A

Research Report

ON

“Personnel Accounting in NHPC”

A Report Submitted To Suresh Gyan Vihar University

Submitted To: Submitted By:

Asif ali
Mrs:Maninder kholi B.com(Hon’s) 3rd Sem

SURESH GYAN VIHAR UNIVERSITY, JAIPUR

1
 DECLARATION

I hereby declare that the project report entitled “ Personnel

Accounting in NHPC ” submitted for the Degree Of
B.com(hon’s) , it is my original work and the project report
has not formed on the basis for the award of any degree,
diploma, associate ship, fellowship or similar other titles. It
has not been submitted to any other University or Institution
for the award of any degree or diploma.

Asif Ali
B.com(HON’S) 3rd Semester”
Suresh GyanViharUniversity, Jaipur

2
 ACKNOWLEDGEMENT

I express my sincere thanks to my project guide ,

Mrs.Maninder Kholi ISBM in Suresh Gyan Vihar University
for guiding me right from the inception till the successful
completion of the project and guidance during the
preparation of this project report. I am grateful to my
faculties and I wish to record my sincere thanks to my
parents for their help and cooperation throughout my project.

Asif ali
B.com(Hon’s) 3rd Semester”
Suresh GyanViharUniversity, Jaipur

3
 EXECUTIVE SUMMARY

Research report work is something that every Management

student should carry out seriously irrespective of their topic
they choose to do. This is a part of complete management of
Suresh Gyan Vihar University necessary for the b.com(hon’s)
Course.

Study and carrying out such a research work is required by

the examination and evaluation Department.

Carrying and completing such a ‘work is not an easy task.

One must be careful before gathering the data required
otherwise the very essence of the research will get lost in the
midway and the real and correct idea will remain unexposed
before

4
 INTRODUCTION TO NHPC LTD.

COMPANY: CHUTAK POWER STATION

NHPC Limited, previously known as National Hydroelectric Power

Corporation Ltd.was established in 1975.NHPC is a MINIRATNA
Category-1Enterprise of the Government of india.With an authorized
share capital of Rs.15,000 crore and an investment base of about
Rs.29,800 crore, NHPC is ranked as a premier organization in the
country for development of hydro power.

Accredited with ISO 18001:2000, ISO-9001:2000 & ISO 14001:2004

certificates, NHPC is a multidisciplinary organization and has acquired
sufficient expertise and state of the art technology for investigation
,planning,designing and executing both large and small size hydro
power projects. It has the strength of highly qualified and experienced
professionals in designand engineering ,geotechnical
engineering,construction planning and construction management for
building hydroelectric projects.The technical and engineering
proficiency and experience of NHPC places it in a leading position in the
field of hydro power development in india and neighbouring countries.

5
THE SAGA OF NHPC IS replete is with challenges .To begin with NHPC
took three most deficult and almost abandoned projects in geologically
weak Himalayan Ranges from the erstwhile Central Hydroelectric
Projects Control Board. These projects were the 180 MW Baira Siul in
Himachal Pradesh, 105 MW Loktak in Manipur and the 345 MW Salal
Stage-1 in Jammu & Kashmir. The initial mandate given to the
Corporation to complete these three projects were fulfilled with the
commissioning of Baira Siul in 1981, Loktak in 1983 and Salal Stage-1 in
1987 . The successful completion of these projects in most difficult
areas and their operation is a testimony to NHPC’s success.

So far ,NHPC has completed 13projects with a total installed capacity

of 5175 mw which include 1000 mw indira sager project and 520mw
Okareshwar project through Narmada hydroelectric development
corporation ltd.[NHPC]-a jointy venyure of NHPC with goverment of
madeya pradesh. Besides this,NHPC has commissionedthe14.1 mw
devigat project in nepal,60 mw kurichiu project in bhutan,5.25mw
kalpong projectin Andaman and Nicobar Isaland ,4 mw sippi and 6 mw
kambang project in arunachal pradish as deposit work .At present 11
projects with a total installed capacity of 4622 mw are under execution.

