Thsis Soft

NICMAR
COMAPRATIVE STYDY EVALUATION OF

PROBLEM IN INTERNATIONAL
CONSTRUCTION CONTRACT CONDITIONS
By-
Ranjan Kumar-P81086
Utpal Ingle-P81115
Vikrant Desmukh-P81121
PGP PEM 8
th
Batch
(2012 - 2014
G!"#$# B%-
P&'() D$*'+a, R'%
A Mini Thesis submitted in Academic Requirement for
the Post Graduate Programme in Project Engineering
and Management
(PGP PEM)
C!"PR"#IV$ %#&D& ' I(DI"( "(D I(#$R("#I(") C(#R"C#% (IC!"R
INTRODUCTION
C*nstru+ti*n In,ustr- pla-s a ke- r*le in the pr*+ess *. e+*n*mi+ trans.*rmati*n an,
gr*/th 0"s a matter *. .a+t1 +*nstru+ti*n a+ti2it- n*t *nl- initiates1 3ut gi2es m*mentum
t* *ther ke- se+t*ral a+ti2ities su+h as agri+ulture1 p*/er transp*rtati*n1 in,ustr-1 health1
e,u+ati*n an, the like1 thus a+ting as a trigger me+hanism an, thr*ugh multiplier e..e+t it
+umulati2el- lea,s t* a+hie2ement *. higher 4ualit- *. li.e0 It per.*rms an imp*rtant
.un+ti*n as an integrating me+hanism .*r a large e+*n*mi+ a+ti2it- in /hi+h +urrentl-
ne/ strategi+ initiati2es ha2e 3een planne, .*r a spee,- an, str*ng s*+ial an, in,ustrial
in.rastru+ture 3ase0
In this /*rl, *. gl*3ali5ati*n an, in+rease in li3erali5ati*n that has 3een a rapi,
rami.i+ati*n in the pr*je+t +*nstru+ti*n in,ustr-0 Due t* theis gl*3ali5ati*n *rgani5ati*ns
are m*2ing t*ear,s /a2ie 2arie, +hallenges ar*un, the gl*3e 0thi*s has in+rease,
,i2ersit- an, managing *. 2ari*us ar*un, the pr*je+t an, 2ari*us sta+kh*l,ers +*nne+te,
the pr*je+t0 #hese stake h*l,ers pla- an imp*rtant r*le ,uring the ten,ering 3i,,ing
+*ntra+ting ans e6e+uti*n stage0i n this pr*+ess the *rgani5ati*n +apa3ilities an, si5e
pla-s an imp*rtant r*le .*r su++ess.ul +*mpleti*n *. the pr*je+ts0
%in+e the *rgani5ati*n in t*,a-s /*rl,
e6e+uti*n #his has assume, heightene, signi.i+an+e espe+iall- in the present +*nte6t *.
li3erali5ati*n an, gl*3ali5ati*n0 7ith m*,ern an, s*phisti+ate, te+hn*l*g-1 +*uple, /ith
tra,iti*nal ar+hite+tural st-les1 In,ian +*mpanies engage, in *2erseas +*nstru+ti*n
pr*je+ts ha2e a+4uire, a,e4uate e6pertise an, +apa3ilities in the engineering an,
+*nstru+ti*n *. 2ari*us pr*je+ts an, stru+tures like high rise 3uil,ings1 resi,ential
+*mple6es1 high/a-s1 r*a,s1 3ri,ges1 airp*rts1 har3*rs1 earthen an, r*+k .ill ,ams1
tunnels1 multipurp*se irrigati*n pr*je+ts1 /ater suppl-1 rail/a-s an, *ther t-pes *.
in.rastru+ture .a+ilities0
"++*r,ing t* 8Pr*je+t $6p*rt Pr*m*ti*n C*un+il *. In,ia8 e6p*rt *. engineering g**,s *n
,e.erre, pa-ment terms an, e6e+uti*n *. turnke- pr*je+ts an, +i2il +*nstru+ti*n +*ntra+ts
a3r*a, are +*lle+ti2el- re.erre, t* as 8Pr*je+t $6p*rts80 #he nature *. Pr*je+t $6p*rts
3eing un,ertaken1 in sense1 re.le+ts the te+hn*l*gi+al maturit- an, in,ustrial +apa3ilities
*. a +*untr-0 e6p*rts *. pr*je+ts an, ser2i+es +an 3e 3r*a,l- +ateg*ri5e, int* 9i: +i2il
+*nstru+ti*n Pr*je+ts1 9ii: turnke- pr*je+ts1 9iii: +*nsultan+- ser2i+es1 an, 9i2:supplies1
primaril- 3- /a- *. +apital g**,s an, in,ustrial manu.a+tures0
2
In,ian Pr*je+t $6p*rters ha2e e6e+ute, a 2ariet- *. pr*je+ts in ,i2erse markets *2erseas0
%atis.a+t*r- per.*rman+e1 in terms *. +*st e..e+ti2eness1 appli+ati*n *. te+hni+al e6pertise
an, timel- ,eli2er- *. 4ualit- pr*,u+ts an, ser2i+es has earne, pr*je+t e6p*rters .r*m
In,ia a .air ,egree *. g**,/ill an, stan,ing0
Pr*je+t $6p*rts .r*m In,ia +*mmen+e, /ith a m*,est 3eginning in the late 1;<0s0 %in+e
then1 pr*je+t e6p*rts ha2e e2*l2e, *2er the -ears1 /ith In,ian +*mpanies ,em*nstrating
+apa3ilities an, e6pertise spanning a /i,e range *. se+t*rs0 #he nature *. Pr*je+t $6p*rts
3eing un,ertaken re.le+ts the te+hn*l*gi+al maturit- an, in,ustrial +apa3ilities in the
+*untr-0
3
1)- OB.ECTIVE OF STUDY
#he *2erall *3je+ti2e *. the stu,- is t* e6amine the ,i..erent +lauses *. +*ntra+t an, its
e..e+t *n the internati*nal +*nstru+ti*n pr*je+ts an, suggest meth*, *. impr*2ing the
+*ntra+ting +lauses0
In parti+ular the stu,- anal-ses .*r +*ntra+ts in +*nte6t *.=
I0 #ime *2errun +lauses
II0 'a+t*rs a..e+ting the es+alati*n +lause in a +*ntra+t
Ill0 Un pri,e+te, situati*ns +lauses
IV0 $..e+t *. e6+hange rate
V0 )i4ui,it- ,amages
VI0 C*mpensati*n ,ue t* unilateral terminati*n
OUTLINE OF PROPOSED /OR0
/1AT /E 1AVE DONE2 IN T1IS CASE STUDY
MET1ODOLOGY
#he stu,- is primaril- 3ase, *n se+*n,ar- ,ata0 #he se+*n,ar- ,ata has 3een +*lle+te,
.r*m 2ari*us s*ur+es like internet1 3**ks *n Internati*nal +*ntra+ting an, 'IDIC
gui,elines0
LITRATURE REVIE/
4
T1E COMPANY
#he Punja3 Chemi-Plants )t,1 PCP1 is a Chan,igarh 3ase, C*mpan-0 It /as
in+*rp*rate, in 1;6; as a pu3li+ limite, +*mpan- in the j*int se+t*r /ith the Punja3
%tate In,ustrial De2el*pment C*rp*rati*n - P%IDC0 #he pai, up +apital *. PCP is Rs
<05 milli*n0 In a,,iti*n1 Rs 2 milli*n /ere +*ntri3ute, 3- P%IDC0 in the .*rm *.201000
re,eema3le +umulati2e pre.eren+e shares *.Rs0 100 ea+h0 It is a tightl- hel, .amil-
+*ntr*lle, C*mpan-0
PCP /as set up primaril- .*r un,ertaking +*ntra+ts .*r ere+ti*n *. p*/er plants an,
+hemi+al manu.a+turing units0 It 3e+ame a market lea,er in the area *. its spe+ialisati*n
an, e6e+ute, <0 pr*je+ts until 1;8>0 #he annual turn*2er als* r*se .r*m Rs0 10; milli*n
initiall- t* *2er Rs0 500 milli*n in 1;8> an, t* Rs0 -?;> milli*ns in 1;;>0 It entere, the
pr*je+t e6p*rt 3usiness in mi, se2enties as a su3-+*ntra+t*r t* an*ther In,ian C*mpan-
- $ngineering Pr*je+ts In,ia )t,0 /h* /ere the prime +*ntra+t*rs *. a pr*je+t in Ku/ait0
)ater1 +i2il +*nstru+ti*n 3e+ame its main line 3usiness an, it has 3een *perating m*stl-
in the @ul. markets0 It als* takes up +*ntra+ts in the .iel, *. me+hani+al +*nstru+ti*n1
maintenan+e an, *perati*ns an, turnke- j*3s0 #he C*mpan- enj*-s a g**, market
reputati*n .*r its te+hni+al +*mpeten+- in pr*je+t e6e+uti*n0
#he C*mpan- /as .*un,e, 3- a te+hni+al entrepreneur1 !r0 A0%0 !ejie /h* +*ntinues
t* 3e its Chairman an, !anaging Dire+t*r0 #he .*un,er is a Chartere,
0 $ngineer /h* earne, t/* !0#e+h ,egrees1 *ne .r*m an In,ian an, an*ther .r*m an
"meri+an Uni2ersit-0 Pri*r t* entering the +*ntra+ting 3usiness1 he /as an a+a,emi+ian
empl*-e, at the Uni2ersit- *.R**rkee an, later /ith the @uru (anak $ngineering
C*llege1 )u,hiana0 Ae /as a mem3er *. the B*ar, *. @*2ern*rs *. the In,ian Institute
*. #e+hn*l*g-1 Delhi1 an, is a .*un,er mem3er *. (IC!"R0
T1E CONSORTIUM
T1R PRO.ECT
C1APTER 1
INTRODUCTION
5
#he Punja3 Cherni Plants )t,0 9PCP: in +*ns*rtium /ith the Ain,ustan %teel 7*rks
C*nstru+ti*n )t,0 9A%C): /ere a/ar,e, a +*ntra+t .*r the +*nstru+ti*n *. 226; ,/elling
h*uses1 2< an+illar- 3uil,ings C ne+essar- in.ra-stru+ture at > sites ar*un, the +it- *.
Basrah0 #he +lients /ere the %tate rgani5ati*n *. Ira4i P*rts 9%IP: Basrah1 !inistr- *.
#ransp*rt C C*mmuni+ati*ns1 Repu3li+ *. Ira4 9later @$IP:0 #he +*ntra+t .*r the
Basrah A*using Pr*je+t 9BAP: /as a/ar,e, *n Dune ;1 1;80 at the *riginal 2alue *.
>10585 milli*n Ira4i Dinars 9I0D: e4ui2alents t* 15;608 milli*n In,ian Rupees at the
pre2ailing e6+hange rate at that time0 #he pr*je+t /as t* 3e starte, /ithin E0 ,a-s *. the
a/ar, *. the +*ntra+t an, +*mplete, /ithin E6 m*nths0 #herea.ter1 it /*ul, attra+t a
penalt- *. D0D0 101000 per ,a- *. ,ela- su3je+t t* 10 per+ent *. the +*ntra+t 2alue0
#he pr*je+t e6e+uti*n /*rk starte, *n Dul- 81 1;800 #he /ar 3et/een Ira4 an, Iran
3r*ke *ut *n %eptem3er 22 an, ,ragge, *n till 1;88 an, /as .*ll*/e, 3- Ira4 Ku/ait
/ar t/* -ears later0 #he pr*je+t /as in the /ar 5*ne0 It /ent thr*ugh se2eral
0 8n-*.. spells1 3reaking up *. the +*ns*rtium1 +*ntinuing .inan+ial +risis1 .*reign
e6+hange sh*rtages1 .*ur la3*r strikes an, /as alm*st a3an,*ne, at *ne stage0
0 It /as e2entuall- +*mplete, 3- PCP an, han,e, *2er t* the +lient in !ar+h 1;;>0
2er the -ears1 the s+*pe *. the pr*je+t g*t re,u+e, t* E sites1 1881 h*uses1 21
an+illar- 3uil,ings an, *nl- a part *. the *riginal in.rastru+tural ser2i+es0 #he pr*je+t
laste, *2er 1E -ears *. /hi+h the /*rking peri*, a2aila3le t* the +*ntra+t*r /as 52
m*nths *nl-0 #he /*rk remaine, suspen,e, ,uring the remaining peri*,0
CONSTRUCTION PLANNING
#he +*nstru+ti*n plan /as 3ase, *n the .*ll*/ing +*nsi,erati*ns=
10 "ll +*nstru+ti*n /*rk /*ul, 3e ,*ne ,epartmentall- an, n* su3-
6
+*ntra+t*rs /ere t* 3e empl*-e, e6+ept .*r air +*n,iti*ning an,
internal ele+tri.i+ati*n /*rk0
20 Pre-+ast panels1 mem3ers an, +*mp*nents /*ul, 3e use, in
+*nstru+ti*n *. stru+tures0 #he pre-+asting /*ul, 3e ,*ne using
Mis ) C ( te+hn*l*g- at pre-+ast .a+t*r- set up at Um-Fasar0
E0 "n+illar- 3uil,ings /*ul, 3e +*nstru+te, /ith +ast in %I#U
+*lumns an, 3eams an, pre-+ast r**.sla3s0 7alls /*ul, 3e
ma,e *. h*ll*/ +*n+rete 3l*+k mas*nr-1 plastere, *n the
insi,e0
0 >0 #here /*ul, 3e phasing *. +*nstru+ti*n a+ti2ities an, se4uen+e
*. *perati*ns /*ul, 3e s* planne, as t* keep the peak
re4uirement *. la3*ur t* the *ptimal minimum0
50 A*using +*nstru+ti*n /*ul, 3e starte, at t/* sites
+*n+urrentl-1 namel-1 Urn-Fasar an, !a4al0 Kh*r-"I-Gu3air
9K"G: /*ul, 3e taken up as the /*rk *. .*un,ati*ns starte, at
Um-Fasar an, !a4al0
60 7*rk *n the +*nstru+ti*n *. in.rastru+ture /as t* 3e
phase, in su+h a manner that there /as n* a+tual inter.eren+e *.
in.rastru+ture /*rk /ith 3uil,ing +*nstru+ti*n /*rk0
<0 C*nstru+ti*n *. an+illar- 3uil,ings /*ul, 3e taken up last at ea+h site0
7
8
9
10
1)2 NEED FOR CONSTRUCTION PRO.ECT E3PORTS
@l*3ali5ati*n has 3e+*me the +at+h/*r, in the $merging +*n.igurati*ns *. nati*nal
e+*n*mies as it +reates in+rease inter,epen,en+e an, inter+*nne+te,ness *. nati*nal
e+*n*mies1 thus resulting in the er*si*n *. a nati*n8s aut*n*m-0 It 3rings a3*ut
multipli+it- *. linkages an, inter+*nne+ti*ns 3et/een states1 s*+ieties an, +*rp*rate
entities0 It en+*mpasses the pr*+esses 3- /hi+h e2entsH ,e+isi*ns an, a+ti2ities in *ne
part *. the /*rl, +*me t* ha2e signi.i+ant +*nse4uen+es .*r +*mmunities1 +*rp*rates an,
in,i2i,uals in 4uite ,istant parts *. the gl*3e0
7hat /*ul, *ne p*stulate t* 3e the *ut+*me *. gl*3ali5ati*nI
!*st imp*rtant am*ng them are=
9i: "++elerati*n *. te+hn*l*gi+al +hange1
9ii: $6p*rting pr*,u+ts an, ser2i+es1
9iii: (e/ partners in ,istant markets1
9i2: )i+ensing1 laun+hing *r 3u-ing .*reign su3si,iaries
92: $sta3lishing j*int 2entures0
!aj*r impli+ati*ns *. gl*3ali5ati*n *n nati*nal e+*n*mi+ p*li+ies are
11
9i: Rel*+ati*n *. /*rkers1
9ii: Changes in immigrati*n p*li+ies1
9iii: #e+hn*l*gi+al e6+hange1
9i2: %tan,ar,i5ati*n *. la3*ur pra+ti+es0
#he .inal +*nstru+ti*n pr*,u+ts are imm*3ile0 A*/e2er1 the inputs use, 3- +*nstru+ti*n
in,ustr- are highl- m*3ile0 C*nstru+ti*n materials an, ser2i+es pr*2i,e, 3- ar+hite+tural1
+*nsulting1 +*ntra+ting an, +*nstru+ti*n management .irms are m*3ile a+r*ss regi*ns an,
nati*nal 3*un,aries 3ut su3je+t t* +ertain nati*nal p*li+ies like
Pr*+urement la/s0
Immigrati*n rules0
"++re,itati*n *. pr*.essi*nals0
Di..eren+e in the la/s an, l*+al p*li+ies0
Ine2ita3l- there is +r*ss 3*r,er m*2ement *. sp*ns*rs an, +*ntra+t*rs an, man p*/er0
#he saturate, +*nstru+ti*n market in the in,ustriali5e, /*rl, persua,e, maj*r +*ntra+t*rs
.r*m that regi*n t* pursue gl*3ali5ati*n1 in *r,er t* sustain *r e6pan, their 2*lume *.
