Manual for Development Projects - Planning Commission

Chapter 4
vi) Project Staff
vii) Interest during construction, etc.
(d) Unit cost has to be given separately in the appropriate column of the PC-I.
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(e) In case of revised cost, the reasons for increase in respect of each item as originally estimated have to be
furnished. Similarly increase due to revision in the scope of the project is to be given separately in
accordance with the additional sheet annexed with each sectoral PC-I.
(f) In case a project has been revised for the first time either due to increase in the total cost by more than
15% or due to revision in its scope, it would be treated as a new scheme for obtaining sanction of the
competent authority. Any further increase thereafter is not allowed and therefore it is essential that the
revised cost estimates are prepared with due care (Annexure-XI). A copy of the Planning and Development
Division's letter dated 12-12-1989 is also enclosed for guidance (Annexure-XII).
(g) In case the PC-I provides 15% or more escalation in loan agreement of Aided Projects, the provision of
15% escalation over the approved cost of the project as contained in Planning & development Division's
letter dated 15-4-1989 (Annexure-XIV) shall not therefore be admissible in such cases.
(h) When the need for revision of cost becomes evident due to higher bids received in response to a tender,
the revised scheme based on the accepted tender cost should be submitted to the competent authority for
fresh approval. As regards the question as to when a revised scheme, the cost of which has exceeded more
than 15% of the originally approved cost, should be prepared and submitted to the competent authority for
approval, it is to be noted that no difficulty should be experienced if PC-III (Quarterly Progress Report) is
duly prepared. If columns 6 and 7 of the said form indicate that the percentages of financial expenditure
have exceeded the percentages of physical work by more than 15% it is enough indication that the cost of
the project would go beyond the approved cost. As soon as the indication is visible, the executing agency
should start work on revising the scheme and submit for the approval of competent authority (Annexure-
XIII) without stopping the actual work. In the exceptional case where the revised PC-I can not be prepared
in time, recourse could be had to obtaining the anticipatory approval of the Chairman, ECNEC (Annexure-
XV). However, increase in the cost due to delinking of the Pakistani Rupee from the Dollar will not need
fresh approval of the CDWP/ECNEC. The sponsoring agency shall however intimate the revised cost due
to the depreciation of Pakistani currency to the Cabinet Division, Planning and Development Division and
Finance Division (Annexure-XVI).
(i) In the case of non-aided projects where the cost of the project remains within 15% of the original
cost/scope, the case for extension of the execution period beyond that shown in the approved PC-I need not
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9/23/2010