6
CHUTUK POWER STATION[4X11MW]
ABOUT THE POWER STATION:
Chutuk power station [4X11MW] is located kargil distric in ladhak
region.the project is runoff river suru .It has cold desert scheme to
harness the hydro potential of river suru.It has cold desert type
climate and summer tempreture as high as 42 degree C and witet
tempretures qw low as [-] 30degree C
River suru raised at an altitude of about EL 4500M at a
place called tutso,pensila.The river has a fall of about 1920 m from its
origin to influence with the river indus.It has a stretch of about 3628
sqkm up to its confluence with Wakha.The river has an average bed
slope of 1 in 74.It has a glacial area about 244 sqkm which is 7% of
catchment area.

SALIENT FEATURES
LOCATION
State :J ammu-Kashmir

Distric : Kargil

River : Suru (Tributary of indus)

Barrage : Near village Sarzhe

7
Nearest Rail head : Jammu

Nearest Airport : Leh

BARRAGE
Barrage Top level : EL 2783.0 m

Full Reservoir level : EL 2781.0 m

Height above crest

Level : 15 m

Length : 47.5 m

Design Flood : 1400 cumec

Number of gates :5

Radial gate size : 6.00m(W) x 6.5 m(H)

INTAKE
No. and size of gates : 2 Nos., 3.75m x 4.5m

Intake Tunnel : 2 Nos., 4.5m Dia

Length Including cut & cover : 160 m/150 m

HEAD RACE TUNNEL (HRT)

Dia : 5.9 m (Horse shoe)
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Length : 4777m.

SURGE SHAFT
Dia : 19.0 m

Height : 59.0 m

PRESSURE SHAFT
Nos . :2

Dia : 4.0 m

Height : 37.0 m

PENSTOCK
Number : four

Diameter : 2.3 m

Length : 21 m each

POWER HOUSE (Underground)

Size : 83 m(L) x 15.5m(W) x 34.5m (H)

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No. of Units , type : 4 nos. (Francis verticle)

installed capacity : 44 MW (4 x 11 MW)

Unite Discharge : 24.05 cumec

Gross Head : 63.4 m

Transformer Caverin size : 69.0 m (L) x 12.0 m (W) x10.0m(H)

SWITCHYARD
Type : Outdoor

Size : 45 m x 114 m

Output at Minimum net : 12470 KW

head & rated speed (Maximum output)

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 PERSONNEL ACCONTING

Title Name : Pay fixation of employees (process no:1)

A PROCESS BRIEF:
1) This process lay down the procedure to be followed for fixation of

pay of employees.

2)The pay fixation process of execatives and supervisors to central

cadre is centralised at pay foxation cell,corporate office (refer office
order no.57/98 dated26.08.1998). the pay fixation proposals by all the
units in the prescribed

format as specific the personnel manual (different formars are

pescribed for different cases) and changes thereto notefied in the
circulars issued from time to time are sent to corporate office for
fixation of pay. These proposal are duly signed by the head of finance

11
of he unite certifying that the information contained therein has
been verfied.(refer circular no.55 dated.14.06.99).

3)thepay fixation process for form project cadre employees is

decentralizatuion and carried out at the respective units /for projects
the proposal are not sent to the pay fixation cell ,corporate office
.however ,the pay fixation rules and the procedures for pay fixation
remains the same

4)the pay is fixed based on the NHPC pay fixation rules prescribed in
the personal manual and changes thereto notified in the circulars
issued from time to time ,

5) pay fixation is required under the following circumstances:

*New fixation is required including department candidates

 Promation

 Wage Revision

 Stepping Up/advancement of increment

 conversion from CDA pattern of pay scale to IDA pattern

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Main check /review of the pay fixation proposal

6) The main check / reviews that should be carried out by pay fixation
proposal include the following :

 Pay fixation proposal received from the NHPC proposal manual as

well as the circulars/ ammendment issued from time to time

 Pay fixation proposals are duly signed by the Head of finance of

with a certificate that the information furnished in the proposal has
been verified (refer circular no.55 dated 14.06.1999 Annexure B)
for verfication and confirmation

 the pay fixation proposals are prepared in the prescribed form

13
MAINTENANCE AND UPDATION OF EMPLOYEE SALARY
RELATED DETAILS

1) This process lays down the procedure to be followed for

maintenance of employee salary details .These records are created
on appointment/ deputation of the employee and are updated on
promotions, deputation, probation clearance, transferes,
resignation , wage revision retirement or change in the
entitlements/status of the employee due to any other reason.

