Cost Appraisal
Civil cost appraisal of hydro electric projects
The estimate of H.E. Projects is framed in accordance with IS: 4877-1968 `Guide
for Preparation of Estimates for River Valley Projects'. Accordingly the `Hydro
Electric Installation' is dealt in Unit-III of the code. This unit is divided into
Minor heads under `DIRECT Charges' & `Indirect Charges'.
Direct Charges:
Direct charges include I-Works, II-Establishment, III-Tools & Plants, IV-Suspense
and V-Receipts and Recoveries. Indirect Charges include (i) Captialised value of
abatement of land revenue (ii) Audit & account charges.
I. The provisions from `A'-Preliminaries to `Y' Losses on Stock fall Under-I Works
which is further subdivided into detailed sub-heads accordingly to the nature and
type of works. These are illustrated as under:-
1. `A'-Preliminary
The items covered are Surveys and Investigations, Model Studies, Preparation/Printing
of Detailed Project Reports(DPR). The provision under this sub-head should be limited
to 1% to 2% of I-Works.
2. `B'-Land
This item covers the provision for land acquisition, relocation of communication,
R&R Plan. There is no limit for this head.
3. `C'-Works
This is intended to cover provisions for Head Works consisting of dam, spillway,
pick up weir, trench weir, barrage etc.
4. 'J'-Power Plant Civil Works
This shall include the cost of Intake Structure, desalting Chambers, Head Race Tunnel,
Surge Shaft, Pressure Shaft, Penstock, Power House, Tail Race Tunnel, Switchyard
and Hydro Mechanical Works.
5. `K'-Buildings
Includes the cost for buildings for execution of project both for civil & E&M works.
The provision is limited to 5% to 8% of I-Works.
6. `M'-Plantation
Provision for avenue trees and arboricultural around the Power House, downstream
of dam etc. are covered. No limit is suggested.
7. `O'-Miscellaneous
Provisions for Miscellaneous works (capital and maintenance) is charged under this
head which is generally limited to 4% of I-Works.
8. `P'-Maintenance
Provision towards maintenance of ongoing works during construction is covered. This
is limited to 1% of I-Works less A, B and Q.
9. `Q'-Special T&P
Provision towards the cost of construction equipment and inspection vehicles is
covered here. This is generally charged as 25% of capital cost of construction machineries
and 100% cost of the inspection vehicles.
10. `R'-Communications
The access roads to dam site, Power house, quarry, railway siding etc. is covered
in this sub-head. There is no limit prescribed.
11. `X'-Environment & Ecology
The cost towards environment and ecological impact due to the project is covered
here. There is no limit to this provision.
12. `Y'-Loses on Stock
Provision under the sub-head is generally at 0.25% of cost of I-Works.
II. Establishment
The provision towards the cost of engineering, supervision and administrative services
is covered under this head. This is in the range of 8% to 10% of I-Works excluding
the cost on `B' Land.
III. Tools and Plants
The provision towards the cost of engineering, supervision and administrative services
is covered under this head. This is in the range of 8% to 10% of I-Works excluding
the cost on `B' Land.
IV. Suspense
The provision under this head is kept NIL.
V. Receipts and Recoveries
This is meant to account for the estimated recoveries by way of resale or transfer
of temporary buildings and special T&P. Recoveries shall be as under:-
Temp buildings = 15% of the capital cost
Special T&P = 18.75% of the capital cost
Inspection Vehicles = 25% of the cost of vehicles
Indirect charges
Capitalised value on abatement of land revenue:- This is taken as 5% of the cost
of agricultural land or 20 times of the land revenue cost whichever is more. Audit
& account Charges: This is taken as 1% of cost of I-Works.
Completion cost
The completion cost is arrived at by phasing out the project cost based upon envisaged
completion period and allowing an escalation due to inflation on material & labour.
The component of interest during construction is also taken into account on loan
arranged from external sources.