*perati*n0 In .a+t1 man- lea,ing +*nta+t*rs in the /est earn su3stantial re2enue .r*m
*2erseas *perati*ns1 n*ta3l- .r*m the ,e2el*ping /*rl,0
"n anal-sis *. last t/* ,e+a,es *. In,ian +*mpanies han,ling the pr*je+t *2erseas sh*/
su++ess.ul an, +*mpetiti2e +*mpleti*n *. pr*je+ts /ith +*n,u+i2e an, h*stile +*n,iti*ns0
In these pr*je+ts the anal-sis *. #en,er1 Bi,,ing an, the C*ntra+ts a.ter the a/ar, pla-s
an imp*rtant r*le in its su++ess.ul +*mpleti*n0 #hus the stu,- .*+uses *n the ,i..erent
aspe+ts *. In,ian an, internati*nal +*ntra+ts /here an In,ian +*ntra+t*r g*es .*r
internati*nal +*ntra+t /ith *r /ith*ut +*ns*rtium .*r an pr*je+t0
12
1)4 COMPLE3ITIES OF INTERNATIONAL CONTRACTING
(A5 D"5t"6ct F&', 1',$ C'!6t&% C'6t&act"67
I L'cat"'6 a8a% (&', th$ h',$ c'!6t&%
a: (e/ +*untr-1 ne/ +ulture C ne/ $n2ir*nment
3: (e/ %-stems1 Pr*+e,ures1 Regulati*ns C )a/s
+: C*mmuni+ati*n pr*3lems -Dela-s1 C*sts
,: )*/ .re4uen+- *. pers*nal +*nta+ts 3- AF *..i+e /ith .iel, units C Clients
e: In2*l2ement *. thir, +*untr- suppliers1 imp*rt *. materials C $4uipment0
.: !arine #ransp*rtati*n1 P*rt C Cust*m Regulati*ns
g: )*+al C #hir, +*untr- 2en,ers C %u3-+*ntra+t*rs0
h: #hir, C*untr- C*nsultants
i: Internati*nal Banking pr*3lems
j: Un,erstan,ing multiple +urren+- issues1 C*n2ersi*n1 Re-+*n2ersi*n1 ,e2aluati*n et+0
k: Risks-P*liti+al1 )a/C *r,er1 Pa-ments et+0
I: (e/ te+hn*l*g- 1 %tan,ar,s1 %pe+ts1 4ualit- %-stems1 Pr*+e,ures C meth*,s1 an, a
,is+ipline, en2ir*nment0
13
m: A*me +*untr- RBIJ'$!" Restri+ti*ns
II /h$&$ 8"99 %'! 7$t a#:a6c$ ; T",$9% "6('&,at"'6 '6 +&'<$ct52
a: '*reign $m3assies in *ur +*untr-
3: In,ian $m3assies *2erseas
+: 70B1 "0D0B1 "'DB Pu3li+ati*ns
,: In,ian C '*reign maga5ines
e: Internet0 ///0/*rl,3ank0*rg
K !*nthl- perati*nal %ummar-
K C*ntra+ts "/ar,e,
K )ink t* De2el*pment Business
K )ink t* L,g-marketL
.: De2el*pment Business
g: LD@ - !arketM-///0,grnarket0+*m88
III 1'8 8"99 %'! 5$9$ct th$ c'!6t&"$5 ; P&'<$ct52
a: C*untries ha2ing g**, p*liti+al relati*ns /ith In,ia
3: $C@C Classi.i+ati*n-a1 31 +1 ,1 e1 +re,it/*rth-
+: )a/ C *r,er situati*n
,: %uita3ilit- .*r -*ur +*re +*mpete0
IV /hat 8"99 %'! 9''= ('& "6 P&$->!a9"("cat"'6 D'c!,$6t52
a: Pr*je+t 'inan+e, 3- )*+al @*2tJ'in0 Instituti*n
3: Pri+e Pre.eren+e C*n,iti*ns0
+: DV Criteria C Fuali.i+ati*ns
,: Resp*nsi2e C C*mpl-ing D*+umentati*n0
14
V I6t$&6at"'6a9 R$5'!&c$5 A55$55,$6t5 ; Ma6a7$,$6t
a: $ngineering-Designs C #e+hn*l*g-
3: !aterials C $4uipments
+: !anp*/er-A*me +*untr-1 l*+al C #hir, +*untr-
,: 'inan+ial-)*+al Banking1 A*me +*untr-1 #hir, +*untr-0
e: C*sting C Cash 'l*/-#hree +urren+ies 9min: 9l*+al1 U% N1 Re0:
VI 06'89$#7$ '( h',$ c'!6t&% R$5t&"ct"'65 ; Fac"9"t"$5 a:a"9a*9$
a: RBI1 '$!"1 CP$(P%"
3: $OI! Bank C*-*r,inati*n
+: $C@C-P*liti+al risk1 C*untr- +lassi.i+ati*n
,: CCIJCP$-"ss*+iati*n C Registrati*n
e: $6p*rt Bene.its
VII 06'89$#7$ '( #'"67 *!5"6$55 "6 th$ c'!6t&%
a: )*+al Rules1 Regulati*ns C Restri+ti*ns
3: Banking C Curren+- 'lu+tuati*n1
+: Curren+- +*n2ersi*n C Re-+*n2ersi*n
,: Repatriati*n1 ln.lati*n
e: Imp*rt ,uties-Perm0 C temp0 Imp*rts
.: C*mpan- C In,i2i,ual ta6ati*n
g: )*+al )a/s C Regulati*ns-)a3*ur
h: %u3-+*ntra+ting regulati*ns0
i: )*+al #e+hn*l*g-
j: %tan,ar,s *. a++eptan+e *. /*rks
15
k: )*+al )anguage C $n2ir*nment
I: C*mpeten+e *. l*+al +*ntra+t*rs
m: C*mpeten+e C *utput *. l*+al la3*r
VIII I6t$&6at"'6a9 Sta6#a&#5 '( C'65t&!ct"'6
a: Internati*nal #e+hn*l*g-
3: !eth*,*l*g- *. /*rking
+: %pe+ial materials C %pe+i.i+ati*ns
,: F"JFC %tan,ar,s C $n.*r+ements
e: !eth*, statement D*+umentati*n
.: $n2ir*nmental restri+ti*ns *n /*rking0
g: %a.et- stan,ar,s C pr*+e,ures
I3 BID C'5t"67 a6# S!*,"55"'6
a: Pr*.essi*nal meth*, *. +*sting C %u3missi*n
3: #hree Curren+- +ash tl*/ anal-sis
+: Presentati*n *. 3i, t* internati*nal %tan,ar,s
3 R"5=5 A55$55,$6t
a: P*liti+al
3: Pa-ment *. *n a++*unt 3ills
+: %uspensi*n *. /*rks
,: Curren+- ,e2aluati*n
e: %h*rt.all in .un,ing
16
.: Dela-e, ,e+isi*ns
g: Dela- in appr*2al *. ,ra/ings
h: !arine transp*rtati*n risks
i: %upplier8s risks
j: $s+alati*ns
k: C*n2ersi*n C re-+*n2ersi*n risks
I: Penalties
m: Claims C "r3itrati*n Risks
17
C1APTER 4
OPPORTUNITIES TO INDIAN BIDDERS
1 INTRODUCTION
Re+ent tren,s in,i+ate an in+reasing .*+us an, .un,ing *. pr*je+ts in the s*+ial se+t*r an,
p*2ert- re,u+ti*n pr*grammes0 #hese pr*je+ts represent a si5ea3le an, pr*mising
3usiness *pp*rtunit- .*r In,ian pr*je+t e6p*rters in areas /here the- p*ssess signi.i+ant
+*mpetiti2e a,2antage an, ,*main e6pertise1 /hile simultane*usl- mini mi5i ng the risk
*. n*n-pa-ment0 Pr*je+ts in the ,e2el*pmental .iel, +*n,u+te, 3- ,e2el*ping nati*ns are
th*se /here the le2el *. te+hn*l*g- is high /ith ,i..i+ult *perating +*n,iti*ns an, the
skills an, e6pertise re4uire, t* e6e+ute su+h pr*je+ts are /ell /ithin the +apa3ilities *.
In,ian pr*je+t e6p*rters0 "t the same time1 the .a+t that .un,ing is 3eing pr*2i,e, 3-
!'"s1 *..ers str*ng pa-ment assuran+e0 A*/e2er1 the le2el an, e6tent *. +*mpetiti*n
are mu+h higher as man- .irms .r*m ,e2el*pe, +*untries pre.er t* parti+ipate in these
pr*je+t *pp*rtunities 0
0 2 BU%I($%% 7I#A !IDD)$ $"%#1 "'RIC"( CU(#RI$%=
2er2ie/= +*nstru+ti*n is the m*ther *. all ,e2el*pment a+ti2ities an, there.*re perhaps
it +arries ma6imum imp*rtan+e in the entire +*mple6it- *. e+*n*mi+ a+ti2ities0 #hus it
ma- n*t 3e an e6aggerati*n i. *ne sa-s that .*r e+*n*mi+ +*rp*rati*n 3et/een t/*
+*untries1 +**perati*n in the .iel, *. +*nstru+ti*n is a prere4uisite0
*untries *. "sia1 !i,,le $ast an, %*uth ".ri+a +*2er /i, 2ariet- *. en2ir*nmental
0m,iti+ns0 #his range .r*m m*untains an, hill- regi*ns t* /i,e1 .lat re+essi2e plains1
+trerne rain- areas1 as /ell as +*astal regi*ns an, islan,s surr*un,e, 3- sea0 #he imate
18
als* 2aries .r*m *ne *. e6tremes t* m*re temperate +*n,iti*ns0 )*+all- P0 aila3le
materials +*2er a /i,e range in ea+h *. these +*untries0 #he +*untries *. lese regi*ns
a,*pt ,i..erent +*,e *. pra+ti+es1 stan,ar,s an, ,i2erse +*nstru+ti*n rti2ities /ith 2ariet-
*. l*+al material0 "n, thr*ugh this l*+al +an2as1 a ri+h tra,iti*n . rituals an, li.est-les
/ea2e their */n patterns0 But in all these +*untries there is a rang +*mm*n threa, *. 2ast
e+*n*mi+ ,isparities an, als* 2italit- *. .*lk tra,iti*ns eeking e6pressi*ns 0
0 201 #he !i,,le $ast=
:ur attitu,e t*/ar,s the !i,,le $ast an, "ra3s has +hange, sin+e the 3eginning *. ;<0s0
7hen the *il pri+e e6pl*si*n turne, this ari, an, largel- empt- lan, int* the +hest market
in the /*rl,0 "t *ne time the a2erage mans +*nsent *. !i,,le $ast /as ne *. the en,less
,esert1 +amels1 *ases1 mirages an, 3ell- ,an+es0
imes +hange1 t*,a- the !i,,le $ast stan,s .*r *il0 (* l*nger ha2e the "ra3s sat stri,e his
+amel0 Instea,1 he l*unges in the 3a+k *. his +ust*m 3uilt r*lls1 its an 6aggerati*n1 *.
+*urse 3ut it ser2es t* emphasis h*/ *ur mental pi+ture at the mi,,le sst in Iran1 %au,i
"ra3ia1 Ku/ait1 U"$1 $g-pt an, %u,an0
uher markets su+h as Fatar1 man an, Bahrain are use.ul 3ut n*t parti+ularl- large
rarkets su+h as )i3-a an, Ira4 ma- 3e large 3ut ,ue t* p*liti+al pr*3lems are resentl- *.
s*me/hat limite, 2alue1 alth*ugh situati*n in )i3-a seems t* 3e 8ianging .*r the 3etter0
lul. has 2er- small p*pulati*n /hi+h +*ul, n*t p*ssi3l- sustain the +*nstru+ti*n
r*grarnme, in,e.inite0 7ith the in+rease, kn*/le,ge in the .iel, *. e6pl*rati*n *.
C*untries *. "sia1 !i,,le $ast an, %*uth ".ri+a +*2er /i,e 2ariet- *. en2ir*nmental
+*n,iti*ns0 #his range .r*m m*untains an, hill- regi*ns t* /i,e1 .lat re+essi2e plains1
e6treme rain- areas1 as /ell as +*astal regi*ns an, islan,s surr*un,e, 3- sea0 #he +limate
als* 2aries .r*m *ne *. e6tremes t* m*re temperate +*n,iti*ns0 )*+all- a2aila3le
materials +*2er a /i,e range in ea+h *. these +*untries0 #he +*untries *. these regi*ns
a,*pt ,i..erent +*,e *. pra+ti+es1 stan,ar,s an, ,i2erse +*nstru+ti*n a+ti2ities /ith
2ariet- *. l*+al material0 "n, thr*ugh this l*+al +an2as1 a ri+h tra,iti*n *. rituals an,
li.est-les /ea2e their */n patterns0 But in all these +*untries there is a str*ng +*mm*n
threa, *. 2ast e+*n*mi+ ,isparities an, als* 2italit- *. .*lk tra,iti*ns seeking
e6pressi*ns0
E0201 #he !i,,le $ast=
19
ur attitu,e t*/ar,s the !i,,le $ast an, "ra3s has +hange, sin+e the 3eginning *.
1;<0s0 7hen the *i I pri+e e6pl*si*n turne, this ari, an, largel- empt- lan, int* the
ri+hest market in the /*rl,0 "t *ne time the a2erage mans +*nsent *. !i,,le $ast /as
*ne *. the en,less ,esert1 +amels1 *ases1 mirages an, 3ell- ,an+es0
#imes +hange1 t*,a- the !i,,le $ast stan,s .*r *il0 (* l*nger ha2e the "ra3s sat astri,e
his +amel0 Instea,1 he l*unges in the 3a+k *. his +ust*m 3uilt r*lls1 its an e6aggerati*n1 *.
+*urse 3ut it ser2es t* emphasis h*/ *ur mental pi+ture at the mi,,le east in Iran1 %au,i
"ra3ia1 Ku/ait1 U"$1 $g-pt an, %u,an0
ther markets su+h as Fatar1 man an, Bahrain are use.ul 3ut n*t parti+ularl- large
markets su+h as )i3-a an, Ira4 ma- 3e large 3ut ,ue t* p*liti+al pr*3lems are presentl-
*. s*me/hat limite, 2alue1 alth*ugh situati*n in )i3-a seems t* 3e +hanging .*r the
3etter0
@ul. has 2er- small p*pulati*n /hi+h +*ul, n*t p*ssi3l- sustain the +*nstru+ti*n
pr*gramme, in,e.inite0 7ith the in+rease, kn*/le,ge in the .iel, *. e6pl*rati*n *.
*il an, gas 3*th *n lan, an, *..sh*re an, large p**l *. traine, manp*/er1 In,ia +an
3e+*me p*tential 3i,,er .*r !i,,le $ast market0
E0202 7estern an, %*uthern ".ri+a=
#here is 2er- str*ng e2i,en+e t* suggest that the *il 3elt /hi+h trans.*rme, (igeria
/ithin a ,e+a,e .r*m *ne *. the p**rest nati*ns in the /*rl, int* the e+*n*mi+ p*/er *.
".ri+a1 ma- e6tent right ar*un, the gul. *. guinea an, that the .iel,s s* .ar ,is+*2ere, are
*nl- a tin- .ra+ti*n *. the t*tal reser2es0 #his 2ie/ /as en,*rse, in the /*rl, 3ank rep*rt
*n gl*3al *il reser2es1 /hi+h single, *ut the /estern +*ast *. ".ri+a .r*m %enegal t* as
.ar s*uth as (ami3ia0 as a parti+ularl- pr*mising area *. e6pl*rati*n0 #he +*untries in this
regi*n apart .r*m (igeria an, @hana1 I2*r- C*ast1 )i3eria1 %ierra )e*ne an, %enegal0
Clearl- the ,is+*2er- *. large 4uantities *. *il /*ul, trans.*rm the e+*n*m- *. the
regi*n0 #his +*ul, make /est ".ri+a the great +*nstru+ti*n gr*/th market0 It1 there.*re
3e+*mes an area *. the /*rl, /ell /*rth in2estigating0 %*uthern ".ri+a +*nsists *. %*uth
".ri+a1 )es*th*1 %/a5ilan,1 transkei1 "ng*la1 B*ts/ana1 !*5am3i4ue an, Gam3ia0
%*me *. the +*untries in regi*n are p*liti+all- n*t 2er- sta3le0 'r*m purel- +*mmer+ial
p*int *. 2ie/ the +ase .*r in2esting in the tra,ing /ith %*uth ".ri+a is e6tremel- str*ng0
#his is p*liti+all- 4uite sta3le n*/0 Despite un,*u3te, pr*3lems in *ther still ,e2el*ping
+*untries in the regi*n there are plent- *. *pp*rtunities0 %* the regi*n sh*ul, n*t 3e l*st
sight *. /hile .i6ing up pri*rities0
20
Q020E "sia=
#here are t/* imp*rtant +*ngl*merates in "sia *ne i " "( an, the ther *ne is %"RSRC0
E020E01 "ss*+iati*n *. s*uth $ast "sian nati*ns 9"%$"(:=
#he "ss*+iati*n *. s*uth $ast "sian nati*ns 9"%$"(: is #hailan,1 Philippines1
!ala-sia1 %ingap*re an, In,*nesia0 C*lle+ti2el- the- make *ne *. the greatest gr*/th
market in the /*rl,0 It is a market that has 2er- nearl- e2er- thingH a large p*pulati*n1
2ast material an, ra/ material /ealth1 limitless gr*/th *. ,e2el*pment in all these
+*untries1 e,u+ati*n stan,ar,s are generall- 2er- g**, an, in the +ase *. %ingap*reans it
is e6+ellent1 3eing as g**, as1 an, p*ssi3l- 3etter than1 th*se in an- ,e2el*pe, +*untries
in the /est0 !*st +*n2enient thing is that the 3asi+ ,ipl*mati+ language1 the 2ehi+le *.
in.*rmati*n .l*/1 *. "%$"( is $nglish0
E020E02 %""RC=
%""RC gr*up *. nati*ns is the +l*sest t* us ge*graphi+all- an, in num3er *. +ases
+ulturall- an, ethni+all-0 %""RC +*nsist *. se2en s*uth "sian +*untries Bangla,esh1
Bhutan1 In,ia1 !al,i2es1 (epal1 an, Pakistan an, %hri )anka0
)et us g* thr*ugh the thrust areas 3ase, *n nee,s in s*me *. these +*untries0 %tarting
/ith *ur nearest neigh3*r Bangla,esh1 a +*untr- +ame int* e6isten+e a3*ut three ,e+a,es
ag*0
Rural h*using has a+4uire, a ne/ signi.i+an+e in Bangla,esh sin+e its in,epen,en+e0 "
ne/ ,imensi*n t* rural stru+ture has 3een gi2en 3- e6perien+e *. the +-+l*ne *. 1;;11
/hi+h hit the s*uthern 3elt *. the +*untr-0 #he e6perien+e has le, ge*graphers an,
planners t* +*nsi,er the 3uil,ing *. stru+ture that are p*pularl- kn*/n as ,isaster
h*using0 7h* +an .*rget the ,e2astati*n +ause, 3- ris0 a +- l*neI #he t/* +*untries +an
share kn*/-h*/ an, ren,er +**perati*n in this .iel, in a 3ig /a-0
%ituate, in /estern Aimala-as Bhutan1 it8s esta3lishe, an, gr*/th *. ur3an settlements
has 3een a 2er- re+ent phen*men*n0 7ith Unite, (ati*ns assistan+e1 nati*nal ur3an
,e2el*pment +**perati*n /as esta3lishe, an, stru+ture plans t* gui,e the ,e2el*pment
*.#himpu an, Pluntsh*ling +ities /ere prepare,0 U( assistan+e als* helpe, t* ,e2el*p
21
pr*t*t-pe m*,el h*uses .*r rural areas in+*rp*rating 3asi+ sanitar- .eatures as /ell as
s*lar /ater heating an, impr*2e, +*nstru+ti*n ,etails0 Bhutan an, In,ia are s* +l*sel-
linke, that 3*th +an 3ene.it 3- e6+hange *. tra,iti*nal Bhutanese ar+hite+tural an, ,esign
*. seismi+all- s*un, stru+tures0
)an, sh*rtage is *ne *. the m*st a+ute pr*3lems .a+ing the !al,i2es t*,a-0 7ith
p*pulati*n gr*/th at E05 an, high rate *. ur3an migrati*n1 the +*untries main ur3an
+enter0 !ale n*/ has >50 pe*ple per he+tare0 #he *rigin *. t*urism is m*re in !al,i2es
/as in great part ,ue t* .e/ l*+al in,i2i,uals0 #he nee, t* e+*n*mi5e here meant l*+al
materials1 in,igen*us 3uil,ing te+hni4ues an, the +a,jan ar+hite+ture +hara+teristi+s *.
mal,i2ian t*urist res*rt0
(epal is sprea, *ut length/ise 3et/een n*rthern UP an, 7est Bengal0 Katman,u is the
largest an, *2er+r*/,e, *nl- ur3an metr*p*lis0 Aighest m*untains in the n*rth an,
.ertile plains in s*uth make the t*p*graph- *. (epal0 A*using +*nstru+ti*n in (epal has
3een the ,*main *. */n 3uil,er0 @*2ernment *. (epal has *.. late prepare, a lan, use
plan using g*2ernment in.rastru+ture0 In,ia ,*es g*2ernment h*using in a 3ig /a- an,
the t/* +*untries +an ha2e ri+h e6+hange *. pra+ti+es .*ll*/e, in ea+h *ther lan,0 ..
late the relati*nship 3et/een In,ia an, Pakistan sh*/ an impr*2ing tren,0 ".ter
in,epen,en+e In,ia has ma,e greater te+hn*l*gi+al instituti*ns0 Until the esta3lishment
*. P7D s+h**l *. ar+hite+ture in Kara+hi the *nl- a2aila3le institute /as !a-* s+h**l *.
art in )ah*re0 In the area *. health+are
Pakistan has 3een taking help .r*m In,ia1 /h- the same +an n*t 3e e6ten,e, in the .iel,
*. te+hn*l*g- trans.er an, training the manp*/er0
E0E @P
C*untr- %tatisti+s at a @lan+e
C*untr- rankings *. the t-pe presente, 3el*/ +ann*t preten, t* 3e ,e.initi2eH instea,
the- aspire *nl- t* pr*2i,e the rea,er /ith an appr*6imati*n *. the high an, l*/ en,s *n
a parti+ular s+ale0 C*untr- ,ata 2ar- en*rm*usl- ,epen,ing *n the s*ur+es1 an, the
a3sen+e *. relia3le ,ata *n s*me +*untries re4uires their *missi*n1 /hi+h .urther ske/s
the results0
I
I-Q-8-------L--L- - --- TT
I ;U1 Cana,a I
22
r-lD--------"ustria -----Q0 r 0 - --E1-1E00U-----
t l i
i 1 i
E11500
1------- 0-0------0----Q-----
i 10 V )u6em3*urg
I 8
- - - -- -- 00P0 -----T0T------T0T---
m:
I501 %/it5erlan, W-----EE1800 -- 1601 D--e-n-m-ar-k---8--- =U----E21200 -
j---.0r--------i+-e-Ian-,------- --
1-------------------------W -
801 Irelan,
E11;00
E11;00
U 0000 II--UUUU3U 0T-T ----L80 00 T 00 T 0000 T 00 T 00 T0 T ---T -- TT
r------- -- -------- ------
i )7$%# @DP P$R C"PI#" 9PPP in U0%0 ,*llars:= 200>
I
+- -- ------#------- - ------ - ----- - -- -- -
= 10= $ast #im*r N>00
= I
- 1
23
1
H- 0-QQ-----0----- r-Q-------
20
Burun,i
r------------6Qr---- -- - -- CQ-QHHr*s -----------------8----<00--I
-1 ----Q r--------Q-U -Q-----------------rT0----- 000 -Q-
1 < V C*ng*1 Dem0 Rep0 *. = <00
V I
i
i
1
V
r----
1
-- --------r--600 -0
H
--
E
--
!ala/i
600
--
>
%ierra )e*ne
600
24
5j
%*malia
--
600
81 i V
<00
@ui nea- Bissau
I
---------T0----------- ---------V- -
#an5ania
<00
;1 V
E0> $OCA"(@$ R"#$%
E0>01 %igni.i+an+e
#he e6+hange rate e6presses the nati*nal +urren+-8s 4u*tati*n in respe+t t* .*reign *nes0
'*r e6ample1 i. *ne U% ,*llar is /*rth 10000 Dapanese &en1 then the e6+hange rate *.