2) The P&A department maintains the employee details in a sparate

computerised module called employee information system . This
computerised employee information system is integrated with the
computerised payroll system with respect to certain fields of the
employee salary related details such as name of the employee ,no
employee.designation , grade , date of birth etc .in case of
appointment ,promotions wage revision ,probation clearance,
transfer, deputation , resignation , retirement , etc of the employee
P&A:

14
* Issue office order stating the change in status of the employee ,
designation , grade date of effecting such change etc

* Create /updates the employee records in computerised employee ,

information system and speciefied field in the employee records of the
payroll system such as name of the employee, employee no.,
designation , grade , date of birth , etc . get updated correspondingly.

3) Payroll section maintains the fields pertaining to salary and other

payments and recoveries from employee based on their entitlements
loans and advances , etc . On receipt of above mentioned orders
payroll section updates these field .

15
SYSTEM UNDER FOX PRO
*Attendance records are not computerised

*Manual attendence register (reffer formate no PR-03) is mantained to

record the receipt of the attendence report / absentee statement to
ensure that attendance / absence records for all the department have
been received .

*the payroll system under fox pro computes the allowance mentioned
below for the entire month and the amount of allowance fir the period
of absence is computed manually and entered into the system for
reducing it form the reducing it form the total allowance for the
month . Sparate recovery statements are manually prepared for each
type of allowance

-
LTR (Refer format no . PS -02 )

- CA (Refer format no .PS -02)

16
SCA (Refer formate no .PS-03)

-Other allowances as per the circulars issued from to time .

*leave data on HPCL and EOCL is directly updated unti the

computerised payroll acconting system for the purpose of
computation of salary on the form specified for the purpose . the
payroll system computes the salary for the entire month .For the period
of absence the payroll system computes the salary on the basis of the
leave data update into the computer and the same is shown as
deduction from employees on the pay slip of the employee

*In the case of unauthorised absence ,the payroll system compute the
salary for the month however the salary is not released to the
employee and the new payable amount is accounted for unfer the
head of unpaide salaries. The salary is released only the unauthorused
absence of the employee is regularised.

17
INTERNAL CONTROL/CHECK
While discharging this function the payroll section should ensure the
following :

*Attendence /absentee data has been received for employees of all the
departments.leave data has been received for employee of all
departments

*Attendence and leave records are processed and update into the
computerised payroll system to processing of the payroll

DEPARTMENTS INVOLVED:
*Time keeping Office

*P&A Department

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*F&A Department

PREPRATION AND DISBURSEMENT OF PAYROLL

Processing and disbursement of pay:

1) payroll is processed on a monthly basis .The monthly processed of

the payroll is called the regular processing .Supplementary is done to
release the withheld salary of the employee.The procedure for
suplementary processing remain the same as that of regular
processing .

2)The oricle based computerised payroll system is integrate with the

following other computerised system :

*Attendance records

*Leave acconting system

*Miscellanious bills acconting system

*Advances acconting system

*Lease accommodation acconting system

* Tax acconting system

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*PF acconting system

*Direct payment system

3)The computerised payroll system is updated with data from all these
systems and all other employee salary related details prior to
processing of payroll ,which is by the 25th respective month .The order
/information relating to the payroll master obtained subsequently is
updated in the payroll of the next month.

Payment of Allowance and other entitlements

4)the employees are entitled to various type of allowances and other
payments such as DA ,HRA ,Night shift Allowance ,overtime ,CL
encashment, honorarium, Hindi allowance etc .Such allowances and
payments along with their rules regarding antutlement /eligibility
conditions,amount /rate in respect of each type of allowance and
payment has been sepcified in the personnel policy manual and
change thereto

5)A few of these allowances are payable to the employees by virtue of

their employment designition grede e.g DA,SCA ,CCA,etc .The
employees does not apply for these .Other allowances are paid to the
employee on submission of application /declaration along with the
relevent supporting documents to the controlling officer as prescribed
in the rules laid down in the personnel manual and changes thereto
notification in the circulars issued from time to time in this respect

20
e,g .conveyance allowance ,children education allowance ,hostel
subsidy etc .

7) All the allowances and payments can be broadly classified into fixed
payments and calculated payments .

*Fixed payments include those allowances and payments under which

a fixed amount is paid every month e.g. Personal Pay on account of
family Welfare ,children education allowance special hostel subsidy
,etc .

