IATI,* T, PRI.E RE"+.TI,* S./E"+LE -,R "ELA0E"
"ELI?ER0 <PRS=:(
T-4B Total -rder 4alue.
D-4B Dela#ed order alue.
S3no Terms offered y the idders Price loading
B3 1K of D-4 up to maE. of 1.Kof T-4 2- loading
%3 1K of D-4 up to maE. of 1.K of D-4 &.8K
F3 -ther Than the aboe 8K
PA0$E*T TER$S
2o Terms offered b# the bidders ,rice loading
1. Firm prices 2o loading
&. In case of price ariation
formula
=ith ceiling.
Loading b# ceiling percentage offered.
(. 2o ceiling on the formula
specified.
1.8 times the maE. ceiling specified b# other
*idders.
5. 2o formula 9 no ceiling
specified b# the bidders.
-ffer ma# be rejected.
*ri)e lo$di+. o+ $))ou+t o: -$yme+t term! $t %$ri$+)e 'it# 6iddi+. do)ume+t!
-$yme+t! 'ill be lo$ded@13A -er $++um :or t#e rele%$+t -eriod
D.
#I" A*ALASIS A*" RE.,$$E*"ATI,*S <unpriced=
Sn ?E*",R I*", TE./ 7+$AR
ELE.TRI.AL
RI$A
TRAS-,R$ERS
?,LTA$P
2-. TE+1' 9
0-2DITI-2'
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1. ,+I0E *A'I' F-+
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F-+
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,-I2T
F-+ DE',AT0/
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F-+
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&. F-+ DE',AT0/
,-I2T
0/E22AI 1EE+?T *A27AL-+E 4AD-DA+A
(. ,A06I27
9F-+=A+DI27
I20L?DED I20L?DED I20L?DED I20L?DED
5. F+EI7/T ?,T-
,+-:E0T 'ITE
..<8K EOT+A &.<(K EOT+A +' 18...CB,E+
T+A2'F-+1E+
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*3 EIL *3 EIL *3 EIL *3 EIL
;.1 EO0I'E D?T3 M
ED?0ATI-2 0E''
@15K
M(K0E''A
EOT+A
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<.1 0'T =IT/ F-+1
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2-T
A,,LI0A*LE
&K EOT+A &K EOT+A &K EOT+A
<.& 4AT =IT/-?T
F-+1 IDG
5K EOT+A 2-T
A,,LI0A*LE
2-T
A,,LI0A*LE
2-T
A,,LI0A*LE
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D DELI4E+3 ,E+I-DB
.D 1-2T/' -2 F-T
DE',AT0/ ,-I2T
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DATE -F F-AC,.-.
A00E,TA*LE A00E,TA*LE A00E,TA*LE A00E,TA*LE
> ,+I0E +ED?0TI-2
F-+ DELA3 I2
DELI4E+3@1K D-4B
1.KT-4A
DE4IATI-2 DE4IATI-2 DE4IATI-2 A00E,TA*L E
1. PA0$E*T
TER$S:(
8K -2 A,,+-4EL 1.K -2 &.K -2 A00E,TA*L E A00E,TA*L E
D1
-F D+7' A,,+-4EL -F
D+7'
A,,+-4EL -F
D+7'
D.K A7AI2'T
DE',AT0/
D-0?1E2T
T/+-?7/ EIL
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DE',AT0/
D-0?1E2T
T/+-?7/ EIL
D.K A7AI2'T
DE',AT0/
D-0?1E2T
T/+-?7/ EIL
A00E,TA*L E A00E,TA*L E
8K -2 +E0EI,T -F
FI2AL D+7'
1.K -2 +E0E,IT
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-F
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FI+1C4A+IA*LE
FI+1 FI+1 FI+1 FI+1
1& ,E+F-+1A20E *7B
1.K
A00E,TA*L E A00E,TA*L E A00E,TA*L E A00E,TA*L E
1( 7?A+A2TEE
,E+I-DB
1&C(.1M(1-2T/'
A00E,TA*L E A00E,TA*L E A00E,TA*L E A00E,TA*L E
15 ,A+T -+DE+ A00E,TA*L E A00E,TA*L E A00E,TA*L E A00E,TA*L E
18 +E,EAT -+DE+
1; 7E+2E+AL
,?+0/A'E
0-2DITI-2'
A00E,TA*L E A00E,TA*L E A00E,TA*L E A00E,TA*L E
1< ',E0IAL
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*IDDE+'
A00E,TA*LE A00E,TA*LE A00E,TA*LE A00E,TA*LE
1D -FFE+ 4ALIDIT3B
(1 F+-1 *ID D?E
DATE -F &&B.5B&..D
&1B.<B&..D &1B.<B&..D &1B.<B&..D &1B.<B&..D
1> TE'TI27 0/A+7E'
A' ,E+ 1+CT,I
0/A+7E'
I20L?'I4EC
2-T
+EH?I+ED
I20L?'I4EC
2-T
+EH?I+ED
I20L?'I4EC 2-T
+EH?I+ED
I20L?'I4EC
2-T
+EH?I+ED
&. ITE1' H?ATEDC20 ALL C2IL ALL C2IL ALL C2IL ALL C2IL
&1 '?,E+4I'I-2
0/A+7E'
2-T
+EH?I+ED A'
,E+ T*A
2-TE A(
2-T
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,E+ T*A 2-TE
A(
2-T +EH?I+ED
A' ,E+ T*A
2-TE A(
2-T
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2-TE A(
&& TE0/2I0AL
A00E,TA20E
A00E,TA*LE
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A00E,TA*LE
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A00E,TA*LE
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A00E,TA*LE
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&( 0-11E+0IAL
A00E,TA*ILIT3
A00E,TA*LE A00E,TA*LE A00E,TA*LE A00E,TA*LE
&5 1A2DATE F-+1 '?*1ITTED '?*1ITTED '?*1ITTED '?*1ITTED
D&
#I" A*AL0SIS A*" RE.,$$E*"ATI,*
.AL+LATI,* ,- L,A"I*! -A.T,RS:
?E*",RS
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7+$AR
7+$AR
ELE.TRI.AL RI$A ?,LTA$P