,*llar is 10 000 &en0 I. s*mething +*sts E0000 &en1 it aut*mati+all- +*sts E U% ,*llars as
a matter *. a++*untan+-0 @*ing *n /ith .i+ti*us num3ers1 a Dapan @DP *. 8 milli*n &en
/*ul, then 3e /*rth 800 D*llars0
#hus1 the e6+hange rate is a +*n2ersi*n .a+t*r1 a multiplier *r a rati*1 ,epen,ing *n the
,ire+ti*n *. +*n2ersi*n0
In a slightl- ,i..erent perspe+ti2e1 the e6+hange rate is a pri+e0 I. the e6+hange rate +an
.reel- m*2e1 the e6+hange rate ma- tum *ut t* 3e the .astest m*2ing pri+e in the
e+*n*m-1 3ringing t*gether all the .*reign g**,s /ith it0
E0>02 #-pes *. $6+hange Rate
25
Wt is +ust*mar- t* ,istinguish n*minal e6+hange rates .r*m real e6+hange rates0 (*minal
e6+hange rates are esta3lishe, *n +urren+- .inan+ial markets +alle, L.*re6 marketsL1
/hi+h are similar t* st*+k e6+han5e markets0 Rates are usuall2 esta3lishe,
Q -
in +*ntin*us 4u*tati*n1 /ith ne/spaper rep*rting ,ail- 4u*tati*n 9as a2erage *r .inishing
4u*tati*n in the tra,e ,a- *n a spe+i.i+ market:0 Central 3ank ma- als* .i6 the n*minal
e6+hange rate0
Real e6+hange rates are n*minal rate +*rre+te, s*meh*/ 3- in.lati*n measures0 '*r
instan+e1 i. a +*untr- " has an in.lati*n rate *. 101 +*untr- B an in.lati*n *. 51 an, n*
+hanges in the n*minal e6+hange rate t**k pla+e1 then +*untr- " has n*/ a +urren+-
/h*se real 2alue is 10-5M5 higher than 3e.*re0 In .a+t1 higher pri+es mean an appre+iati*n
*. the real e6+hange rate1 *ther things e4ual0
"n*ther +lassi.i+ati*n *. e6+hange rates is 3ase, *n the num3er *. +urren+ies taken int*
a++*unt0 Bilateral e6+hange rates +learl- relate t* t/* +*untries8 +urren+ies0 #he- are
usuall- the results *. mat+hing *. ,eman, an, suppl- *n .inan+ial markets *r in 3anking
transa+ti*n 9usuall- /ith +entral 3ank as a *ne si,e *. the relati*nship:0
ther 3ilateral e6+hange rates ma- 3e simpl- +*mpute, .r*m triangular relati*nships= i.
the e6+hange rate ,*llarJ-en is 10 000 an, the ,*llarJ"ng*lan k/an5a is 100000 then1 as
a matter *. +*mputati*n1 *ne -en is /*rth 10 k/an5a0 (* ,ire+t -enJk/an5a transa+ti*n
nee,s t* take pla+e0 I.1 instea,1 there e6ist a .inan+ial market .*r -en t* 3e e6+hange,
/ith k/an5a1 the e6pe+tati*n is that a+ti*ns 3- spe+ulat*rs 9ar3itrage am*ng markets:
/ill 3ring the parit- *. 10 k/an5a per -en as an e..e+t0
!ultilateral e6+hange rates are +*mpute, in *r,er t ju,ge the general ,-nami+s *. a
+*untr-8s +urren+- t*/ar, the rest *. the /*rl,0 ne takes a 3asket *. ,i..erent
+urren+ies1 sele+t a 9m*re *r less: meaning.ul set *. relati2e /eights1 then +*mputes the
Le..e+ti2eL e6+hange rate *. that +*untr-8s +urren+-0
'*r instan+e1 ha2ing a 3asket ma,e up *. >0 U% ,*llars an, 60 @erman marks1 a +urren+-
that su..ere, .r*m a 2alue l*ss *. 10 in respe+t t* ,*llar an, >0 t* mark /ill 3e sai,
ha2ing .a+e, an Le..e+ti2eL l*ss *. 10606 X >06" M 220
%*me +*untries imp*se the e6isten+e *. m*re than *ne e6+hange rate1 ,epen,ing *n the
t-pe an, the su3je+ts *. the transa+ti*n0 !ultiple e6+hange rates then e6ist1 usuall-
26
re.erring t* +*mmer+ial 2s0 pu3li+ transa+ti*ns *r +*nsumpti*n an, in2estment imp*rts0
#his situati*n re4uires al/a-s s*me ,egree *. +apital +*ntr*ls0
In man- +*untries1 3esi,e the *..i+ial e6+hange rate1 the 3la+k market *..ers .*reign
+urren+- at an*ther1 usuall- mu+h higher1 rate0
E0>0E !*netar- "n, 'inan+ial Varia3les In Cr*ss-)inke, !arkets
10 Interest rates *n #reasur- 3*n,s sh*ul, in.luen+e the ,e+isi*n *. .*reigners t* pur+hase
+urren+- in *r,er t* 3u- them0 In this +ase1 higher interest rates attra+t +apital .r*m
a3r*a, an, the +urren+- sh*ul, appre+iate0 De+isi2e /*ul, 3e the ,i..eren+e 3et/een
,*mesti+ an, .*reign interest rates1 thus a re,u+ti*n in interest rates a3r*a, /*ul, ha2e
the same e..e+ts0
%imilarl- *ther .i6e,-interest .inan+ial instruments +*ul, 3e *3je+t *. the same ,-nami+s0
"++*r,ingl-1 an in+rease *. ,*mesti+ interest rates 3- the +entral 3ank is usuall-
+*nsi,ering a /a- t* L,e.en,L the +urren+-0
(*nerheless1 it ma- happen that .*reigners rather 3u- shares instea, *. #reasur- 3*n,s0
I. this /ere the str*ngest +*mp*nent *. +urren+- ,eman,1 then an in+rease *.
interest rate ma- e2en pr*2*ke the *pp*site result1 sin+e an in+rease *. interest rate 4uite
*.ten ,epresses the st*+k market1 .a2*uring a ti,e *. share ales 3- .*reigners0
In the same Lin2ersalL ,ire+ti*n might .*reign ,ire+t in2estments /*rk0 " restri+ti2e
m*netar- p*li+- usuall- ,epresses the gr*/th perspe+ti2e *. the e+*n*m-0 I. 'DI are
mainl- attra+te, 3- sales perspe+ti2es an, the- +*nstitute a large +*mp*nent *. +apital
.l*/s1 then 'DI in.l*/ might st*p an, the +urren+- /eaken0
(ee,less t* sa-1 th*se +*n,iti*ns are 4uite restri+ti2e an, n*t s* usuall- met0
"s a temp*rar- +*n+lusi*n1 interest rates sh*ul, ha2e an imp*rtant impa+t *n e6+hange
rate 3ut *ne has t* 3e +are.ul t* +he+k a,,iti*nal +*n,iti*ns0
20 In.lati*n rate is *.ten +*nsi,ere, as a ,eterminant *. the e6+hange rate as /ell0 " high
in.lati*n sh*ul, 3e a++*mpanie, 3- ,epre+iati*n0 #he m*re s* i. *ther +*untries enj*-
l*/er in.lati*n rates1 sin+e it sh*ul, 3e the ,i..eren+e 3et/een ,*mesti+ an, .*reign
in.lati*n rates t* ,etermine the ,ire+ti*n an, the s+ale *. e6+hange rate m*2ements0
"ll this /*ul, 3e implie, 3- a /eak 2ersi*n *. L*ne pri+e la/L stating that pri+e
,-nami+s *. a g**, are the same /*rl,/i,e1 a.ter taking int* a++*unt n*minal e6+hange
27
rates0 #hus1 here the a3s*lute le2el is n*t re4ueste, t* 3e e4uali5e, 3ut just the per+entage
,i..eren+es in pri+e0
I. an ham3urger +*sts in Dapan 5 m*re than a -ear ag*1 /hile in U%" it +*sts 8 m*re1 then
the ,*llar sh*ul, ha2e 3een ,epre+iate, this -ear 3- a3*ut 8-5ME0
But in *r,er t* e4uali5e the pri+e ,-nami+s *. ,i..erent g**,s1 m*re than *ne e6+hange
rate +hange ma- turn *ut t* 3e Lne+essar-L0
In re.eren+e t* the *2erall pri+e le2el *. the e+*n*m-1 i. e6+hange rates /*ul, m*2e
e6a+tl- +*unter3alan+ing in.lati*n ,-nami+s1 then real e6+hange rates sh*ul, 3e +*nstant0
n the +*ntrar-1 this is n*t true as a stri+t uni2ersal rule0
%till1 e2en i. this /eak 2ersi*n *. the Lla/L ,en t al/a- h*l,1 high in.lati*n usuall- gi2e
rise t* ,epre+iati*n1 /h*se e6a+t ,imensi*n nee, n*t mat+h the in.lati*n itsel. *r its
,i..eren+e /ith .*reign in.lati*n rates0
-
Curren+-
Per In,ian Rupee #* In,ian Rupee=
"ustralian D*llar
0002;<
EE06>;8
Bra5ilian Real
000>8>
20065;10
- -- -- L-- 00 --0Y-- ------0--- ---i----U- ---- -----=0
=British P*un,1 00012<1 <806<20=
---------- - 0--- -----------X-- --U----------------#------------Q
Cana,ian D*llar I 000258V E806;6>V
I.V
28
------- - --L-0T--0-----0 ----0 i- ---- ------ ----
Chinese Renmin3i 001<66i 50662ES
-- -- ----------Qi ----------- 1------------1
Danish Kr*ne 001E881 <0202E1
V I
1------ 0--D---------- ----i---0 --T Q
$ur*pean $ur* l 000186j 5E0<E00S
0016;>1 50;0E0=
I i
= V
-----rQ------l
0010E51 ;0666ES
V I
i I
----1-----------Q Q
HDapanese &en 205;2;1 00E85<S
V l
Israeli %hekel
A*ng K*ng D*llar
KQreaQ- 7*QI 22Q=8HH-1E+- --- -------- 00-0>>0=
---- ---- =X-T0T0T 0Tl0 H
!ala-sian Ringgit I 000826H 1201 101 i
e-r--r-Z -- - I --T -- -i ----------------Q
!e6i+an Pes* i 002E251 >0E008H
29
V Q
-0 -----------t------------H ------0- ----1
(e/ Gealan, D*llarj 000E1<H E10500;S
-------------------j--------- -------V----------
(*r/egian Kr*ne V 001>6;Q
608086U Q
n:
%*uth ".ri+an Ran, -
608<<5=
-------- -010--------0-
%/e,ish Kr*na
000288
001<80
- 00000 --------i------X--
=%/iss 'ran+
T0 TT 00 000 =T0T0T 00000 T 00 000 D T 00
#ai/anese D*llar
00<E>>S
506166
E>0<2;0 -10E6161
I
TTTTTTTT D=
30
$6+hange Rate *. the In,ian Rupee 2ersus *ther ke- +urren+ies
9" @*2ernment *. In,ia Un,ertaking: (#IC$ I(VI#I(@ #$(D$R I(VI#"#I(
'R BID% IRC(JE0 I 0J@%AP-< J@l#en,erJPa+kage->;V
Date= 2100<02005
#en,er (*ti+e
IRC( I(#$R("#I(") )I!I#$D
%u3= @%AP-<= %trengthening *. %A-5 Wr*m @*,hra t* %hamWaji C pa2ing *. sh*ul,ers
9Km1 E<; X;00 t* Km1 501 X>00: - #en,er .*r Cl1stnt+ti#l *. pen )ine Drains1
Chute Drains an, %tilling Basins 3et/een km0>0> X 000 t* km0>5E X 000 9C*nstru+ti*n P
a+kage-> ;:0
",,iti*nal @eneral !anager1 IRC( Internati*nal )imite,1 1021 @IDC1 )una/a,a
R*a,1 @*,hraE8;0011 in2ites seale, ten,ers in t/* pa+ket s-stem *n pres+ri3e, .*rms
.r*m repute, C*ntra+t*rs ha2ing re4uisite e6perien+e an, .inan+ial +apa+it- .*r e6e+uti*n
*. a3*2e su3je+te, /*rk0 #he appr*6imate estimate, +*st *. pr*p*se, /*rk is Rs05601E
)a+s0 Intereste, 3i,,ers are re4ueste, t* see the minimum-4uali.-ing +riteri*n en+l*se,
as "nne6ure-B an, .*r an- .urther +lari.i+ati*n +*nta+t "@!I @%AP- < J @*,hra0
#he ten,er ,*+uments +an 3e *3taine, .r*m *..i+e *. the ",,iti*nal @eneral !anager1
Ir+*n Internati*nal )t,01 102 @IDe )una/a,a R*a,1 @*,hra - E8;001 Dist0 Pan+hmahal
9@ujarat:1 Ph*ne (*0 261E<>1 ,uring 10=00 "! t* >=00 P!0 up t* 1000802005 3- +ash
pa-ment *. Rs0200J- 9Rupees #/* hun,re, *nl-:0
"lternatel- ten,er +an 3e applie, *n ten,er ,*+uments ,*/nl*a,e, .r*m IRC(8s
/e3site an,0 the ,ra/ings +an 3e *3taine, .r*m the *..i+e *. "@!D @*,hra1 /hi+h shall
3e su3mitte, al*ng /ith ten,er ,*+uments 9Pa+ket-I: ,ul- signe, in all pages0 A*/e2er
the ten,er shall 3e pr*2isi*nal till pre-4uali.i+ati*n +riteria ,*+uments are
su3mitte, an, are .*un, in *r,er0 "ls* DD *. Rs0200J- 9Rupees #/* hun,re, *nl-:
sh*ul, 3e su3mitte, t*/ar,s +*st *. ten,er ,*+ument0
#he ten,er ,*+ument ,ul- .ille, in all respe+ts in t/*-pa+kets s-stem must 3e ,eli2ere,
t* this *..i+e *n 1200802005 up t* 150E0 hrs0 "l*ng /ith re4uisite $arnest !*ne- Dep*sit0
31
Pa+ket -I i0e0 #e+hni+al Bi,1 shall 3e *pene, *n the same ,a- at 16=00 hrs0 In the presen+e
*. -*ur auth*ri5e, representati2es inten,ing t* atten, the *pening0 #he Dat+ *. *pening *r
.inan+ial 3i, shall 3e intimate, t* 4uali.-ing 3i,,ers separatel-0 De+isi*n *. #Re( *n
4uali92 gl ,is4uali.-ing *. 3i,,ers shall 3e .inal an, 3in,ing0
#hanking -*u1 &*urs .aith.ull-1
",,V0 @eneral !anager lRC(J@%AP- < J@*,hra0
"(($OUR$ - B 91J2:
$V")U"#I( CRI#$RI( 'R #$(D$R$R%
"0 $ssential Fuali.-ing Criteria
I0 #he +*ntra+t*r sh*ul, p*ssess the e6perien+e *. ha2ing su++ess.ull- +*mplete, similar
/*rksV C*n+rete /*rks ,uring last < -ears 9en,ing last ,a- *. the m*nth pre2i*us t* the
*ne in /hi+h ten,ers are in2ite, /hi+h sh*ul, 3e an-*ne *. the .*ll*/ing=
i: #hree +*mplete, similar /*rksV C*n+rete /*rks ea+h +*sting n*t less than Rs0220>5
)a+s0
ii: #/* +*mplete, similar /*rksl C*n+rete /*rks ea+h +*sting n*t less than Rs02800<
)a+s0
iii: ne +*mplete, similar /*rkV C*n+rete /*rk +*sting n*t less than Rs0>>0;0 )a+s0
20 #he a2erage annual .inan+ial turn*2er ,uring the last E -ears en,ing E1 st !ar+h *. the
pre2i*us .inan+ial -ear sh*ul, 3e at least Rs01<000 )a+s 9Rupees %e2enteen )a+s *nl-:0
(*tes= #he .inan+ial turn*2er shall 3e ju,ge, .r*m I#CC1 "nnual Rep*rt in+lu,ing Pr*.it
an, )*ss "++*unt0
E0 #he +*ntra+t*r sh*ul, su3mit per.*rman+e +erti.i+ates in 9minimum E n*s01 2 n*s0 *r 1
n*0 as the +ase ma- 3e: .r*m +*mplete, similar /*rksV C*n+rete /*rks in the last < -ears0
>0 #here sh*ul, n*t 3e an- unsatis.a+t*r- per.*rman+e Rep*rt *. the +*ntra+t*r .r*m an-
s*ur+e0
32
"(($OUR$ - B 9212:
$V ")U"#I( CRI#$RI( 'R #$(D$R$R%
I
B0 ther Fuali.-ing Criteria
Registrati*n *. +*mpan-1 Partnership ,ee, J arti+le *. ass*+iati*n > Registrati*n un,er
)a3*ur )a/
Registrati*n un,er %ales #a6 "+t0
20 "2aila3ilit- *. %kille, C traine, manp*/er0
E0 "2aila3ilit- *.t**ls1 Plant C !a+hiner- rele2ant t* the /*rk0
>0 "2aila3ilit- *. a,e4uate testing1 measuring an, inspe+ti*n e4uipment
an, .a+ilities .*r +ali3rati*n *. the same0 92 mark ea+h .*r testing e4uipment1 measuring
C inspe+ti*n e4uipment an, .a+ilities .*r +ali3rati*n:0
50 "2aila3ilit- *. sa.et- applian+esV e4uipment0 92 marks ea+h .*r a2aila3ilit- *. Aelmets1
sa.et- sh*es C sa.et- signs:
60 "2aila3ilit- *. I%-;000 Certi.i+ati*n - 10 marks0
"gen+- /*rke, .*r I% +erti.ie, .irm - 6 marks
"gen+- /*rke, .*r "DBV 7*rl, Bank .un,e, pr*je+t - > marks <0 "2aila3ilit- *.