*Calculated payments include those allowances and payments under

which the amount payable to each employee is calculated every month
(e.g DA,HRA , city compensatory allowance etc.

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System of award of contracts
The contract management is a process of systematically
and efficiently managing
award, execution and analysis of contract for the
purpose of maximizing financial and
operational performance and minimizing risk.
Audit examined in detail various stages of contract
management, inter-alia, cost
estimate, preparation of tender documents, invitation
of bids, receipt and opening of
bids, processing and evaluation of bids, pre-award
discussion with the recommended
bidder, award of contract, post-award implementation
of contract and contract
amendments. Audit noticed deficiencies in 1350 of the
24 contracts51 reviewed in Audit.
Company-wise results of examination are discussed in
subsequent paragraphs.
5.1 Inadequacies in cost estimation

22
Cost estimates are prepared to establish
reasonableness of the cost at which
package could be executed. Therefore, it is essential
that the estimates are worked out
in a realistic and objective manner. Company-wise
analysis of the estimation process
disclosed the following inadequacies in some of the
elements:
Company Inadequacies in the Estimation process
Ministry/Management’s reply
SJVNL Cost estimates of Rampur project
omitted hard coating of the main
equipment involving an expenditure of
`66.60 crore i.e. 12.4 per cent of the
estimated cost; and underestimated
the mandatory spares of `48.98 crore
i.e. 9.1 per cent. Thus, the estimates
were not realistic.

23
Ministry/SJVNL Management stated (March
2012) that these special provisions and
additional quantity of spares were finalised in
consultation with consultant (i.e. CEA) and the
same could not be included in the revised
estimates because of very limited database
available.

50NHPC-10, SJVNL-2, THDC- 1 and NEEPCO-0

51 NHPC-16, SJVNL-3, THDC-3 and NEEPCO-2
System of award of contracts
CHAPTER - 5
Report No. 10 of 2012-13
36 Capacity Expansion in Hydro Power Sector by CPSEs
Company Inadequacies in the Estimation process
Ministry/Management’s reply
NHPC Estimates did not reflect current

24
market prices as the works were
awarded with significant variations
ranging between (-) 26.22 per cent
(`204.36 crore) to (+) 37.21 per cent
(`53.71 crore) of the estimated cost in
respect of 10 out of 16 contracts
(involving seven projects). Logistic
constraints and climatic conditions
were not considered in case of NimmoBazgo
and Chutak projects which
reflected maximum variation.
The cost estimate prepared by NHPC were
based on the general guidelines of CEA/CWC
and variation in quoted prices vis-à-vis
estimates occurred in almost all work packages
of hydro projects at domestic and global levels.
In respect of Chutak and Nimmo-Bazgo
25
projects, the Ministry admitted lack of
experience both on the part of NHPC as well as
contractors in respect of actual execution
intricacies and complexities at such a high
altitude as the reason for variations between
estimated cost and awarded cost.
In case of Jiwa Nallah and associated
works related to Parbati-II project the
actual rock excavation was 5,35,000
cum (i.e. 1,326 per cent above the
estimated Bill of Quantities of 37,500
cum). Under-estimation of work,
difference in the road width and
change in alignment of road led to
additional financial implication of
`30.97 crore.
Ministry accepted (March 2012) the Audit
26
observation.
THDC Negative variation of 39.56 per cent
(`35.92 crore) was observed in the
estimated and awarded cost in one of
the three contracts.
THDC Management and Ministry did not offer
any comment on this issue.
The Ministry by and large acknowledged the audit
observations. Thus, the
estimation process failed to provide a realistic
benchmark for the award of works.
5.2 Pre-qualification criteria for selection of contractors
Prequalification (PQ) criteria is required to be fixed in
such a manner that it is
able to weed out and exclude inexperienced,
incompetent, un-resourceful and
financially unsound applicants and at the same time
promote wider participation. The

27
PQ criteria should be objective and unambiguous. The
applicants who qualify the PQ
criteria would participate in further bidding process.
A review of the formulation of PQ criteria for award of
contracts of various
projects in NHPC revealed that:
Report No. 10 of 2012-13
Capacity Expansion in Hydro Power Sector by CPSEs 37
(a) Till July 2004, there were no guidelines for fixation of
PQ criteria in NHPC but a
practice of fixation of PQ criteria by a multidisciplinary
Committee was being
followed. Audit appreciates that out of total 16
contracts (13 contracts prior to
July 2004 and three contracts after issuance of
guidelines), this practice was
followed in 13 contracts. However, in three contracts
pertaining to Parbati-II

