EAST CENTRAL RAILWAY - Indian Railways

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iv)
The calculations for adjustment in the amount payable to the contractor shall be
made on the value of work done in each quarter by the contractor. Quarterly periods shall
be counted commencing from the month following the month in which tender had been
opened. Refer (D) below also.
v) The calculations for adjustments should be based on the average price index of
the three months of the quarter.
vi)
The demands of escalation of the cost may be allowed on the basis of provisional
indices made available by the Reserve Bank of India. Any adjustment needed to be done
based or the finally published indices shall be made as and when they become available.
Base period for determining price variation clause should be either from the month of
opening of the tender or if required from the month of negotiation as the case may be.
vii) Price variation clause will not apply, if the price variation is upto 5%
reimbursement/recovery due to variation in prices will continue to be made only for the
amount in excess of 5% of the amount payable to the Contractor.
a) For contracts upto two years duration :
The total amount of reimbursement/recovery due to variation in prices of the several
components, shall be limited to 10% (i.e. 15% - 5% floor price) of the amount finally payable to
the contractor.
b) For contracts of more than 2 years duration :
The total amount of reimbursement/recovery due to variation in price of the several
components shall be limited to 20% (25%-5% floor price) of amount finally payable to
the contractor.
D) Making adjustments for price variation :
i) The adjustments for price variation i.e. extra payment in case of increase and
recovery in case of decrease as required shall be made once every quarter in the onaccount
payments. If more than one on-account payment is made to the contractor in a
ii)
quarter, the adjustment, if required, shall be made in each bill.
It shall be contractor’s responsibility to submit the values of various price indices
for appropriate points of time along with proof/authenticity thereof, to enable the Railway
to calculate the price variation.
E) Method of operation of this clause :
i) Since the adjustments in payments are based on the amount of work done by
contractor in each quarter, measurements of the actual work done must be taken and
recorded in the measurement books and signed by the contractor at the end of each
quarter, if not frequently.
ii)
iii)
Since the various indices are published by RBI/Ministry of Labour of few months
later than the months to which they pertain, the normal on account bills based on
quarterly measurements will be prepared as per current procedure on the accepted rates
without considering the price variation clause. The adjustments for price variation shall
be done subsequently, through separate series of on account bills, called Escalation onaccount
bill Nos. 1,2 etc. The adjustments bills and the normal on account bills will be
kept independent of each other for facility of executions.
Since the adjustments due to price variation are done on the basis of payments
made for each type work as defined in Para-C(ii) above, it will be advisable to record
measurements and prepare Abstracts for each type of work separately in each normal on
accounts bills, so that the on accountBill/measurements do not have to be worked
upon again at the time of preparing escalation account bills
SIGNATURE OF TENDERER(S)/CONTRACTOR(S)