3anker8s +erti.i+ate0
##") !"RK%
!a60 !arks
E
E
20 E5 10
5
10
10
100
33
#he +*ntra+t*rs sh*ul, pass in all items *. L$ssential Fuali.-ing CriteriaL an, sh*ul,
*3tain minimum 60 marks *ut *. the 100 *. Lther Fuali.-ing CriteriaL t* get sh*rt
liste,V te+hni+all- 4uali .ie,0
#en,erer 9s: ma- please n*te that their *..ers /ill 3e e2aluate, as per the
+re,entialsJ,*+umentsV atta+he, 3- the ten,erer 9s: al*ng /ith the ten,er0
'*r C *n 3ehal. *.
IRC( I(#$R("#I(") )It-08lD#$D
Registere, ..i+e= IRC( Ii8=#$R("#IiS8")USlI#$1 Palika Bha/an1 %e+t*r-OIII1 R0
K0 Puram1 (e/ Delhi- 1100661 In,ia0 #el0 (*0 X;1-011-2688;E60 'a6 (*026885 1650 $-
!ail= in.*[ir+*nnel0+*m
>010 PR$-BID C('$R$(C$
".ter the ten,er ,*+uments are issue, t* sh*rrliste, +*ntra+t*rs an, su..i+ientl- ahea, *.
the ,ate *. su3missi*n *. ten,ers1 a pre-3i, +*n.eren+e is hel, 3- the empl*-erJt* /hi+h
all the inten,ing 3i,,ers are in2ite,0 Be.*re this +*n.eren+e1 the inten,ing 3i,,ers are
als* en+*urage, t* 2isit the site an, see .*r themsel2es the site +*n,iti*ns1 the .a+ilities
a2aila3le at the site an, its 2i+init- an, e6amine all ,ata *n in2estigati*ns et+0 that is
a2aila3le /ith pr*je+t auth*rit- s* that the +*ntra+t*rs ha2e a +lear pi+ture *. /hat is
e6pe+te, *. them an, the +*n,iti*ns un,er /hi+h the /*rks are t* 3e e6e+ute,0 In the
+*n.eren+e1 the j*3 re4uirements /ill 3e +lari.ie, an, +*ntra+t +*n,iti*ns e6plaine,
/here2er an e6planati*n is s*ught0 B- this1 the +*ntra+t*rs /*ul, ha2e a +lear i,ea *. the
+*n,iti*ns *. the +*ntra+t an, the- /ill als* 3e .ree t* ask .*r +lari.i+ati*n *n an- *. the
j*3 re4uirements1 ,esign spe+i.i+ati*ns et+0 an, the 2ari*us +*ntra+t +lauses in+lu,ing
their legal impli+ati*ns0 " summar- re+*r, *. the +*n.eren+e /ill 3e prepare, an, sent t*
all the inten,ing 3i,,ers1 t* /h*m the +*ntra+t ,*+uments /*ul, ha2e 3een sent1 al*ng
/ith amen,ments t* the +*ntra+t ,*+uments resulting .r*m this +*n.eren+e0
>011 R$C$IP# "(D PRC$%%I(@ ' #$(D$R%
D*+uments in2aria3l- spe+i.- the ,ata1 timeS pla+e an, the ,esignati*n *. the *..i+er1 t*
/h*m the +*mplete, ,*+uments are t* 3e su3mitte,0 "l*ng /ith the ten,er1 the 3i,,ers
34
are als* e6pe+te, t* pr*2i,e an $arnest !*ne- Dep*sit - a .i6e, am*unt stipulate, in the
ten,er - in the .*rm *. +ash *r 3*n, *r 3ank guarantee0 #he $arnest !*ne- Dep*sit is t*
ensure that the +*ntra+t*r ,*es n*t 3a+k *ut .r*m his ten,er /hen it is un,er
+*nsi,erati*n n*r .r*m e6e+uting the /*rk a.ter a/ar, *. /*rk0 #en,ers1 una++*mpanie,
3- $arnest !*ne- Dep*sit are n*rmall- reje+te,1 as 3eing n*n resp*nsi2e0 It is als* a
+*ntra+tual stipulati*n that the ten,er sh*ul, 3e su3mitte, e6a+tl- as per the pr*2isi*ns *.
the ,*+uments0 #en,ers1 /ith an- ,e2iati*n *r +*n,iti*nal ten,ers are summaril- reje+te,
as n*n-resp*nsi2e0 #he ten,ers are *pene, in the presen+e *. the ten,erers *r their
auth*rise, representati2es /h* like t* 3e
present at the n*ti.ie, time *. *pening0 ".ter *pening1 the ten,ere, am*unts are rea, *ut
3- the *..i+er *pening the ten,ers .*r the in.*rmati*n *. all th*se present0 %Uita3le
entries *. the ten,ers re+ei2e, are ma,e in a register an, signe, 3- all th*se present0
>012 $V ")V" #I( ' BID%
#he .irst step in the e2aluati*n *. ten,ers is reje+ti*n *. all +*n,iti*nal ten,ers an, th*se
/ith*ut earnest m*ne- ,ep*sit0 #he a++epta3le ten,ers are therea.ter e2aluate,0 "part
.r*m arithmeti+al +he+king1 the ten,ere, rates .*r in,i2i,ual items are +*mpare, /ith the
estimate, rates t* sp*t *ut th*se /ith e6+epti*nall- high *r l*/ rates0 #he empl*-er
reser2es the right t* a++ept *r reje+t an- *..er /ith*ut assigning an- reas*n an, hen+e he
is .ree t* reje+t an- ten,er /ith e6+epti*nall- high *r l*/ rates .*r in,i2i,ual items0 "t
the same timer it is als* n*t *3ligat*r- t* reje+t all the ten,ers0 #he impa+t *. su+h items
rates t* sp*t *ut th*se /ith e6+epti*nall- high *r l*/ rates0 #he empl*-er reser2es the
right t* a++ept *r reje+t an- *..er 7ith*ut assigning an- reas*n an, hen+e he is .ree t*
reje+t an- ten,er /ith e6+epti*nall- high *r l*/ rates .*r in,i2i,ual items0 "t the same
timer it is als* n*t *3ligat*r- t* reje+t all the ten,ers0 #he impa+t *. su+h items *n the
*2erall +*sts *. /*rk +an 3e assesse, an, i. the 2ariati*n in the t*tal +*st is marginal1
su+h ten,ers +an 3e +*nsi,ere, .*r +*mparis*n0 (*rmall-1 the l*/est ten,er +*n.*rming
t* the re4uirement stipUlate, in the ten,er ,*+uments is a++epte,0
>01E " 7"RD ' 7RK
"++eptan+e *. a ten,er is +*mmuni+ate, t* the +*ntra+t*r thr*ugh the letter *. a/ar,0
#his in,i+ates the a/ar, *. the /*rk t* the +*ntra+t*r .*r a spe+i.ie, sum 7ith an a,2i+e
t* him t* atten, the *..i+e *. the empl*-er t* sign the agreement0 #his als* stipulates the
,ate *. +*mmen+ement an, the ,ate *. +*mpleti*n *. /*rk0 "t this stage1 the +*ntra+t*r
is e6pe+te, t* .urnish a per.*rman+e guarantee /hi+h ma- 3e in the .*rm *. a 3*n, *r a
3ank guarantee .*r the n*ti.ie, am*unt #he R&uara t
35
Q P I=\ nee
t*/ar,s earnest m*ne- ,ep*sit /ill 3e release, at this stage0 I.1 h*/e2er1 the +*ntra+t*r
,*es n*t turn up t* sign the +*ntra+t *r .ails t* pr*2i,e the pel.*nnan+e guarantee 3- the
stipulate, time an, ,ate1 the /*rk ma- 3e a/ar,e, t* s*me *ther +*ntra+t*r0 Un,er this
+*n,iti*n1 the earnest m*ne- ,ep*site, 3- the +*ntra+t*r t* /h*m the /*rk /as
*riginall- a/ar,e,1 /ill stan, .*r.eite, t* the empl*-er0
CA"P#$R 6
PR$FU")I'IC"#I( ' C(#R"C#R%
601 I(#RDUC#I(
Pre-4uali.i+ati*n *. +*ntra+t*rs is the m*st imp*rtant pr*+ess In ten,ering an, 3i,,ing .*r
ankin, *. pr*je+ts1 pr*je+t */ner *n the 3asis *. hist*r- *. the +*ntra+t*r1 +urrent status
*. +*ntra+t*r an, his *2erall per.*rman+e pre4uali.ies him
#his n*te is prepare, .*r the e6+lusi2e use *. the 3*rr*/er 9the pur+haser in this
,*+ument: an, sh*ul, n*t 3e in+lu,e, in the pre4uali.i+ati*n ,*+uments ma,e a2aila3le
t* appli+ants0 #* simpli.- presentati*n the n*te .*+uses mainl- *n +*nstru+ti*n +*ntra+ts
9the m*st +*mm*n appli+ati*n *. pre4uali.i+ati*n pr*+e,ures:0 Care sh*ul, 3e taken
/hen preparing pre4uali.i+ati*n ,*+uments .*r *ther t-pes *. +*ntra+ts t* ensure that the
pre4uali.i+ati*n +riteria re.er t* the nee,s an, +hara+teristi+s *. the spe+i.i+ pr*+urement1
/hile 3eing +*nsistent /ith the general prin+iples *utline, in the n*te0
602 C!P$#I#IV$ BIDDI(@ 'R C(%#RUC#I( 7RK%
#he su++ess.ul e6e+uti*n *. +*ntra+ts .*r large 3uil,ings1 +i2il engineering1 suppl- an,
installati*n pr*je+ts1 an, maj*r1 +ust*m-ma,e e4uipment re4uires that +*ntra+ts are
a/ar,e, t* +*mpetent +*ntra+t*rs1 usuall- *n the 3asis *. +*mpetiti2e Bi,,ing
pr*+e,ures0 )arge +*ntra+ts .inan+e, un,er l*ans .r*m the (*rth "meri+an De2el*pment
Bank 9the Bank: are a/ar,e,1 as a rule1 thr*ugh *pen 3i,,ing0
36
H0E #A$ R$FmR$!$(# 'R PR$FU")I'IC"#I( ' BIDD$R%
#his ,*+ument relates spe+i.i+all- t* the sele+ti*n *. +*mpetent +*ntra+t*rs1 pri*r t* the
issue *. the in2itati*ns t* 3i,1 a pr*+e,ure kn*/n as pre4uali.i+ati*n0 Pre4uali.i+ati*n *.
+*ntra+t*rs is re+*mmen,e, .*r large *r +*mple6 /*rks an,1 e6+epti*nall-1 .*r +ust*m
,esigne, e4uipment an, spe+iali5e, ser2i+es0 Pre4uali.i+ati*n is als* ,esira3le in *ther
+ir+umstan+es1 .*r e6ample1 in se+t*r pr*je+ts /ith a pr*grammati+ appr*a+h1 an, /hen a
large num3er *. +*ntra+ts are let *n a Lsli+e an, pa+kageL 3asis0
#he 4uali.i+ati*n *. a +*ntra+t*r is a separate pr*+ess .r*m the 3i, e2aluati*n pr*+e,ure1
/hi+h +*n+entrates *n the pri+e an, merits *. the 3i, itsel.0 Details *. the 3i, e2aluati*n
pr*+e,ure are a,,resse, in the Bank8s !*,el Bi,,ing D*+uments an, Pr*+urement (*te=
Bi, $2aluati*n Pr*+e,ures0
60> B$($'I#% ' PR$FU")I'IC"#I(
#he pre-4uali.i+ati*n pr*+ess is *. a,2antage t* +*ntra+t*rs an, pur+haser alike0
#he pre-4uali.i+ati*n pr*+ess ena3les +*ntra+t*rs1 /h* ma- 3e insu..i+ientl- 4uali.ie, *n
their */n1 t* a2*i, the e6pense *. Bi,,ing *r t* .*rm a j*int 2enture1 /hi+h ma- gi2e a
3etter +han+e *. su++ess0 #he assuran+e that +*mpetit*rs /hi+h la+k the ne+essar-
4uali.i+ati*ns /ill 3e e6+lu,e, .r*m 3i,,ing thus en+*urages lea,ing +*ntra+t*rs *r
suppliers t* 3i,0 #he /ell-4uali.ie, .irms ma- als* pri+e their 3i,s m*re +*mpetiti2el-
/ith the kn*/le,ge that the- /ill *nl- 3e +*mpeting /ith *ther 4uali.ie, 3i,,ers meeting
realisti+ minimum +*mpeten+e +riteria0
Pre-4uali.i+ati*n ena3les pur+hasers=
9a: t* assess the interest generate, 3- the pr*je+t am*ng 4uali.ie, .irms1 an, t* make an-
ne+essar- a,justments in the pr*+urement pr*+ess 9in+lu,ing1 in parti+ular1 the +*n,iti*ns
*. +*ntra+t sharing *. risk1 pa-ment terms1 li4ui,ate, ,amages1 *r +*mpleti*n times
/hi+h ma- 3e per+ei2e, as *ner*us 3- p*tential 3i,,ers: in the e2ent that *nl- a limite,
num3er *. appli+ati*ns are re+ei2e,H
93: #* re,u+e the am*unt *. /*rk an, time in2*l2e, in e2aluating 3i,s .r*m Un4uali.ie,
+*ntra+t*rsH
9+: #* en+*urage l*+al .irms t* .*rm j*int 2entures /ith *ther l*+al *r nternati*nal .irms1
there3- 3ene.iting .r*m their res*ur+es an, e6perien+eH an,
37
9,: #* re,u+e signi.i+antl-1 i. n*t eliminate1 pr*3lems ass*+iate, /ith l*/ pri+es
su3mitte, 3- 3i,,ers *. ,*u3t.ul +apa3ilit-0
605 B"%I% 'R PR$FU")I'IC" #I(
Un,er Bank-.inan+e, pr*je+ts1 the pur+haser is resp*nsi3le .*r preparing the
pre4uali.i+ati*n ,*+uments an, e2aluating the appli+ants0 #he pre4uali.i+ati*n
,*+uments sh*ul, pr*2i,e a +lear 3asis up*n /hi+h pr*spe+ti2e 3i,,ers +an 3e e2aluate,1
.*ll*/ing an *3je+ti2e pr*+ess 3ase, *n .air an, transparent +riteria0 #he ,*+umentati*n
s*ught sh*ul, al/a-s 3e rele2ant1 +learl- state, an,1 s* that pr*spe+ti2e 3i,,ers are n*t
,eterre,1 sh*ul, n*t imp*se an e6+essi2e 3ur,en *. preparati*n *r paper/*rk0
Pre-4uali.i+ati*n sh*ul, 3e ,enie, *nl- t* th*se pr*spe+ti2e 3i,,ers /h* ,* n*t meet the
spe+i.ie, +riteria0 #hus1 th*se /h* prepare pre4uali.i+ati*n ,*+umentati*n .*r a pr*je+t
are resp*nsi3le .*r ensuring that the +riteria are ,ra/n in a++*r,an+e /ith the
realisti+ nee,s *. the pr*je+t an, that the +riteria are su..i+ientl- stringent t* assure that
+nl- pr*perl- 4uali.ie, .irms are in+lu,e, in the .inal list0 $6+essi2el- Ls*.tL +riteria ma-
result in an e6+ess *. unsuita3l- 4uali.ie, appli+ants an, ma- lea, t*
9a: Deterring the 3etter 4uali.ie, .irms .r*m 3i,,ing an,
93: 3taining a l*/ 3i, .r*m a marginall- 4uali.ie, +*ntra+t*r *r supplier0
%in+e pre-4uali.i+ati*n is a preliminar- stage in the pr*+ess *. a/ar,ing a +*ntra+t t* a
+*mpetent 3i,,er1 the pur+haser must 3e a3le t* 2eri.- the statements ma,e 3- the
appli+ants an, t* retain the right t* s*li+it in.*rmati*n .r*m past pur+hasers an, .inan+ial
instituti*ns0 Be+ause there ma- 3e man- appli+ants at the pre4uali.i+ati*n stage0 the
e6tent *. 2eri.i+ati*n sh*ul, 3e limite, t* signi.i+ant issues1 /ith appli+ants 3eing
a..*r,e, the 3ene.it *. reas*na3le ,*u3t0 In su3se4uent stages *. the pr*+urement
pr*+ess1 su+h ,*u3ts ma- 3e in2estigate, i. the- remain rele2ant0
606 $)I@IBI)I#& # PR$ FU")I'&
#he pre-4uali.i+ati*n pr*+ess sh*ul, n*t 3e use, t* limit the num3er *. 3i,,ers1 an, all
pre-4uali.ie, appli+ants must 3e permitte, t* 3i,0 %*me agen+ies maintain regis=ers *.
.irms that meet pre-set 4uali.i+ati*n re4uirements0 %u+h registers are n*t a su3stitute .*r
the pre4uali.i+ati*n pr*+ess un,er *pen 3i,,ing0 Pre-4uali.i+ati*n in Bank-.un,e,
pr*je+ts is *pen t* +*ntra+t*rs1 suppliers1 an, j*int 2entures .r*m an- +*untr- *r
+*untries0
38
60< "DV$R#I%$!$(#
#he pre-4uali.i+ati*n *. 3i,,ers sh*ul, 3e a,2ertise, .*ll*/ing the pr*+e,ures .*r
n*ti.i+ati*n an, a,2ertising spe+i.ie, in the Bank8s Pr*+urement P*li+ies an, Rules0
",e4uate time .*r resp*nse sh*ul, 3e all*/e,0 9%ee als* the Bank8s (*te *n the
Preparati*n an, Pu3li+ati*n *. Pr*+urement (*ti+es:0
Q PR$FU")I'IC"#I( CRI#$RI" # B$ PR$-%$#
" +lear statement *. the re4uirements .*r 4uali.i+ati*n sh*ul, 3e sent t* all appli+ants
/h* /ish t* 3e +*nsi,ere, .*r pre-4uali.i+ati*n0 #he spe+i.i+ +riteria1 an, the
pre4uali.i+ati*n ,*+ument as a /h*le1 must 3e +*nsi,ere, /ith +are as earl- as p*ssi3le
in the pr*+urement pr*+ess0 A*/e2er1 the pre4uali.i+ati*n ,*+uments sh*ul, 3e issue,
*nl- /hen the preparati*n *. engineering ,esigns an, 3i,,ing ,*+uments is /ell-
a,2an+e,1 an, the /*rks are reas*na3l- /ell ,e.ine,0
; #7-$(V$)P$ %&%#$!