*A'I0 ,+I0E 1 1 1 1

TE'TI27 0/A+7E' .....- . . .
@I20LA @I20LA @I20LA @I20LA
T/I+D ,A+T3 I2',E0TI-2 0/A+7E' not reFuired not reFuired
not
reFuired not reFuired

,A06I27 9 F-+=A+DI27 . . . .
@I20LA @I20LA
-,T "ESPAT./ P,I*T PRI.E B B B B

F+EI7/T ....<8 ...&<( ...1.(< ...&
<8K &.<(K
18...C
155<... &K
0E24ATA*LE 'E+4I0E TAO -2
F+EI7/T . . .

EO0I'E D?T3 M 0E'' ..155& ..155& ..155& ..155&
15.5&K 15.5&K 15.5&K 15.5&K
EO0I'E D?T3 -2 F+EI7/T

0'TC4AT 1MeE ...58<;D ...&&DD5 ...&&DD ...&&DD5
5K &K0'T &K0'T &K0'T
0'TC4AT -2 F+EI7/T . . . .

-,T SITE PRI.E B3B)DG'E B3B)GFEG B3BDDGC B3BED&EG

loading of deiation to pa#ment terms ....(D>1D ....;8 . .
loading of deiation to ,+' ...8>D<(5 . . .
loading of performance bank guarantee . . +E:E0T

T,TAL B3%'B%FF% B3%&&EEG B3BDDGC RE>E.T

LE'')0E24ATA*LE EO0I'E D?T3 ..155& ..155& ..155&
LE'')0E24ATA*LE 4AT ...58<;D . .
LE'')0E24TA*LE 'E+4I0E TAO . . .
D(
*ET L,A"I*! -A.T,R N T-TALB
0E24ATA*LE E.DB0A24ATA*LE 4ATB
0E24ATA*LE 'E+4I0E TAO B3&DB%'C% B3&C''EG B3&FF%C

E27I2EE+' I2DIA LTD. +FH 2-.
2E= DEL/I ITE1)
/EAT
EO0/A27E+
D5
#I" A*AL0SIS A*" RE.,$$E*"ATI,*S<PRI.E"=

PRI.E .,$APARISI,*

S3no3
APPR,A
ERRE.TI,*
8EI!/T
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<mm=
ITE$ *,
IT03
<+*IT=
+*IT
PRI.E
<RS=
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<RS= L,A"I*!
TOTAL
AMOUNT
(RS)

I*",TE./(./E**AI



1 8... ;.(8 (1BEB1.; 1 D"<>;"... 1..... 1..<1&;8 9529974.961

& ;.. 5 (1BEB1.< 1 1"..."... 1..... 1..<1&;8 1178391.688

( 1... 5 (1BEB111 1 1"1;>"... 1..... 1..<1&;8 1359435.502


7+$AR ELE.TRI.ALS($EER+T

1 8... ;.(8 (1BEB1.; 1 5...... &..... 1..8;;D5 4438072.8
L 1
& ;.. 5 (1BEB1.< 1 D..... 5.... 1..8;;D5 887614.56

( 1... 5 (1BEB111 1 >..... 5.... 1..8;;D5 993282.96


RI$A TRA*S-,R$ERS(#A*!L,RE

1 8... ;.(8 (1BEB1.; 1 8D..... 518... 1..((&8 6421650.459

& ;.. 5 (1BEB1.< 1 8..... 5.... 1..((&8 557955.1485
L 1
( 1... 5 (1BEB111 1 D&8... 5.... 1..((&8 893761.4879
L 1

D8
Recommendations for LST7 Projects
The compan# should tr# aoiding the use of Iprice escalation clauseG for each and
eer# item as it ma# gie the wrong impression in the mind of the client and the#
ma# switch oer to some other compan# for their other projects.
The compan# should enter into more of the hedging contracts as it gies them the
opportunit# to earn some profit rather than making the clause of pa#ment for
ariations b# the client.
At the time of cost estimation compan# should tr# to do more research work to
ascertain the future price of the material 9 eFuipments rather than keeping the
clause Ipa#ment on the basis of actualG as in case of an# fall in the price compan#
get liable to reimburse the client for the difference amount and thereb# completel#
finishes the opportunit# to earn an# profit under that contract.
As we hae seen that compan# in its business preferences has shifted its focus
from just doing E,0 contracts to L'T6 contracts. *ut later being not able to
generate as much profit as much is eEpecting from it. Therefore" compan# need to
access cost effectie funds for project management from domestic or international
agencies and multilateral funding agencies.
At the time when more international pla#ers are coming into the market" EIL does
not do much of the competitors stud# or anal#ses on large scale" which ma# result
in lose of future clients. 'o compan# must focus on some promotional actiities
especiall# for their serices in L'T6 projects.
EIL would need to take urgent action to consolidate its own internal strengths and
forge itself to enter into some strategic partnership to upgrade itself in technolog#"
to sustain its presence in this fast changing business enironment.
D;
EIL has a large pool of Fualified technical manpower. This pool is likel# to be the
target of new pla#ers" particularl# the international consultanc# companies and
EIL should address /+D with positie measures" building up emplo#ee lo#alt#
and commitment.
.
D<
DD
#iliography
Reference from)
EIL 7uidelines
D,E 7uidelines
www.eil.co.in
www.l9tltd.com
D>