28
project, PQ criteria was approved (November 2000) by
the Chairman and
Managing Director.
Ministry/NHPC Management stated (October 2011 and
March 2012) that at the
time of floating NIT (November 2000) there were no
guidelines for formulation
of PQ criteria of major civil works as well as
requirement of constitution of a
Committee for formulation of PQ criteria. The guidelines
for constitution of
Committee for formulation of PQ criteria came into
effect from July 2004.
(b) For transparency and fairness in the contract
management, once the PQ criteria
are fixed and tender documents have been issued, PQ
criteria should not be
relaxed. Audit, observed that out of 16 contracts, in five
contracts pertaining to

29
Subansiri lower and Parbati-II projects (as detailed in
Annexure-III and AnnexureIV)
PQ criteria was relaxed after closing date of sale of
tender documents. In
Parbati-II Project, considering the criticality of
excavation of 9 km stretch52 of
head race tunnel (HRT), initial PQ criteria envisaged
that ‘a JV partner should be
specialized in use of TBM technology’. However, after
the close of sale of tender
documents (15 December 2000), requirement of
experience of TBM technology
by a JV partner was relaxed53 (February 2001) to
‘relevant experience of TBM by
a sub-contractors’ on the plea that foreign agencies
specialized in TBM were
unwilling to participate in the bidding as JV partners.
NHPC Management stated (October 2011) that as per
normal practice, NHPC

30
invariably considers the representation of prospective
bidders to review the PQ
criteria. Accordingly, based on representation of a
number of bidders, the
financial criteria was reviewed by the Committee and
modified. While accepting
audit observation, Ministry added (March 2012) that
since 2004, all PQ/Bid
documents and amendments thereto are posted on
website of NHPC and
presently no amendment to PQ/Bid is being issued after
the closure of sale date.

52 Out of total length of HRT of 31.20 km only 9 KM

was planned through TBM and the balance was
through drill and blast method (DBM).
53 By the Contract Division based on the
recommendations of a committee of the company and
with

31
the approval of C&MD of NHPC
Report No. 10 of 2012-13
38 Capacity Expansion in Hydro Power Sector by CPSEs
However, argument of the Management that foreign
agencies specialized in TBM
were unwilling to participate in the bidding as JV
partners was misplaced as six54
out of ten bidders pre-qualified by NHPC for HRT
package, were those in which
either the sole applicant or one of the partners had the
required experience of
using TBM.
(c) For JV bidders in NHPC55, PQ envisaged that the
Lead Partner should meet
average annual turnover of not less than 50 per cent of
specified criteria and
other partner(s) should individually meet not less than
20-30 per cent of

32
specified criteria. However, PQ criteria of Parbati-II
project of NHPC did not
specify limit for lead partner as well as other partners.
MAYTAS Infra Limited the
lead partner of M/S Himachal JV met only 39 per cent of
the turnover
requirement and one of the other JV partners- Sri
Shankarnarayan met only 19
per cent of the average turnover criteria.
NHPC Management stated (October 2011) that PQ
criteria were made with a
view to have wider participation for various works
packages and not with a
consideration to favour any individual party. The
Ministry added (March 2012)
that this criteria was similar to the revised PQ criteria of
Teesta-V project.
Reply is not convincing as PQ criteria is meant to ensure
weeding out of

33
financially and technically weak parties and should be
followed in letter and
spirit. Relaxing the criteria in one of the earlier
contracts cannot justify deviation
for the contract.
(d) In respect of HRT and associated works of Parbati II
Project of NHPC, M/s HJV led
by MAYTAS (with Sri Shankaranarayana Construction
Company and Nagarjuna
Construction Limited) did not meet the specific
construction experience as per
PQ criteria, however, they were considered eligible as
could be seen from the
following:
i. PQ criteria required “completion of tunnel with Tunnel
Boring Machine
(TBM) of more than 8.0 km length with an excavated
volume of 11,000 cum