#he e2aluati*n *. pre4uali.i+ati*n appli+ati*ns pre+e,es the issue *. in2itati*ns t* 3i,0
Pr*+e,ures su+h as the Lt/*-en2el*pe s-stemL /hi+h entails su3mitting pre4uali.i+ati*n
an, 3i, ,*+uments at the same time1 in separate en2el*pes ,* n*t meet the re4uirements
*. the Pr*+urement P*li+ies an, Rules an, ,e.eat *ne *. the ke- *3je+ti2es *.
pre4uali.i+ati*n that *. sa2ing un4uali.ie, pr*spe+ti2e 3i,,ers the e6pense *. 3i,,ing0
#he t/*-en2el*pe s-stem sh*ul, n*t 3e use, in *pen 3i,,ing0
10 C'I("(C$D PRD$C#%
In,i2i,ual +*ntra+ts ma- *nl- 3e .inan+e, j*intl- 3- the Bank an, *ther len,ers1 i. the
+*lan,ers agree t* the appli+ati*n *. the Bank8s Pr*+urement P*li+ies an, Rules0 #he
pr*+urement pr*+ess is then the same as in an- pr*je+t .un,e, 3- the Bank0
A*/e2er1 there is n*t al/a-s a .ull agreement am*ng +*-.inan+iers *n the pr*+urement
pr*+e,ures t* 3e .*ll*/e,0 In su+h +ases1 spe+i.i+ ,is+rete +*ntra+ts are pr*+ure,1
.*ll*/ing the respe+ti2e +*-.inan+iers8 rules1 un,er Lparallel +*-.inan+ingL arrangements0
#he pre4uali.i+ati*n ,*+uments must then a,,ress the re4uirements *. the respe+ti2e +*-
.inan+iers .*r the +*ntra+ts the- .inan+e0
39
In s*me +ases1 the +* .inan+ing arrangements 9in+lu,ing the e6tent *. the parti+ipati*n *.
the 2ari*us +*-len,ers1 the all*+ati*n *. their .un,s t* the 2ari*us ,is+rete elements *. the
pr*je+t1 an, the e6tent t* /hi+h j*int +* .inan+ing /ill appl-: ma- n*t ha2e 3een
,etermine, at the time *. in2iting .irms .*r pre4uali.i+ati*n1 an, there.*re the
pre4uali.i+ati*n re4uirements .*r the 2ari*us elements *. the pr*je+t /*ul, n*t 3e kn*/n0
#he pre4uali.i+ati*n ,*+uments sh*ul, make the p*siti*n +lear t* the appli+ants an,
all*/ .*r p*ssi3le su3,i2isi*n *. the pr*je+t int* ,is+rete elements .*r a p*tential parallel
+* .inan+ing arrangement0
6011 !U)#IP)$ C(#R"C#%
7here a pr*je+t ma- 3e ,i2i,e, int* separate +*ntra+ts 9sli+es: that ma- 3e +*m3ine,
int* gr*ups *. +*ntra+ts 9pa+kages:1 appli+ants ma- 3e in2ite, t* pre-4uali.- .*r ea+h
spe+i.i+ +*ntra+t separatel-1 *r .*r a pa+kage *. +*ntra+ts /hi+h are essentiall- *. a
similar t-pe an, si5e 3ut s*metimes /ith l*nger ,urati*ns0 "ppli+ants sh*ul, 3e aske, t*
state .*r /hi+h Lsli+esL *r Lpa+kagesL the- /ish t* pre-4uali.-0 "ppli+ants ma- pre-
4uali.- .*r a spe+i.i+ +*ntra+t1 an- sin gle +*ntra+t1 an- +*m3inati*n *. +*ntra+ts1 *r the
entire pa+kage0
"n appli+ant ma- 3e all*/e, t* 3i, .*r an- +*ntra+t .*r /hi+h it is pre-4uali.ie,1 an, it
ma- 3e a/ar,e, m*re than *ne1 ,epen,ing *n its +apa+it- t* +arr- *ut a +*m3inati*n *.
+*ntra+ts0 In su+h +ases1 a/ar,s are ma,e 3- the pur+haser *n the 3asis *. the least +*st
.*r the entire pa+kage *. +*ntra+ts1 taking int* a++*unt an- ,is+*unts *..ere, 3- 3i,,ers
.*r multiple +*ntra+t1 a/ar,0
601101 %u3 - C*ntra+t*rs
#he e6perien+e an, .inan+ial res*ur+es *. su3* *ntra+t*rs ma- n*t 3e a,,e, t* th*se *.
the "ppli+ant .*r purp*ses *. pre4uali.i+aQi*n0 #he +umulati2e e6perien+e an, +apa+it-
*. an appli+ant as a .*rmer su3+*ntra+=0 t*r ma- 4uali.- them as appli+ants .*r
+ertain /*rks0 In +ases /here a highl- spe+iali5e, pr*+ess must 3e use,1 appli+ants
sh*ul, 3e re4uire, t* spe+i.- the names an, 4uali.i+ati*ns *. su+h spe+ialist
su3+*ntra+t*rs1 i. the parti+ular pr*+ess I% n*t a2aila3le in-h*use0 )a+k *. su+h
spe+iali5e, supp*rt1 essential in +ertain +*nstru+ti*n *perati*ns that re4uire1 .*r e6ample1
+hemi+al gr*uting *r un,er/ater repair /*rk +*ul, result in ,is4uali.i+ati*n *. the
"ppli+ant0
601102 D*int Ventures "n, ther '*rms . "ss*+iati*n
40
#he Bank en+*urages the .*rmati*n *. j*int 2entures *. +*ntra+t*rs *r suppliers .r*m the
pur+haser8s +*untr- /ith .*reign +*ntra+t*rs *r suppliers1 3ut ,*es n*t a++ept +*n,iti*ns
.*r pre4uali.i+ati*n *r 3i,,ing /hi+h make su+h j*int 2entures man,at*r-0
7hen t/* *r m*re .irms appl- j*intl- .*r pre4uali.i+ati*n1 spe+ial +*nsi,erati*ns must
3e met0 #he pre4uali.i+ati*n ,*+ument must set *ut +learl- the +*n,iti*ns appl-ing t*
su+h j*int 2entures1 /hether e6isting *r pr*p*se,H t* an- +hange in the mem3ership *.
the j*int 2enturesH *r t* the ass*+iati*n *. pre-4uali.ie, .irms a.ter pre4uali.i+ati*n0 $a+h
part- *. the j*int 2enture must su3mit the +*mplete ,*+umentati*n re4uire, *. an
in,i2i,ual .irm appl-ing .*r pre4uali.i+ati*n0
#he re4uirements ,es+ri3e, .*r j*int 2entures appl- t* ass*+iati*ns1 partnerships1
+*ns*rtia1 an, *ther 2entures in /hi+h .irms ass*+iate /ith ea+h *ther .*rmall- .*r the
purp*se *. +arr-ing *ut a +*ntra+t j*intl-0 Partners *. a j*int 2enture must +*n.irm that1 i.
pre-4uali.ie,1 the j*int 2enture 3i, /ill 3e su3mitte, /ith a .*rmal j*int 2enture
agreement an, that all parties t* that agreement /ill 3e legall- 3*un, j*intl- an,
se2erall- .*r the 3i, an, an- +*nse4uent +*ntra+t0 #he lea, partner in the j*int 2enture
sh*ul, als* 3e ,esignate,1 as /ell as the in,i2i,ual /ith *2erall resp*nsi3ilit- .*r the
j*int appli+ati*n1 /hi+h /ill 3e the prin+ipal +*nta+t .*r +*mmuni+ati*ns0 #he
re4uirements ,* n*t appl- t* su3+*ntra+t arrangements0
" .irm ma- appl- .*r pre4uali.i+ati*n 3*th in,i2i,uall- an, as part *. a j*int 2enture0 It
/ill n*t1 h*/e2er1 3e permitte, t* 3i, .*r the same +*ntra+t as an in,i2i,ual .irm an, as
part *. a j*int 2enture0 In the e2ent that it 3i,s .*r the same +*ntra+t as an in,i2i,ual .irm
an, as part *. a j*int 2enture1 this /ill result in the reje+ti*n *. all 3i,s .*r that +*ntra+t in
/hi+h the parr- is in2*l2e,0
'*rmati*n *r regr*uping *. j*int 2entures a.ter pre4uali.i+ati*n /i II *nl- 3e +*nsi,ere,
i. the a,,iti*nal .irms *r j*int 2entures ha2e alrea,- 3een pre-4uali.ie,0 A*/e2er1 su+h
ne/ j*int 2entures /ill n*t 3e appr*2e, i.1 in the 3*rr*/er8s *pini*n1 this /*ul,
su3stantiall- re,u+e +*mpetiti*n0
i012 C)"RI'IC"#I( !$$#I(@
7here +ir+umstan+es /arrant 9usuall- .*r 2er- large *r 2er- +*mple6 pr*je+ts:1 a
+lari.i+ati*n meeting sh*ul, 3e hel, t* +lear an- ,*u3ts the p*tential appli+ants ma- ha2e
a3*ut the ,*+uments *r the pr*je+t0 I. su+h a meeting takes pla+e1 all .irms that ha2e 3een
issue, /ith pre4uali.i+ati*n ,*+uments1 sh*ul, 3e sent1 at least three /eeks 3e.*re the
41
su3missi*n ,ate1 a +*p- *. the minutes *. the meeting1 listing an- +hanges ma,e t* the
pre4uali.i+ati*n re4uirements *r pr*+e,ure as a result *. the meeting0
601E P"%%I'"I) CRI#$RI"
#he Bank 2er- str*ngl- a,2*+ates that appli+ants sh*ul, 3e pre4uali.ie, 3- meeting
pre,e.ine,1 pre+ise minimum re4uirements0 #he meth*, entails setting passJ.ail +riteria
/hi+h1 i. n*t met su3stantiall- 3- the appli+ant1 results in ,is4uali.i+ati*n0 ther meth*,s
that in2*l2e the use *. su3je+ti2e +riteria t* e2aluate .irms1 ha2e 3een .*un, t* 3e .la/e,
an, ha2e resulte, in +*mplaints .r*m p*tential 3i,,ers that /ere unjustl- ,is4uali.ie,1
an, in seri*us ,ela-s in pr*je+t implementati*n0 ne su+h meth*, is the p*ints s-stem
that relies *n the app*rti*nment *. Lmerit p*intsL0 #his s-stem is 3etter suite, t* the
e2aluati*n *. +*nsultants1 *r .*r +*ntra+ts /hi+h entail
#he +riteria a,*pte, must relate t* +hara+teristi+s that are essential t* ensure satis.a+t*r-
e6e+uti*n *. the +*ntra+t1 an, must 3e pre+isel- state,0 In essen+e1 the +riteria must 3e
+h*sen s* that *nl- +*ntra+t*rs /h* are /ell 4uali.ie, t* +arr- *ut the /*rk are permitte,
t* 3i,0 #he +riteria must als* 3e set s* that the- neither inhi3it +*mpetiti*n n*r set a
pre,etermine, num3er *. .irms t* 3e pre-4uali.ie, all .irms that meet the +riteria sh*ul,
3e in2ite, t* 3i,0 #he pre4uali.i+ati*n +riteria .*r j*int 2entures sh*ul, 3e the same as
th*se .*r single appli+ants0
601> I('R!"#I( # B$ %U@A#
#* ena3le p*tential 3i,,ers t* 3e pre-4uali.ie,1 it is ne+essar- t* seek *nl- su+h
in.*rmati*n as is essential .*r the pur+haser t* ,etermine the appli+ant8s +apa3ilities t*
per.*rm the +*ntra+ts satis.a+t*ril-0 #hese +apa3ilities are n*rmall- +ateg*ri5e, un,er the
hea,ings *. e6perien+e1 pers*nnel +apa3ilities1 e4uipment +apa3ilities1 .inan+ial p*siti*n1
an, litigati*n hist*r-0
6015 $OP$RI$(C$
601501 @eneral $6perien+e
#he appli+ant8s general +apa3ilities sh*ul, 3e relate, t* the a2aila3ilit- *. +urrent1
rele2ant e6perien+e an, the 2alue *. /*rk un,ertaken0 !inimum e6perien+e
re4uirements sh*ul, 3e stipulate, as an annual 2alue *. the general +*nstru+ti*n /*rk
+arrie, *ut *2er a state, peri*,1 e0g01 .i2e -ears0
#he 2alue *. rele2ant /*rk +arrie, *ut sh*ul, 3e presente, as the annual turn*2er1 in
terms *. in2*i+es t* +lients .*r /*rk +arrie, *ut ,uring the -ear1 e6presse, in its
42
e4ui2alent in a +*n2erti3le +urren+-1 i0e1 U%N0 #he 2alue *. ea+h +*ntra+t sh*ul, 3e
+al+ulate, at the e6+hange rate at the en, *. ea+h -ear rep*rte,0 #he +riteri*n .*r
4uali.i+ati*n sh*ul, 3e set at a le2el that ensures that the p*tential +*ntra+t*r /ill n*t 3e
*2er/helme, 3- the si5e *. the0 ne/ +*ntra+t0 '*r instan+e1 the appli+ant8s annual
turn*2er sh*ul, n*rmall- 3e n*t less than 205 times the e6pe+te, annual +ash .l*/ *. the
pr*p*se, +*ntra+t0 #he multiplies ma- 3e re,u+e, .*r 2er- large +*ntra+ts 9sa- U%N
500m: *r 2er- small 9sa- U%N 1 m *r less:1 *r in0 spe+ial +ir+umstan+es1 3ut sh*ul, n*t 3e
less than 1050
#estim*nials an, +erti.i+ates are *. ,*u3t.ul 2alue in assessing appli+ants8 +apa3ilities1
an, are n*t al/a-s a2aila3le0 #hus1 appli+ants sh*ul, n*t 3e re4uire, t* su3mit su+h
,*+uments as a +*n,iti*n *. pre4uali.i+ati*n0
601502 Parti+ular $6perien+e
"ppli+ants sh*ul, ,em*nstrate that the- ha2e +arrie, *ut /*rk *. a nature1 si5e1 2alue1
an, +*mple6it- similar t* that *. the pr*je+t in 4uesti*n0 #here are t/* prin+ipal +riteria
.*r pre4uali.i+ati*n0
'irst1 the appli+ant sh*ul, ha2e +arrie, *ut similar /*rk *. at least a magnitu,e
appr*6imating that *. the pa+kage *. /*rk .*r /hi+h pre4uali.i+ati*n is s*ught0
Depen,ing *n the nature *. the /*rks t* 3e 3i,e,1 the +riteri*n sh*ul, 3e relate, t* the
appli+ant ha2ing +arrie, *ut *ne *r m*re pr*je+ts *. a +ertain 2alue re.erre, t* that *. the
pr*p*se, pr*je+t *2er a spe+i.ie, peri*,1 usuall- the last .i2e -ears 9*r less1 in spe+ial
+ir+umstan+es:0 #he in,i2i,ual 2alue *. su+h pre2i*us +*ntra+ts sh*ul, 3e a3*ut 80
per+ent *. the estimate, +*st1 in+lu,ing +*ntingen+ies1 *. the +*ntra+t t* 3e un,ertaken0
%e+*n,1 the appli+ant sh*ul, ha2e per.*rme, *perati*ns *. a 2*lume an, 4ualit- similar
t* th*se re4uire, .*r the pr*je+t0 '*r e6ample1 /here large-2*lume earth m*2in g1
tunneling1 *r +*n+rete pla+ing is in2*l2e,1 the appli+ant sh*ul, ,em*nstrate e6peri en+e
in th*se *perati * ns1 ha-] ng per.*rme, them at the rates ne+essar- t* meet
a per+entage 9e0g01 80 per+ent: *. the peak annual rate re4uire, .*r the pr*je+t0 "ppli+ants
sh*ul, n*t 3e ,is4uali.ie, 3e+ause the- ha2e n*t ha, ,ire+t e6perien+e in the pur+haser8s
+*untr- *r regi*n0
43
In s*me pr*je+ts1 spe+i.i+ en2ir*nmental +*n,iti*ns ma- re4uire appli+ants t* ha2e
parti+ular rele2ant e6perien+e0 "ppli+ants sh*ul, n*t 3e ,is4uali.ie, s*lel- 3e+ause the-
ha2e n*t +arrie, *ut the e6a+t t-pe *. pr*je+t pr*p*se, i. their e6perien+e is +*mpara3le0
'*r e6ample1 a +*ntra+t*r /h* has n*t ,*ne s* 3e.*re ma- 3e +apa3le *. +*nstru+ting
se/er an, /ater mains i. the +*ntra+t*r has a,e4uate +*mpara3le +i2il
/*rks an, 3uil,ing e6perien+e0
6016 P$R%(($) C"P"BI)I#I$%
#he managerial an, te+hni+al +*mpeten+e *. a +*ntra+t*r is largel- relate, t* its ke-
pers*nnel *n site0 #he e6tent t* /hi+h the appli+ant sh*ul, ,em*nstrate ha2ing sta.. /ith
e6tensi2e e6perien+e sh*ul, 3e limite, t* th*se re4uiring +riti+al *perati*nal *r te+hni+al
skills0 #he pre4uali.i+ati*n +riteria sh*ul, there.*re re.er t* a limite, num3er *. su+h ke-
pers*nnel1 .*r instan+e1 the pr*je+t manager an, th*se superinten,ents /*rking un,er the
pr*je+t manager /h* /ill 3e resp*nsi3le .*r maj*r +*mp*nents 9e0g01 superinten,ents
spe+iali5e, in ,re,ging1 piling1 tunnelling1 *r
earth/*rks1 as re4uire, .*r ea+h parti+ular pr*je+t:0
"ppli+ants sh*ul, n*rmall- 3e re4uire, t* name a prin+ipal +an,i,ate an, an alternate .*r
ea+h ke- p*siti*n0 Criteria *. a++epta3ilit- sh*ul, 3e 3ase, *n=
P
a minimum num3er *. -ears *. e6perien+e in a similar p*siti*nQ an,
a minimum num3er *. -ears *. e6perien+e an,J*r num3er *. +*mpara3le pr*je+ts +arrie,
*ut in a spe+i.ie, num3er *. pre+e,ing -ears0
P
#he re4uirement *. spe+i.ie, e,u+ati*n an, a+a,emi+ 4uali.i+ati*ns is n*rmall-
unne+essar- .*r su+h p*siti*ns1 as +*ntra+t*rs *.ten empl*- +*mpetent sta.. /h* ha2e
learne, their pr*.essi*n L*n the j*3L an, /h* la+k .*rmal 4uali.i+ati*ns0
It ma- 3e appr*priate t* spe+i.- that +ertain p*siti*ns are .ille, 3- in,iSi,uals /h* ha2e
hel, p*sts *. +*mpara3le auth*rit- .*r1 sa-1 three -ears /ith the appli+ant0 #his is s* that
ke- sta..s1 in e6e+uti2e site p*siti*ns1 ha2e su..i+ient kn*/le,ge *. the appli+ant8s
management1 p*li+-1 pr*+e,ures1 an, pra+ti+es t* a+t /ith +*n.i,en+e an, auth*rit-
/ithin that .rame/*rk0
44
1:11< $FUIP!$(# C"P"BI)I#I$%
"n in2ent*r- *. +*nstru+ti*n e4uipment represents a high +apital +*st *2erhea, t* a
+*ntra+t*r0 In +*nse4uen+e1 n*t all +*mpetent p*tential 3i,,ers /ill maintain an in2ent*r-
*. high-2alue items that are in suita3le +*n,iti*n .*r maj*r +*ntra+ts0 In m*st +ases
appli+ants +an rea,il- pur+hase1 lease1 *r hire e4uipment0 It is thus usuall- unne+essar-
.*r pre4uali.i+ati*n t* ,epen, *n the +*ntra+t*r8s */ning generall- a2aila3le items *.
e4uipment0 #he passJ.ail +riteria a,*pte, sh*ul, there.*re 3e limite, *nl- t* th*se 3ulk-
*r spe+iali5e, items that are +riti+al .*r the t-pe *. pr*je+t t* 3e implemente, an, /hi+h
ma- 3e ,i..i+ult .*r the +*ntra+t*r t* *3tain 4ui+kl-0
$2en in su+h +ases1 main +*ntra+t*rs ma- n*t */n the e4uipmentH rather the- ma- rel- *n
spe+ialist su3+*ntra+t*rs *r e4uipment hire .irms0 #he a2aila3ilit- *. the su3+*ntra+t*r
an, the spe+i.ie, e4uipment sh*ul, 3e su3je+t t* 2eri.i+ati*n 9at the time *.
pre4uali.i+ati*n1 *r at the time *. 3i,,ing: in su+h +ases0
Parti+ular +are is nee,e, in setting passJ.ail +riteria .*r e4uipment 3e+ause *. the ,i..erent
skill le2els an, te+hni4ues that +*ntra+t*rs 3ring t* +*nstru+ti*n pr*je+ts0 '*r e6ample1
hea2- li.t +apa3ilit- ma- 3est 3e relate, t* the nee, .*r pla+ing spe+i.ie, items *r .*r
+*nstru+ting +*mp*nents in p*siti*n1 n*t simpl- .*r spe+i.-ing
11111111111111111111111111111111111111111111111111111111111111111111111
1111111
a +rane rate, at s* man- t*ns at its minimum /*rking ra,ius0 #hus1 per.*rman+e3ase,
+riteria ma- 3e m*re rele2ant0
6018 'I("(CI") P%I#I(
601801 @eneral In.*rmati*n
Be+ause *. ,i..ering internati*nal a++*unting pra+ti+es an, ta6 la/s1 pu3lishe,
in.*rmati*n *n the .inan+ial p*siti*n *. +*mpanies1 an, .inan+ial rati*s ,eri2e, the
re.*rm ,* n*t pr*2i,e an e4uita3le internati*nal 3asis .*r e2aluating the .inan+ial
stan,ing *. +*mpanies .*r pre4uali.i+ati*n purp*ses0 (e2ertheless1 au,ite, .inan+ial
statements *r 3alan+e sheets sh*ul, 3e s*ught as a general gui,e t* the .inan+ial health *.
the appli+ant0 '*r e6ample1 the .inan+ial results *2er the last .i2e -ears ari, the pr*je+ti*n
.*r the .*ll*/ing t/* -ears sh*ul, 3e p*siti2e0 C*nsistent l*sses *r a risk *. ins*l2en+-
sh*/n in the a++*unts ma- 3e +ause .*r reje+ting the appli+ant0
45
%*me .irms1 parti+ularl- th*se /h*se shares are tra,e, *n st*+k markets1 ma- justi.ia3l-
*3je+t t* pr*2i,ing +*n.i,ential .inan+ial pr*je+ti*ns0 In su+h +ases1 the *missi*n *. the
in.*rmati*n sh*ul, n*t 3e gr*un,s .*r reje+ting an appli+ant1 pr*2i,e, that *ther .inan+ial
in,i+at*rs are satis.a+t*r-0
#he pur+haser sh*ul, n*rmall- re4uire appli+ants t* pr*2i,e the .*ll*/ing 3a+kgr*un,
in.*rmati*n t* supp*rt the presentati*n in the appli+ati*n .*rms=
"u,ite, annual .inan+ial statements .*r the last .i2e -ears supp*rte, 3- au,it statements
*r ta6 returns0 'irms */ne, 3- in,i2i,uals an, partnerships ma- n*t 3e re4uire, t*
maintain au,ite, a++*unts 3- the la/s *. their +*untries *. *rigin0 In su+h +ases1 their
3alan+e sheets sh*ul, 3e +erti.ie, 3- a registere, a++*untant1 an, supp*rte, 3- ta6
returns1 names an, a,,resses *. the appli+ant8s 3anker9s:1 as 8(ell as the names an,
a,,resses *. in,i2i,uals .amiliar /ith their .inan+ial stan,ing0
601802 Cash 'l*/ Capa3ilit- Re4uirement
#he pur+haser must 3e satis.ie, that the 3i,,ers /ill1 at the time *. a/ar,1 ha2e the
.inan+ial res*ur+es t* implement the pr*je+t satis.a+t*ril-0 Pre4uali.i+ati*n .*ll*/e, 3-
up,ating in.*rmati*n /ith the 3i,1 an, 2eri.i+ati*n pri*r t* a/ar, *. +*ntra+t are 3*th
ne+essar- t* ,etermine the .inan+ial +apa3ilities *. the p*tential +*ntra+t*r1
pre4uali.i+ati*n 3eing a preliminar- stage in the pr*+ess0
#he +ash .l*/ 4uali.-ing +riteri*n sh*ul, 3e 3ase, *n the means t* .inan+e .ull- the
pur+haser8s estimate *. +ash .l*/ .*r 3*th l*+al an, .*reign +urren+- re4uirements .*r
a spe+i.ie, L+riti+alL peri*,0 "ssuming m*nthl- peri*,i+ pa-ments1 a suggeste, meth*,
*. ,etermining these re4uirements is 3ase, *n a straight line m*nthl- +ash .l*/ .*r the
+*ntra+t1 negle+ting an- e..e+ts *. the a,2an+e pa-ments an, retenti*n m*nies0
Cal+ulating .r*m the 3eginning *. the m*nth in2*i+e,1 the L+riti+alL peri*, is ,etermine,
3- a,,ing a +*ntingen+- peri*, *. *ne t* t/* m*nths t* the +umulati2e time peri*,
nee,e, 3- the engineer t* issue the i nterimJm*nthl- +erti.i+ate an, the time nee,e, .*r
the pur+haser t* pa- the am*unt ,ue0 ne m*nth +*ntingen+- sh*ul, su..i+e .*r
+umulati2e time peri*,s *. three m*nths *r less an, t/* m*nths +*ntingen+- .*r l*nger
peri*,s0
#he am*unt estimate, .r*m the a3*2e +al+ulati*ns sh*ul, 3e state, in the pre4uali.i+ati*n
,*+uments as the passJ.ail +riteri*n0 "ppli+ants sh*ul, ,em*nstrate their a++ess t* li4ui,
assets1 lines *. +re,it1 unen+um3ere, assets1 an, *ther .inan+ial means su..i+ient t* meet
46
the spe+i.ie, +ash re4uirement1 net *. *ther kn*/n +*mmitments at the time *. a/ar,1
an, su3je+t t* 2eri.i+ati*n0
01; )I#I@"#I( AI%#R&
Pur+hasers sh*ul, 3e *n their guar, against +*ntra+t*rs /h* res*rt t* e6+essi2e +laims
an, litigati*n as a means t* in+rease in+*me a.ter an a/ar, *. +*ntra+t0 A*/e2er1 in s*me
+*untries1 res*rting t* +laims is an esta3lishe, 3usiness pra+ti+e0 "ppli+ants /ith a
+*nsistent an, signi.i+ant hist*r- *. e6+essi2e +*ntra+t ar3itrati*n an, litigati*n resulting
in a/ar,s *r ,e+isi*ns against them sh*ul, n*t 3e 4uali.ie, t* 3i,0
%* that the litigati*n hist*r- ma- 3e e2aluate,1 appli+ants sh*ul, 3e re4uire, t* list all
+*ntra+ts *2er a state, num3er *. -ears 9n*rmall- the last .i2e -ears: that resulte, in
litigati*n *r ar3itrati*n pr*+ee,ings1 /ith an in,i+ati*n *. the matters in ,ispute1 the
parties in2*l2e,1 the am*unts in ,ispute an, the *ut+*me *. the litigati*n0
#he +riteri*n .*r reje+ti*n sh*ul, 3e *ne *. numer*us ar3itral a/ar,s *r +*urt ,e+isi*ns
against the appli+antH .*r instan+e1 the *++urren+e *. *ne *r t/* +ases *2er .i2e -ears1 .*r
a +*ntra+t*r han,ling1 *n a2erage1 ten +*nstru+ti*n j*3s simultane*usl- sh*ul, n*t 3e a
+ause .*r reje+ti*n0 Un,er the 3est *. +ir+umstan+es1 s*me pr*je+ts Lg* s*urL .*r +auses
su+h as +lash *. pers*nalities *r in+*mpetent management 3- the pur+haser0 n the *ther
han,1 i. litigati*n is .*un, relati2el- .re4uentl- in the 3usiness *. the appli+ant1 it ma-
in,i+ate an attitu,e *. the management *. the .irm /hi+h +*ul, 3e una++epta3l- risk- .*r
the pur+haser i. the appli+ant /ere a/ar,e, the +*ntra+t0
6020 C(DI#I(") PR$FU")I'IC"#I(
7hen an appli+ant .ails t* meet s*me *. the 4uali.-ing +riteria 3- a small margin1 the
appli+ant ma- 3e L+*n,iti*nall- pre-4uali.ie,L1 that is1 pre-4uali.ie, su3je+t t* +ertain
spe+i.i+ re4uirements 3eing met su3stantiall- pri*r t* a pres+ri3e, ,ea,line1 su+h as=
the n*ti.i+ati*n *. the results *. the e2aluati*n1 the issuan+e *. an in2itati*n t* 3i, *r the
su3missi*n *. a 3i, 3- the appli+ant0
#he .*ll*/ing t-pi+al re4uirements 9inter alia: might justi.- L+*n,iti*nal
pre4uali.i+ati*nL=
47
- #he pr*2isi*n *. a,,iti*nal1 a++epta3le1 +riti+al in.*rmati*nH
- Re2isi*ns t* a preliminar- j*int 2enture agreementH
- impr*2ing seni*r managementsH
- "++ess t* a spe+ial item *. e4uipmentH
- #he hiring *. e6perts in spe+iali5e, .iel,sH
- #he appli+ant8s 4uesti*na3le a3ilit- t* un,ertake the pr*p*se, /*rks ,ue t* the
pen,ing a/ar, *. *ther signi.i+ant +*ntra+tsH an,
- #he su3stituti*n *. a +riti+al spe+ialist supplier *r +*lla3*rat*r0
6021 UPD"#I(@ PR$FU")I'IC"#I( I('R!"#I(
Be+ause +ir+umstan+es ma- +hange in the peri*, 3et/een pre4uali.i+ati*n an, the
su3missi*n *. 3i,s1 +*ntra+ts must 3e a/ar,e, *nl- t* 3i,,ers /h* +*ntinue t* meet the
re4uirements .*r pre4uali.i+ati*n0 #he 3i,,ing ,*+uments sh*ul, spe+i.- /hi+h essential
items *. the in.*rmati*n su3mitte, /ith the pre4uali.i+ati*n ,*+ument sh*ul, 3e up,ate,
/ith the 3i,0 In parti+ular1 the pur+haser sh*ul, 3e satis.ie, that 3i,,ers +*ntinue t* ha2e
the re4uire, .inan+ial +apa3ilit-0
#he pur+haser ma- har3*r reas*na3le ,*u3ts a3*ut the 2era+it- *. statements ma,e 3- a
3i,,er0 I. a per+ei2e, /eakness +*ul, materiall- a..e+t the 3i,,er8s +apa3ilit- t* per.*rm
the +*ntra+t satis.a+t*ril-1 then the pre4uali.i+ati*n in.*rmati*n sh*ul, 3e 2eri.ie,0
6022 PR$FU")I'IC"#I( R$PR#
#he pur+haser sh*ul, e2aluate the appli+ati*ns re+ei2e, an, prepare a rep*rt .*r the
Bank8s re2ie/0 #he rep*rt sh*ul, a,,ress .*r e2er- appli+ant ea+h *. the passJ.ail +riteria
set in the ,*+uments0 Dis4uali.i+ati*n *. appli+ants /h* marginall- .ail t* meet the
+riteria sh*ul, 3e highlighte,1 an, in marginal +ases1 ,etails sh*ul, 3e su3mitte,0 #he
Bank ma- ask the pur+haser t* justi.- the e2aluati*n an,J*r re4uest .urther in.*rmati*n *r
+lari.i+ati*n0
602E (#I'IC"#I( ' PR$FU")I'IC"#I(
48
".ter the pur+haser has pr*+esse, an, e2aluate, the pre4uali.i+ati*n su3missi*ns1 an,
re+ei2e, the Bank8s Ln* *3je+ti*nL t* the results *. the e2aluati*n1 the pur+haser sh*ul,
n*ti.- the appli+ants *. the ,e+isi*n0
In all +ases1 the n*ti.i+ati*n sh*ul, in,i+ate that pre4uali.i+ati*n /ill 3e .*ll*/e, 3-
2eri.i+ati*n at the time *. 3i,,ing1 an, that 3i,s shall 3e reje+te, 3- the pur+haser1 at its
,is+reti*n1 i. the 2eri.i+ati*n is unsatis.a+t*r- *r i. the 3i,,er is una3le t* +*n.irm the
spe+i.ie, re4uirements0
"ppli+ants sh*ul, 3e a,2ise, that *nl- .irms an, j*int 2entures that ha2e 3een
pre4uali.ie, un,er this .ull pr*+ess /ill 3e eligi3le t* 3i,0
#he pur+haser sh*ul, make a2aila3le the list *. pre-4uali.ie, 3i,,ers pri*r t* the
issuan+e *. the in2itati*n t* 3i,1 in *r,er t* all*/ su3+*ntra+t*rs an, suppliers
9parti+ularl- l*+al .irms:1 t* +*nta+t the pre-4uali.ie, 3i,,ers0
:02> I(VI#"#I( # #$(D$R
In2itati*ns t* 3i, sh*ul, .*ll*/ as s**n as p*ssi3le a.ter pre-4uali.ie, 3i,,ers ha2e 3een
n*ti.ie,0 #he 3i, ,*+uments sh*ul, 3e issue, *nl- t* pre-4uali.ie, .irms an, sh*ul, re.er
t* the nee, t* pr*2i,e spe+i.ie, up,ate, in.*rmati*n an, an- pre-a/ar, 2eri.i+ati*n
re4uirements0
6025 PR$FU")I'IC" #I( DCU!$(#"#I(=
602501 !inimum In.*rmati*n '*r Pre4uali.i+ati*n D*+umentati*n
I0 Balan+e sheet *. the +*mpan- gi2ing -ears i0e0 t/* -ears 3alan+e sheet0
20 Beauti.ull- printe, 3r*+hure /ith +*l*re, ph*t*graph- *. /*rk e6e+ute, 3- the
C*mpan-0
E0 Brie. resume *. the +*mpan- /ith the ,etails *. 3*ar, *. ,ire+t*rs0
>0 Pr*je+ts e6e+ute, *2er the past .i2e -ears /ith spe+ial menti*n *. the similar pr*je+ts1
i. an-0
50 Certi.i+ates1 i. an-1 a2aila3le .*r satis.a+t*r- e6e+uti*n0
49
60 7hether the pr*je+ts e6e+ute, /ere +*mplete, in time an, i. ,ela-e, an, reas*ns .*r
,ela-s0
<0 7hether an- pr*je+ts ha2e g*ne t* ar3itrati*n1 litigati*n an, .inall- h*/ the- /ere
settle,1 h*/ man- su+h +ases +an 3e re+*r,e,0
80 )ist *. e4uipments1 the +*mpan- */ns an, the pr*p*sal *. e4uipments planning .*r
this parti+ular pr*je+t0
;0 !anp*/er a2aila3le in the *rgani5ati*n0
100 Bi*- ,ata *. the ke- pers*nnel8s /ith spe+ial n*te .*r the pers*ns /h* /ill 3e
resp*nsi3le .*r this pr*je+t .*r +*ntesting an, m*nit*ring .*r the hea, 4uarter0
110 (ame an, 3i*-,ata *. the pr*je+t team managers parti+ularl- *. the pr*je+t manager0
120 (ame *. the 3ankers an, re.eren+es0
602502 Pre4uaDi.i+ati*n D*+umentati*n0
P
%tu,- PF D*+uments Brie.ing (*te
#e+hni+al e6pertise *. similar /*rks $4uipment */ne, 3- +*mpan- 'inan+ial +apa+it- C
#urn*2er
7*rk l*a, C !a60 2alue *. a si ngle pr*je+t rgani5ati*n Chart C CVs *. Ke- Pers*nnel
D*int Venture "greement i.an-
Ph*t*graphs1 Br*+hures Client Certi.i+ates1 "rt0*. "ss*+0 P*/er *. "tt*rne-1
1
P
P
P
50
P
P
P
P
P
In+*me- #a6 Certi.i+ate
P
K )egali5ati*n *. D*+uments C C*mplian+e as per re4uirements1 --utstan,ing
"+hie2ements C Certi.i+ates
K XPr*.ile *. the C*mpan- C its "ss*+iates
K -- )ast E &ears Balan+e %heet
K
K 6026 PR$C"U#I(%0
ne page summer- +hart +*2ering #e+hni+al1 .inan+ial C *ther .eatures *. similar t-pe *.