34
or 300 meter length per month from one tunneling
face”. M/s HJV supported

54 (1) M/s Dywidag International GMBH, (2) M/s HCC-

AMB JV, (3) M/s Skanska-L&T JV, (4) M/s
Parbati Tunnel JV, (5) M/s Daelim Industrial Co. Limited
(6) M/s Samsung Corporation
55 In 10 of 13 contracts this practice was followed by
NHPC, in case of two contracts, JV was not
allowed.
Report No. 10 of 2012-13
Capacity Expansion in Hydro Power Sector by CPSEs 39
their bid with a work experience of 10.80 km with TBM
by their proposed
sub-contractor in Sweden involving Head Race Tunnel
(HRT) of 7.5 km and
Tail Race Tunnel (TRT) of 3.3 km and the same was
accepted by the
Management.
35
NHPC Management/Ministry stated (October 2011 and
March 2012) that PQ
criteria were set out primarily with the objective that
the bidder should have
experience of completion of tunnel of a particular
length as also should have
achieved the desired progress rate. As such the
Committee considered the
experience and felt that the applicant met the criteria
of average progress.
Reply is to be viewed in the context that the bidder was
required to have
experience of more than 8 km length of a tunnel from
one tunneling face.
Further, the sub-contractor proposed by one of the
bidders (M/s Patel-SEW
JV) who was L2 bidder had work experience of more
than 21 kms with TBM.
ii. As per PQ criteria, each item of technical criteria of
the respective lot was to
36
be individually met by a partner of the joint venture and
the experience and
performance of various JV partners was not to be
summed up. PQ criteria
inter-alia prescribed completion of tunnel of more than
5 km (revised to 2
Km in February 2001) with DBM56. MAYTAS, the lead
partner of M/s HJV
claimed the experience of Larji Project executed by a
joint venture of
MAYTAS together with Sri Shankaranarayana
Construction Company.
NHPC Management stated (October 2011) that in the
absence of bifurcation
of work executed by the JV partners, work experience
was available to both
the partners of JV. Ministry added (March 2012) that
the PQ evaluation
Committee had taken a view in its best judgment based
on the documents
37
submitted by the bidder.
Replies confirm that the bidder was not fulfilling the PQ
criteria and the
Committee pre-qualified an ineligible firm who neither
fulfilled the technical
experience for boring tunnel of more than 8.0 km length
from one tunneling
face nor fulfilled individual criteria of DBM technology.

56 Drill and Blast Method

Report No. 10 of 2012-13
40 Capacity Expansion in Hydro Power Sector by CPSEs
5.3 Evaluation of bids
Techno-commercial bids are invited from the bidders
who qualify the prequalification
criteria. These are evaluated by the duly constituted
Committee comprising

38
representatives from contracts department, project site
and finance. Based on such
evaluation, price bids are called from the techno-
commercially acceptable bidders. In
SJVNL and THDC, techno-commercial and price bids are,
however, invited after PQ
evaluation itself. The reasonability of the rates quoted
by the lowest bidders is assessed
with estimated rates as well as sensitivity analysed
rates by the Committee before
recommendation on award of work. Examination of bid
process in NHPC revealed the
following:
5.3.1 Reconsideration of an ineligible bidder
For civil works of Subansiri Lower project of NHPC, the
PQ bid of Nurol
Construction & Trading Inc., Turkey was rejected by the
PQ evaluation Committee as it

39
did not meet the financial criteria of ‘Turnover’ (USD
83.93 million against the
requirement of USD 110 million). Despite this, the
techno-commercial bid documents
were issued to this firm and price bids were also invited
after finding the firm technocommercially
acceptable.
Ministry/NHPC Management stated (October 2011 and
March 2012) that the
firm approached NHPC for reconsideration of their
application for pre-qualification. In
order to have better competition and international
participation, Committee in its
supplementary report recommended the firm to be pre-
qualified and allowed
participation in the SSL2 work package.
Reply of the Management is not acceptable as
reconsideration of application of