/*rks0
51
52
:02< %#R" #$@ &
53
K !eet PF e2aluati*n +*mmitteeJC*nsultants t* get in.*rmati*n *n ,*+umentati*n %tu,-
e2aluati*n marking s-stem1 i. an-0
P
"ssess -*ur PF-ranki ng am*ngst parti+ipants an, i. e6pe+te, 3el*/ 61 impr*2e -*ur
Ranking 3- 0#V-"ss*+iati*n C impr*2e, ,*+umentati*n
!eet t*p management1 +*nsultants an, +*mmittee mem3ers t* e6plain p4,*+uments C
ph*t*graphs in pers*n t* appre+iate -*ur ,*+uments0
I,enti.- l*+al representati2e t* esta3lish +*ntinue, +*nta+ts at all le2els0
P
P
602<01 Pre-Fuali.-ing "s " Prime C*ntra+t*r Verses D*int Venture
P Parti+ipate as a Prime +*ntra+t*r unless likel- t* 3e ,is4uali.ie, *ther/ise
K &*u enj*- m*re .ree,*m *. *perati*n /ith*ut a j*int 2enture an, /*ul, generall- 3e
m*re +*mpetiti2e in,i2i,uall- /ith*ut a DV0
K C*nsi,er IV *nl- i.=
a: DV ass*+iati*n is a must as per l*+al la/s
3: Pri+e pre.eren+e is gi2en t* l*+al ass*+iate in 3i, e2aluati*n
+: C*ntra+t in2*l2es e6perien+e in spe+iali5e, te+hn*l*g-
,: C*ntra+t 2alue is 3e-*n, PF +apa+it- in,i2i,uall-
CA"P#$R <
P)"((I(@ "(D !$#AD)@& ' BIDDI(@ I(#$R("#I(")
C(%#RUC#I( PRD$C#%
101 I(#RDUC#I(=
54
'r*m start t* +*mpleti*n1 +*nstru+ti*n pr*je+ts un,erg* a num3er *. phases
+hara+teri5e, 3- man- tasks aime, at i,enti.-ing1 planning1 ,esigning1 an, +*nstru+ting
the pr*p*se, .a+ilit-0 %u+h phases an, tasks ma- 3e gr*upe, int* t/* main stages as
sh*/n in 'igure 1H a Pre+*nstru+ti*n %tage an, a C*nstru+ti*n %tage0
T T-T T-T T T0T-LL11-T T0T11---1 00 - T0T0T-T0T 00 TT 0T T--T0T-
T0T - - T T 00 - TT 0
1E0
r------ -Q----------------I
I I
I 1
V )a, VD. 9.HruHtruttlDVl i C**tratt908Y reliQ 001:8 00 2D I
I ,rr(LinQs C *I! CCIItra, 1
II )Qi:S80UVl8IlgtV +Q-ptntnreU1 I
H ,*+unellQ t* HillD0liiR III I
II mVl8:1#0ltillV1 in the DQiV1^1 I
I +resVlu+ti** *. the Qe, I
I I
= C9:1tQtru+u3tlit- Issues S
Q 0T0 000 0 D
= Pre-+*nstru+ti*n %tage
.igul8e 1= C*nstm+ri*n pr*je+t phases
'ls0 (*0 <01 C*nstru+ti*n Prnie+t P3nses
Duri ng the +*n+eptual planning phase1 the */ner hires ke- +*nsultants t* 3egin sele+ting
the pr*je+t site1 an, ,e2el*ping a +*n+eptual estimate1 plan1 an, pr*gram0 In this phase1
the */ner1 a.ter gathering in.*rmati*n a3*ut the pr*je+t1 makes a ,e+isi*n /hether *r n*t
t* pr*+ee, /ith the pr*je+t0 #he ,esign ,e2el*pment phase +*mprises *.=
55
9I: #he s+hemati+ ,esigns /here the ,esign team in2estigates alternate ,esign s*luti*ns
an, alternate materials an, s-stems1 an,
92: #he ,etaile, ,esign /here the ,esign team e2aluates1 sele+ts1 an, .inali5es the maj*r
s-stems an, +*mp*nents *. the pr*je+t0
#he ,esign phase als* in+lu,es the preparati*n *. te+hni+al ,*+uments1 spe+i.i+ati*ns1 as
/ell as the general +*n,iti*ns0 #he pr*je+t8s s+he,ule an, 3u,get +*ntinue t* 3e
,e2el*pe, an, m*nit*re, ,uring this phase0
#he pr*je+t pr*+urement phase is the time /hen the pr*je+t .*rmall- transiti*ns .r*m
,esign preparati*n int* +*nstru+ti*n preparati*n0 #his phase in+lu,es the 3i,,ing an,
a/ar, pr*+ess0 #he pr*je+t8s s+he,ule an, 3u,get are .inali5e, in this phase0
#he +*nstru+ti*n phase presents the a+tual ph-si+al +*nstru+ti*n *. the pr*je+t0 #his
phase 3egins /ith the m*3ili5ati*n t* the site1 then the implementati*n1 an, .inall- en,s
3- the pr*je+t +l*se*ut0 #he su++ess.ul +*mpleti*n *. a +*nstru+ti*n pr*je+t re4uires a
th*r*ugh un,erstan,ing *. all stages an, phases *. the pr*je+t1 an, +an 3e enhan+e,
thr*ugh integrati*n *. ,esign an, +*nstru+ti*n ,uring the pre-+*nstru+ti*n stage0
-==102 P)"((I(@ 'R BIDDI(@
<0201 Pre-#en,er "+ti2ities
"0 %tu ,- #en,er D*+uments
K !ake *ut a +hart *. @e*graphi+al l*+ati*n *. /*rk1 e60hi3iting 3r*a, 4uantities C
)*+ati*ns
K %u mmari5e %+*pe *. /*rk C Fuantities i,enti.-ing maj*r items *. /*rk C
spe+i.i+ati*ns 9"nne6:
K %ummari5e imp*rtant C*mmer+ial +*n,iti*ns C %tu,- BF '*rmat -Brie.ing (*te
9"nne6:
K )i st *ut am3iguit-1 +*ntra,i+ti*ns C BF in 3i, ,*+uments .*r Bi,,er8s C*n.eren+e
56
P
Che+k up #ranslati*n a++ura+- *. imp*rtant +lause i. 3i, ,*+ument is in *ther th an
$nglish language
B0 !"K$ " BRI$'I(@ (#$
P
!ake *ut a Brie.ing n*te *n the ten,er +*2ering items as per "nne60 Put up the 3rie.ing
n*te t* the management
Dis+uss imp*rtant issues *. the pr*je+t an, alternati2e meth*,*l*gies an, .inali5e
,e+isi*ns *n all imp*rtant issues .*r .urther pr*+essing

C0 'I$)D I(V$%#I@"#I(
De+i,e #eam %i5e .*r in2estigati*n0
)ist *ut Items *.In.*rmati*n .*r +*lle+ti*n0 %tan,ar,i5e Data .*rmat C C*nta+t pers*ns
C*lle+t Data n -
+: 7*rking C*n,iti*ns C Restri+ti*ns C Imp*rts Duties
,: Climati+ C*n,iti*ns
e: )*+al )a/s -)a3*r1 Cust*m Duties
.: #a6ati*n -C*rp*rate C In,i2i,ual
g: Insuran+e -7*rk1 Pers*nal an, !arine
h: Banking - Curren+- ,e2aluati*n #ren,
i: )*+al-%upplies1 #ransp*rtati*n an, su3 +*ntra+t*rs
j: 'a+t*rs a..e+ting C*sts C meth*, *. /*rking0
D0 $%#I!"#I( ' C%#
P
!aterials1 $4uipments1 perati*n C As 0 C*st $stimati*n in #hree Curren+ies
57

!aterials=
a: )*+al1 In,ian C #hir, +*untr- .r*m BF0
3: '*r temp*rar- 7*rks -C*nstru+ti*n !eth*,s0
+: '*r In.rastru+ture C C*nsultants 'a+ilities0
a: 2: $4uipments
3: De+i,e list1 +apa+it-1 s*ur+e1 C timings 3ase, *n meth*,*l*g- C peri*, *.
+*nstru+ti*n0
3: 7*rk *ut @r*ss C ,epre+iati*n +*sts0
+: C*nsuma3les .*r *perati*ns C spares .*r maintenan+e0
,: Pr*.it M Cash pr*.it X Un ,epre+iate, +*sts
e: 7hen t* hire -+*stl- C sh*rt peri*,0
.: %mall items C temp*rar- stru+ture /ith n* sal2age 2alue t* 3e .ull- +harge,0
E: )a3*ur
a: Details *. +ateg*r-1 num3er C peri*,0
3: "ssess m*3ili5ati*n s+he,ule
+: De+i,e pr*,u+ti 2it- n*rms--)*+al C In,ian la3*r
,: '*r l*+al la3*r-Pr*2i,e transp*rt t* site *2er time1 s*+ial se+urit- et+0
e: '*r In,ian )a3*r-Pr*2i,e "ir tra2el1 a++*mm*,ati*n1 .**,1 return ant interme,iate air
passage1 re+reati*n C !e,i+al .a+ilities1 an, +*n+essi*nal messing et+0
>: 2erhea,s C Pr*.it
a:
58
Bank @uarantee
3:
Insuran+e
+:
$0C0@0C0
,:
!aintenan+e
e:
"gen+- +*mmissi*n
.:
AF A $6 penses
g:
%uper2isi*n
h:
'inan+ing +*sts
i:
)i4ui,ate, ,amages
j:
#a6es
k:
C*ntingen+ies
I:
Pr*.it
m: thers 9spe+i.-:
59
$0 Curren+- Variati*n C $s+alati*n
"nal-5e +urren+- 2ariati*n *. s*ur+e +*untries *. materials C e4uipment0 #ake 3anker8s
a,2ise as ne+essar-0
K "nal -5e es+alati*n +*sts *. l*+al +*untr- an, +*untr- *. s*ur+e *. pr*+urement *.
materials an, e4uipments
'0 Bar Chart
'*r in h*use 3ar +hart in,i+ate m*nthl- an, +umulati2e 4uantities an, ma60 ,ail- *utput
.*r ea+h items *. BF /ith an, +apa+it- C num3er *. e4uipments
Item /ise C su3+*ntra+t*r /ise Bar Chart
K D*2e tail this /ith *2er all Bar Chart
K Utili5e this .*r assessment *. m*nthl- la3*r re4uirements an, pl*t Aist*gram .*r la3*r
C sta..
@0 Cash 'l*/
Prepare *2erall +ash .l*/ +hart Prepare +urren+- /ise +ash .l*/ +hart0
2er,ra.t t* 3e restri+te, t* 10 *. CV 9in e6+epti*nal +ases it ma- e6+ee, t* 15 ma6:
Pr*2i,e .*r ,ela-s in pa-mentsC )0Damages Pr*2i,e .*r +*sts .*r E m*nths time *2er
run0
K Pr*2i,e .*r .inan+ing +harges i. an-0
P
P
P
P
<0E !$!B$R%AIP ' CCI I P$PC
In 1;8> @*2ernment *. In,ia /ith the ,epartments relate, t* e6p*rt /*rks like
Department *. $+*n*mi+ "..airs1 Department *. +*mmer+e1 !inistr- *. C*mmer+e1
!inistr- *. 'inan+e an, 2ari*us agen+ies like $OI! Bank1 RBI1 $C@C ,e+i,e, t*
60
- TUUUU* PP 888/llieAIVlIal S0IVI QI0I US00UUII rl2Dt=S0l==D
3egin /ith 2erseas C*nstru+ti*n C*un+il *. In,ia0 #his +*un+il /as primaril- starte, .*r
pr*m*ting Pr*je+t $6p*rts *. In,ia0 #he +*mpan- /h* is intereste, in Pr*je+t $6p*rts
shall *3tain the mem3ership *. aCeI an, get the Pr*je+t $6p*rt C*,e0
<0> 7RKI(@ @RUpU
" multi-instituti*nal 7*rking @r*up has 3een +*nstitute,1 +*nsisting *. $6im In,ia1
$C@C1 Reser2e Bank *. In,ia @*2ernment *. In,ia /hi+h a++*r,s +learan+e .*r
1
e6p*rt +*ntra+ts0
#he 7*rking @r*up !e+hanism .*r pr*2i,ing +learan+es .*r e6p*rt *. +apital1
engineering g**,s an, in,ustrial manu.a+ture1 turnke- an, +i2il +*nstru+ti*n pr*je+ts an,
+*nsultan+- ser2i+es *n +ashJ ,e.erre, pa-ment1 intr*,u+e, in Dul- 1;<5 /as pre2alent
till !a- 2000 /hen RBI amen,e, the gui,elines *n Pr*je+ts an, %er2i+es $6p*rts0 In
terms *. these ne/ gui,elines1 re4uirement *. pre-3i, +learan+e .*r su3missi*n *. 3i,s
.*r e6e+uting pr*je+t e6p*rt +*ntra+ts an, e6p*rts *n ,e.erre, pa-ment terms has 3een
,ispense, /ith0 #he ,elegati*n *. p*/ers .*r p*st-a/ar, +learan+e *. pr*je+t e6p*rt
+*ntra+ts has als* 3een re2ise,0
D$)$@"#I( ' P7$R%;
#a3le (*= <01 P*st "/ar, Clearan+e *. $6p*rts C*ntra+t=
#UR(K$&1 C(%#RUC#I( "(D %UPP)& BID% I C(#R"C#%=
= %+he,ule, C*mmer+ial Banks
= $6im In,ia
=H = 7*rking @r*up
%$RVIC$% BID% I C(#R"C#%=
61
( C"%A #$R!%=
1>0
= %+he,ule, C*mmer+ial Banks
= $6im In,ia
= 7*rking @r*up
= 7*rking @r*up
7RKI(@ @RUP 'R PRD$C# $OPR#10
'ig0 <02= C*mp*siti*n *. 7*rking @r*up
$6im In,ia ser2es as the .*+al p*int an, the %e+retariat t* the 7*rking @r*up0 !eetings
*. the 7*rking @r*up are atten,e, 3- $6im In,ia1 $C@C an, RBI0 #he +*n+erne,
pr*je+t e6p*rters an, their 3ankers are als* ass*+iate, /ith the meetings0 In +ase *.
spe+ial pr*je+ts an, +*ntra+ts *. high 2alue1 representati 2es *. @*2ernment *. In,ia
9!inistr- *. 'inan+e C C*mpan- "..airs1 !inistr- *. C*mmer+e C In,ustr-: are als*
in2ite, t* parti+ipate in the meetings0
#en,ering "n, Bi,,ing Internati*nal C*nstru+ti*n Pr*je+ts
(lC!"R
<0>01 Vari*us se+t*rs *. Pr*je+t $6p*rts1 CCI pr*2i,es ser2i+es t*=
0=0 "gri+ulture C (atural Res*ur+es
I0 'isheries
20 Irrigati*n C Rural De2el*pment
E0 "gr* In,ustries
>0 C*mmer+ial 'arming
62
0=0 $nerg-
I0 $le+tri+
20 #hermal
E0 (atural @as C il
0=0 $n2ir*nment
I0 (*n +*n2enti*nal s*ur+es
0=0 In,ustr-
10 !etals C !inerals
20 Chemi+alsJ Petr*+hemi+als0 .uels1 .ertilisers1 pharma+euti+als
0=0
%*+ial In.rastru+ture
I0
$,u+ati*n
20
Ur3an De2el*pment
E0
A*using
>0
Aealth C P*pulati*n
50
63
7ater %uppl- C %anitati*n
0=0 #ransp*rt C C*mmuni+ati*n
I0 R*a,s C R*a, #ransp*rt
20 P*rts C %hipping
E0 Rail/a-s
0=0 C*nsultan+-
0=0 !ulti-se+t*r
<05 PRC$DUR$% "(D R$FUIR!$(#% 'R PRD$C# $OPR# CD$=
".ter 3e+*ming a mem3er *. CCIIP$PC the pr*je+t +*mpan- +ar register it8s name .*r
getting a Pr*je+t $6p*rt C*,e0 @etting the P$C is the .irst step *. the e6p*rter +*mpan-
in the 3usiness *. pr*je+t e6p*rts0 It is rather n*t an eas- task t* a+hie2e a P$C .r*m the
auth*ri5e, @*2t0 agen+-0
#he +*mpan- re+ei2es .*rms an, ,*+uments .r*m the +*un+il1 a.ter stu,-ing the
,*+uments +*mpan- mi5ht ha2e t* un,er5* l*t *. +han5es in 2ari*us areas0 It might
3 3 Q
3e in the *rgani5ati*n stru+ture1 t*p *r mi,,le management le2els +an re4uire, t* 3e
m*,i.ie, like re+ruiting e6perien+e pe*ple *r ne/ m*re 4uali.ie, pe*ple0 #he +*mpan-
might re4uire a gl*3all- a++epte, internati*nal stan,ar, .*r sh*/ing that s-stem *.