40
any bidder after evaluation of PQ criteria vitiates the
bidding process and denial of
equity to other prospective bidders.
5.3.2 Lack of transparency in bid opening
In case of Chamera-III project (civil works) of NHPC,
discount of 32.40 per cent
offered by the lowest evaluated bidder i.e. Hindustan
Construction Company Limited
(HCC) was not a part of the bid documents submitted by
HCC as the same was neither
mentioned in the forwarding letter nor specified by the
bid opening committee (August
2005). The discount letter furnished suo-moto by the
bidder and award of work to HCC
is not in order.
Report No. 10 of 2012-13
Capacity Expansion in Hydro Power Sector by CPSEs 41
NHPC Management stated (October 2011) that the
bidder offered rebate in a
41
separate envelope sealed in the outer envelope in line
with the bid conditions. Bids for
Chamera-III civil works package were opened by bid
opening committee in the presence
of all the bidders/representative of bidders who chose
to remain present. As such,
chances for tampering/manipulation cannot be
considered. Ministry added (March
2012) that bid documents did not provide for
mandatory reference of rebate in the Bid
Form. However, as a matter of policy, bidders were
permitted to offer discount, if any,
only in Bid Form after 18 May 2009.
Reply of the Management is not tenable as bid opening
committee did not list
any discount letter submitted by HCC at the time of
opening of bids. The same was also
not mentioned in the forwarding letter of the bid.
5.3.3 Opening bid despite poor track record

42
For civil work package of Chutak project of NHPC,
techno-commercial bid of
MAYTAS was set aside (April 2006) as performance of
M/s HJV (led by MAYTAS) in
Parbati-II project was not good. The tender was
annulled as the lowest price bid received
was 58 per cent higher than the approved cost
estimate. During re-tender, the bid of
MAYTAS was opened (September 2006) setting aside
the earlier rejection of MAYTAS
due to poor performance in Parbati-II project.
Management by first not considering the
offer for its poor performance and subsequently
considering it on submission of a
project specific financial commitment from a bank
displayed lack of consistency.
Ministry/NHPC Management stated (October 2011 and
March 2012) that
MAYTAS had submitted a project specific assured
financial commitment for the entire
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construction period of `25 crore for working capital
from a Bank based on which Tender
Evaluation Committee qualified the firm.
Reply of the Management is not tenable as their
performance was poor in
Parbati-II project and as such, it should have been
debarred from participating in retendering
in Chutak project.
5.4 Award of contracts
5.4.1 Delays in award of contracts
NHPC prescribed (June 2004) that tendering activities
from the date of
publication of NIT to the date of issue of letter of award
be completed within 9.5
months. Against this, Management took 14 to 28
months (Annexure-V) in case of
Report No. 10 of 2012-13
42 Capacity Expansion in Hydro Power Sector by CPSEs

44
tendering activities in 15 out of 16 selected contracts
and completed the tendering
activities in four months in remaining one contract.
SJVNL took 21 to 28 months in three
contracts selected for examination in audit while THDC
took 39 to 80 months in three
contracts examined in audit. Consequently, this resulted
in delay in execution of
projects.
Ministry/NHPC Management stated (October 2011 and
March 2012) that the last
date of submission of PQ applications, techno-
commercial bid and price bids were
extended on the request of the prospective
applicants/bidders considering the status of
various clearances from time to time. Bids were
finalized more or less simultaneously
with the accord of CCEA sanction and in most of the
cases letters of acceptance were

45
issued soon after approval by CCEA.
Reply of the Ministry/Management that works could
not be awarded pending
various clearances is not tenable as civil works of
Subansiri Lower and Teesta-IV were
awarded after three and four months from the dates of
investment approval by CCEA.
Further, the delays in award of contracts could have
been minimised by coordinated
efforts with all concerned authorities.
5.4.2 Avoidable expenditure due to award of work
before land acquisition
Civil work contracts of Subansiri Lower project were
awarded (December 2003)
by NHPC with instructions for work to be started
immediately. However, the land was
handed over to NHPC in January 2005 after forest
clearance. The contractors of civil

46
works raised claims of `135.68 crore on account of idling
of men and machinery at the
project site. Against this, NHPC has made an interim
payment of `24.85 crore to the
contractor so far (March 2012).
NHPC Management stated (October 2011) that delay in
formal forest clearance
due to litigation, etc. led to delay in handing over of
site. The contractor was allowed to
undertake the works after survey and demarcation of
area by erecting concreting pillars
in January 2005. Ministry added (March 2012) that as a
matter of policy, after 2007,
award of works is being done only after actual
availability of required land for execution
of works.

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