/*rking is transparent an, as per internati*nal n*rms0 #he m*st ,i..i+ult task is t*
implement +hange management 2er- +are.ull-0 Change in ankin, *. s-stem *. /*rking
is al/a-s pain.ul as pe*ple are 3een /*rking in that s-stem .*r -ears0 %* it 3e+*mes a
s*rt *. *rgani5ati*n +ulture .*r e2er-*ne0
%+reening C*mmittee *. the In,ustr- "ss*+iati*ns /hi+h /ill ,etermine an, implement
n*rms .*r In,ian pr*je+t e6p*rters0 In this +*nte6t1 the %+reening C*mmittee ma-
+*nsi,er taking int* a++*unt aspe+ts su+h as=
D I% Certi.i+ati*ns0
64
K "2aila3ilit- *. traine, an, +erti.ie, /*rkmen0
K 'inan+ial stan,ing0
K "2aila3ilit- *. +*nstru+ti*n plant an, ma+hiner-0
!*e /*ul, ensure the setting up *. su+h a me+hanism t* ensure that pr*je+t e6p*rters are
.a+ilitate, un,er 2ari*us supp*rt pr*grammes0 #he s+reening +*mmittee .r*m CCI J
P$PC is the *ne /h* ,eals /ith +*mpanies /h* are intereste, in a+4uiring the P$C0 #he
s+reening +*mmittee anal-5e the ,*+uments an, the s-stem *. /*rking s* that /hen an
In,ian +*mpan- g*es a3r*a, in .uture .*r per.*rming pr*je+t shall 3e a3le t* .ul.ill the
+*ntra+tual +*n,iti*ns0 %u++ess.ul implementati*n *. /hate2er pr*je+ts a +*mpan- gets is
the m*st imp*rtant issue1 as the .uture tra,e *. In,ian pr*je+t e6p*rts entirel- ,epen,s
up*n the past re+*r,s *. su++ess.ul pr*je+ts0 #he +*mpan- earns reputati*n an, market
2alue 3- the 3etter per.*rman+es in the e6e+uti*n *. pr*je+ts0 Keeping all these issues
eligi3ilit- +riteria is set 3- the %C1 s* that 3- the time +*mpan- has applie, .*r P$C1 %C
+an e2aluate it th*r*ughl- in all p*ssi3le aspe+ts0 #hese +riteria are n*t a2aila3le /ith an-
s*ur+e0
%+*pe *. %+reening C*mmittee is limite, t* pr*je+t an, ser2i+es e6p*rts an, ,*es n*t
e6tent t*/ar,s material suppl- +*ntra+ts0 %C has three +ateg*ries .*r +learan+es i0e0 a
+*mpan- +an get P$C .*r three +ateg*ries /hi+h are as .*ll*/s=
I0Pri me +*ntra+t*r0
I)%u3-+*ntra+t*r t* .*reign prime +*ntra+t*r0
II)%u3-+*ntra+t*r t* In,ian prime +*ntra+t0
<0%01 Basis *. +learan+es *. %C=
Clearan+e is gi2en *n a spe+i.i+ 2alue 3asis *r .*r regular *perati*ns0 #he +learan+e is
3ase, *n W1] tra+k re+*r, *. the +*mpan- /ithin the +*untr-1 W2] .inan+ial status as
turn*2er1 3alan+e sheet1 re+*r, *. ta6 pa-ments1 l*an status1 pr*.its et+1 9E: management
e6pertise1 W>] In-h*use +apa3ilit-0
W1] #ra+k re+*r, *. the +*mpan- is 2er- imp*rtant as it gi2es the 3etter pi+ture *. past
per.*rman+e *. the +*mpan-1 present s+enari* *. +urrent pr*je+t1 an, .uture pr*spe+ts1
plan .*r gr*/th0
65
W2] 'inan+ial status generall- ,epen,s up*n turn*2er1 3alan+e sheet1 re+*r, *. ta6
pa-ments1 l*an status1 pr*.its et+0 #he 3etter pi+ture in this aspe+t al/a-s helps the
+*mpan- an, re,u+es hur,les t* get the P$e0
WE] !anagement e6pertise *. the +*mpan- is the a+tual pillar .*r sm**th .un+ti*ning *. it0
#he %C anal-ses the *rgani5ati*n stru+ture1 *rgani5ati*n +ulture1 ,e+isi*n +apa+it- *. t*p
management et+0
W>] In-h*use +apa3ilities +*ul, 3e the +*mpanies in-h*use ,esign ,epartment1 +*ntra+ts
,epartment1 +*nsultan+- ser2i+es1 resear+h an, ,e2el*pment ,epartment1 et+0
#he +*mpan- ,*es n*t re4uire the appr*2al *. %C i. the +*ntra+ts I su3-+*ntra+ts are
/*rth less than E Cr0 "n- +*ntra+t /*rth m*re than Rs0 ECr0 re4uires the +learan+e .r*m
%+reening C*mmittee0
<0502 Categ*ries I $ligi3ilit- Criteria '*r P$C=
I0 !em3ership grante, in +ateg*r- in /hi+h the +*mpan- nee,s i0e0
a0 C*nstru+ti*n +*ntra+ts1 $ngineering Pr*+urement an, C*nstru+ti*n +*ntra+ts .*r
e6p*rts0
30 C*nsultan+- ser2i+es .*r e6p*rts0
+0 $6p*rt *. 3uil,ing an, +*nstru+ti*n materials0
20 "ppli+ati*n su3missi*n 000
a0 %tu,- an, .illing in in.*rmati*n in the .*rms 2er- +are.ull-0
30 %u3missi*n *. pres+ri3e, .*rms t* +*un+il0
01 TT P TT PP Q 1 T r 0 T 00 TT 0T= 00
,0 Pa-ing .ees .*r annual mem3ership W mem3ership is .*r 5 -rs0]
e0 C*mpan- 3e+*mes a mem3er *. the +*un+il0
.0 Regular in.*rmati*n up,ate .r*m +*un+il0
g0 !eeting /ith the +*mpanies *n spe+ial issues0
h0 Pr*m*ti*nal measures .*r intereste, area *. the +*mpan-0
66
#"B)$ (0 <02 '$$ %#RUC#UR$ ' #A$ CU(CI) 'R #A$ ClSlP"(I$%=
#a3le (* <0201 '*r C*nstru+ti*n1 $PC1 #urnke- Pr*je+ts0
%r
Value *. pr*je+ts
"nnual mem3ership .ee
",missi*n .ees
n*0
r0
Upt* 25 Cr0
251000
ta1
20
\25 Cr0
E01000
101000
E0
\250 Cr0
501000
101000
#a3le (* <0202 '*r C*nsultan+- %er2i+es
67
%r0
Value *. pr*je+ts
",missi*n .ees
n*0
10
Upt* 50 )a+0
51000
21000
20
\50 )a+0
101000
21000
E0
\01 Cr0
201000
21000
>0
\05 Cr0
251000
21000
68
#a3le (* <020E !anu.a+tures=
%r
Value *. pr*je+ts
",missi*n .ees
n*0
10
Upt* 25 )a+0
21000
20000
20
\25 )a+0
E1000
21000
\50 )a+0
E0
51000
69
21000
\ICr0
>0
<1000
21000
\05 Cr0
50
121500
21000
\10 Cr0
60
151000
21000
70
I0 #he +*un+il has .a+ilit- 3- /hi+h a +*mpan- +an 3e+*me a li.e mem3er *. the +*un+il0
#he .ee stru+ture ,epen,s as per the +ase ma- 3e0 #h*ugh the +*mpan- gets the li.e
mem3ership 3ut a.ter e2er- gi2en peri*,1 shall un,erg* the same pr*+e,ure .*r rene/al
*. the Pr*je+t e6p*rt +*,e0 #he purp*se 3ehin, rene/ing the P$C is t* +*n.irm *r assure
+*nsisten+- in per.*rman+e1 ,uring the peri*, *. 5-rs0 C*mpan- +an un,erg* man- *r
maj*r +hanges1 it is t* ensure the +*un+il tha= +hanges ha2e n* impa+t *n the
per.*rman+e0
<050E CRI#$RI"=
0=0 #he +*mpan- must 3e a mem3er *. aCeI J P$PC 0
K =0 #he +*mpan- +an 3e *. +ertain nature i0e0 Pu3li+ )t,0 *r Pri2ate )t,0 *r a @*2t0
un,ertaking J ,epartment like pu3li+ se+t*rs 0
P =0 It must ha2e net /*rth as .*ll*/s=
#a3le n* <0E Re4uirements *. CCI .*r +*ntra+t*rs=
%r0
Des+ripti*n
(et /*rth
n*0
in WRs0]
10
Prime +*ntra+t*r
501001000
71
20
%u3-+*ntra+t*r t* .*reign prime +*ntra+t*r
251001000
E0
%u3-+*ntra+t*r t* In,ian prime +*ntra+t*r0
101001000
%.0
Des+ripti*n
$6perien+e
n*0
10
Prime +*ntra+t*r
\ 10 &rs
20
%u3-+*ntra+t*r t* .*reign prime +*ntra+t*r
72
\< &rs0
E 0
%u3-+*ntra+t*r t* In,ian prime +*ntra+t*r0
\ E &rs0
P =0 #he ne/l- .*rme, +*mpanies must ha2e *ne *. the partner /ith min *. 10 -rs
e6perien+e as entrepreneur0
<050> %+reening Pr*+e,ure=
I0 %u3mit 10 +*pies *. appli+ati*n in pres+ri3e, .*rm t* the +*un+il0
20 CCIIP$PC /ill s+rutini5e supplement ,ata an, su3mit t* mem3ers *. %+reening
C*mmittee0
E0 %+reening +*mmittee /ill grant +learan+e 3- re2ie/ing .*ll*/ing p*ints=
I0 C*nstituti*n *. the B*ar, *. Dire+t*rs *. the +*mpan- i0e0 +he+king the 3a+kgr*un,1
rele2ant e6perien+e an, 4uali.i+ati*n0
110 #ra+k re+*r, *. the +*mpan-0
iii0 $6p*sure t* the +*mpan-8s management an, pers*nnel in ,ealing /ith
internati*nal *rgani5ati*ns an, internati*nal spe+i .i+ati*ns0
i20 Fuali.i+ati*ns an, rele2ant e6perien+e *. Ke- Pers*nnel in the ,*+ument0
20 'inan+ial +*n,iti*n *. the +*mpan- /hi+h in+lu,es turn*2er1 lia3ilit-1 3ank l*ans1
share 2alue in the market Wi. an-]1 pai, up +apital1 +*mmitment t*/ar,s pa-ments *. ta6
an, ,uties in pre2i*us ,ealings0
VI0 "ppr*a+h t*/ar,s entering internati*nal markets1 strateg- .*r marketing0
VlI0 In.*rmati*n s-stems the +*mpan- has ,e2el*pe, *r the a,*pte, in.*rmati*n
s-stem an, it8s sm**th .un+ti*ning0
V1110 "3ilit- *. the +*mpan- t* .ur3ish in.*rmati*n re4uire, 3- .*reign instituti*n0
IO0 Details *. plant an, e4uipments */ne, 3- the +*mpan-0
73
(#$= #he +*mplete in.*rmati*n *. the regulati*n +an 3e taken .r*m RBI *r it is als*
a2aila3le *n internet0
#he general step 3- step pr*+e,ure .*r e6p*rts=
I0 De+larati*n as regar,s e6p*rt *. g**,s an, ser2i+es0
20 $6empti*ns0
E0 In,i+ati*n *. imp*rter-e6p*rter +*,e num3er0
>0 "uth*rit- t* /hi+h ,e+larati*n is t* 3e .urnishe, an, the manner *. ,ealing /ith the
,e+larati*n0
a0 De+larati*n in '*rm @RD%D'
30 De+larati*n in '*rm PP
+0 De+larati*n in '*rm %'#$O
50 $2i,en+e in supp*rt *. ,e+larati*n0
60 !anner *. pa-ment *. e6p*rt 2alue *. g**,s0
<0 Peri*, /ithin /hi+h e6p*rt 2alue *. g**,sJs*.t/are t* 3e realise,0
80 $6p*rt *n $l*ngate, Cre,it #erms0
;0 %u3missi*n *. e6p*rt ,*+uments0
100 #rans.er *. ,*+uments0
110 Pa-ment .*r the $6p*rt0
120 Certain $6p*rts re4uiring pri*r appr*2al0
a0 $6p*rt *. g**,s *n lease1 hire1 et+0
30 $6p*rts un,er tra,e agreementJrupee +re,it et+0
+0 C*unter #ra,e0
1E0 Dela- in Re+eipt *. Pa-ment0
1>0 ",2an+e pa-ment against e6p*rts0
74
150 Issue *. ,ire+ti*ns 3- Reser2e Bank in +ertain +ases0
<06 $OPR# PR!#I(
<0601 $sta3lishment . Pr*je+t $6p*rts Pr*m*ti*n C*un+illl
Pr*je+t $6p*rts Pr*m*ti*n C*un+il0 9P$PC: /hi+h a+ts as an ape6 8*rgani5ati*n .*r
enhan+ing pr*je+t e6p*rts0
#his 3*,- +*ul, als* help e2*l2e pr*-a+ti2e appr*a+hes t* a++ess timel- in.*rmati*n0
#his /ill 3e an aut*n*m*us 3*,- an, the main .un+ti*n *. the 3*,- /*ul, t* +reate an
e..e+ti2e s-nerg- am*ng In,ian !issi*ns1 @I1 $OI! In,ia1 $C@C1 In,ustr-
"ss*+iati*ns an, C*mmer+ial Banks t* ensure earl- i,enti.i+ati*n *. pr*je+ts1
intelligen+e +*lle+ti*n1 e..e+ti2e in.*rmati*n ,isseminati*n t* intereste, pr*je+t
e6p*rters0 #he e4uit- +*ntri3uti*n .*r +reati*n *. this 3*,- /*ul, +*me .r*m
@*2ernment1 In,ustr-JIn,ustr- "ss*+iati*ns an, Instituti*ns0
<0602 %tru+ture . #he Pr*je+ts $6p*rts Pr*m*ti*n C*un+il
#he Pr*je+ts $6p*rts Pr*m*ti*n C*un+il /*ul, 3e hea,e, 3- a Dire+t*r @eneral1 /h*
/*ul, 3e a permanent in2itee *. the Aigh P*/ere, %tan,ing C*mmittee0 #he
C**r,inating "gen+- /ill in+lu,e ,i2isi*ns t* han,le C*nsultan+- an, #e+hn*l*g-
De2el*pment0 #his C*un+il /ill +**r,inate e..*rts /ith the Pr*je+t 'a+ilitati*n Cells *.
the In,ian !issi*ns a3r*a,0
(IC!"R
<060E Re+*mmen,e, Instituti*nal C*er,tnati*n8r
150
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S
'ig (*= <0E= Re+*mmen,e, Instituti*nal C**r,inati*n
$OI! In,ia /ill pla- an instrumental r*le1 as +urrent .*+al p*int an, %e+retariat t* the
7*rking @r*up !e+hanism 0= pr*m*ting pr*je+t e6p*rts1 in the .*rmati*n *. P$PC /ith
the help *. @*2ernment an, In,ustr-0 #he C**r,inating "gen+- /*ul, a,,ress 2ari*us
issues in+lu,ing=
10 !arket Intelligen+e= #imel- i,enti.i+ati*n *. internati*nal pr*je+t *pp*rtunities0
20 Data3ase maintenan+e= !aintaining up-t*-,ate ,ata3ase *. *rgani5ati*ns an,
spe+ialists in 2ari*us .iel,s0 engineering1 +apital g**,s supplies1 +*ntra+ting1 pr*je+t
management1 .inan+ial1 en2ir*nmental1 an, s*+ial0
E0Pr*m*ti*nal "+ti2ities= #he .a+ilitating 3*,- /*ul, a+ti2el- engage in pr*m*ti*nal
a+ti2ities t* pr*je+t the image *. In,ia a3r*a,0 #hese /*ul, in+lu,e *rganising r*a,
sh*/sJ presentati*ns1 3ringing *ut pu3li+ati*ns *n the +apa3ilities *. +*mpanies1
*rganising .*reign missi*ns1 net/*rking /ith .un,ing agen+ies1 in,ustr- ass*+i ati*ns0
>0 Centralise, Data3ase= #he C**r,inating "gen+- /ill esta3lish an, m*nit*r a
+entralise, ,ata3ase *n In,ia8s a++re,ite, 2en,*rs1 supplies1 +*ntra+t*rs an, +*nsultants0
%u+h a ,ata3ase /*ul, 3e ,istri3ute, in 2ari*us #ra,e an, In,ustrial 'airs an, thr*ugh
In,ian missi*ns t* enhan+e a/areness *. In,ia8s e6pertise0
50 C*ns*rtia "ppr*a+h t*/ar,s pr*je+t e6p*rts /*ul, 3e gi2en an impetus 3- P$PC t*
help impr*2e pr*spe+ts *. se+uring +*ntra+ts thr*ugh p**ling *. skills1 e6perien+e1
e6pertise an, .inan+ial an, te+hni+al stan,ings0 P$PC /*ul, als* pla-a ke- r*le *n
3ehal. *. in,ustr- in +reating an ena3ling en2ir*nment t* .a+ilitate se+uring *.
su3+*ntra+ts1 +reati*n *. re.eren+e lists as als* parti+ipati*n /ith .*reign +*mpanies as
prime +*ntra+t*rs1 ass*+iates1 mem3ers *. a +*ns*rtia an, su3-+*ntra+t*rs0
60 P$PC /*ul, seek t* pr*m*te e6p*rt *. +apital g**,sJ un,ertaking *. #urnke-
C*ntra+ts .*r the pr*je+ts 3eing set a3r*a,1 /hi+h are ,epen,ent *n In,ia 3- /a- *.
e4uit- parti+ipati*n 3- In,ian pr*m*ters *r suppl- *. ra/ material .r*m In,ia *r 3u-3a+k
*. .inal pr*,u+ts0 P$PC /*ul, assist In,ian +*mpanies in i,enti.-ing target markets ,ul-
.a+t*ring in a,2antages *. ge*graphi+al pr*6imit-1 g**,/ill an, tra,iti*nal linkages0
%pe+ial emphasis ma- 3e pr*2i,e, t* regi*ns su+h as %""RC0
77
<060> R*le . $OI! Bank '*r Pr*m*ting Pr*je+t $6p*rts=
$6im Bank has 3een +l*sel- ass*+iate, /ith the gr*/th *. pr*je+t e6p*rts .r*m In,ia 3-
/a- *. pr*2i,ing .inan+e1 in.*rmati*n an, 3usiness a,2is*r- ser2i+es0 #he 3ank supp*rts
In,ian0 +*mpanies at all stages *. the pr*je+t +-+le .r*m a,2an+e ten,er in.*rmati*n1
gui,an+e in preparati*n *. +*mpetiti2e 3i,s t* pr*2i,ing .inan+ial .a+ilities1 in+lu,ing
l*ans an, guarantees0
#he 3ank e6ten,s .un,e, an, n*n-.un,e, .a+ilities .*r *2erseas in,ustrial turnke-
pr*je+ts1 +i2il +*nstru+ti*n +*ntra+ts1 as /ell as te+hni+al an, +*nsultan+- ser2i+e
+*ntra+ts0 $6im Bank has in pla+e a spe+ialise, +ell t* pr*2i,e a,2an+e in.*rmati*n t*
In,ian +*mpanies *n pr*je+ts 3eing .un,e, 3- multilateral .un,ing agen+ies in 2ari*us
+*untries0
#he re+ent )ines *. Cre,it 9)Cs: signe, 3- $6im Bank /ith a num3er *. +*untries
pr*2i,e .*r .inan+ing spe+i.i+ pr*je+ts instea, *. pr*je+t e6p*rts0 $6amples in+lu,e
rail/a- line pr*je+t in "ng*la1 !*5am3i4ue an, !-anmarH +ri+ket sta,ium in @u-ana1
r*a, net/*rk in !-anmar1 ele+tri.i+ati*n pr*je+ts in %u,an an, @hanaH +ement plant in
Dji3*utiH ele+tri.i+ati*n pr*je+t in %uriname an, "5er3aijan0 #his /ill .a+ilitate e6p*rt *.
pr*je+ts t* a num3er *. ne/ +*untries0
During the hal. -ear en,e, "pril-%ep0 200> 9.*r /hi+h $6im Bank has a++*r,e,
p*sta/ar, appr*2al an,J*r has +*mmitte, .un,e, an,J*r n*n-.un,e, .a+ilities: 2E2
+*ntra+ts 2alue, at Rs E1;;5 +r*re /ere se+ure, in >; +*untries 3- 128 e6p*rters1 as
against <> +*ntra+ts 2alue, at Rs >1;>8 +r*re se+ure, ,uring "pril-%eptem3er 200E 3- 56
e6p*rters in E1 +*untries1E0
lVl$#AD)@& ' BIDDI(@ I(#$R("#I(") C(%#RUC#I( PRD$C#%
K ne *r m*re sp*ns*rs t* +reate %p-
K %p*ns*r t* in+lu,e-
a: !aj*r $ngn0 C*nstr0 C0s e4uipment0 %upplier
3: %p*ns*r als* a+t as 3uil,er *. pr*je+t
+: Pr*je+t +*0 main+lu,e a Prime $4uit- In2est*r an,J*r min*rit-
e4uit- parti+ipati*n 3- g*2t0
78
K Pr*je+t +*-Raise 3ulk .inan+ing .*r the pr*je+t .r*m +*mmer+ial len,er an,J*r 'inan+ial
Instituti*n-supp*rte, 3- $eC agen+-0
K 'inan+ing generall- *n ((-Re+*urse 3asis i0e0 )en,er /ill ha2e ( .inan+ial
re+*urse .*r repa-ment *. l*an either 3- sp*ns*r Jshare h*l,er *r h*st g*2t0
K Re+*urse is limite, t* Pr*je+t C*0C its assets in+lu,ing real estate1 plant C e4uipment1
+*ntra+tual rights1 per.*rman+e B*n,1 insuran+e1 g*2t0 guarantees i. an-0
K Pr*je+t +*0 /ill */n an, *perate the .a+ilit- .*r a limite, peri*, *. 15 t* E0 -ears till
pa-*.. *. ,e3ts an, pr*2i,e a reas*na3le return *n $4uit-0
K "t the en, *. the C*n+essi*n Peri*, the pr*je+t +*0 /ill trans.er the pr*je+t t* the h*st
@*2t0
K P*liti+al C $+*n*mi+ un+ertainties in ,e2el*ping +*untries are main *3sta+les .*r Risks
in B# Pr*je+ts0
K "lternati2e #e+hni4ues *. 7*rk $6e+uti*n
K $6tent *. l*+al *r h*me +*untr- su3-+*ntra+ting rgani5ati*n .*r e6e+uti*n in .iel, C
AF0 %e4uen+e *. *perati*ns C inter ,epen,en+ies B"RCA"R#
"nal-sis *. pr*per +*st0 %tu,- BF an, ,e+i,e .i nal 2alue *. 3i,0 %tu,- imp*rtant
+lauses in internati*nal +*ntra+t0
<0;01 D$%I@( B)I@"#I(
I. a +*ntra+t*r is t* 3e resp*nsi3le .*r the +*mpleti*n *. the1 +*nstru+ti*n /*rks /ithin a
.i6e, pri+e an, time1 then the +*ntra+t*r1 nee,s t* ha2e +*ntr*l *2er a num3er *. aspe+ts
*. the /*rk0 32i*usl-1 the +*ntra+t*r /ill pri+e .*r the resp*nsi3ilit- /hi+h it takes *n0
#hus1 i. at the *utset there is a pr*perl- +*nsi,ere, per.*rman+e spe+i.i+ati*n .*r the-
pr*je+t1 the +*ntra+t*r /ill 3e a3le t* ,esign Dr pr*+ure the ,esign an, take resp*nsi3ilit-
.*r that ,esign0 A*/e2er1 the sp*ns*r must a2*i, inter.ering /ith the ,etaile, ,esign
*ther than in ha2ing a m*nit*ring r*le0 #hus1 /hilst it is 4uite +*mm*n .*r the sp*ns*r t*
app*int an in,epen,ent +*nsultant t* m*nit*r an,1 in,ee,1 t* ha2e p*/ers *. *3je+ti*n t*
the +*ntra+t*r8s ,esign1 the in.luen+e is passi2e1 i0e0 a right *. *3je+ti*n1 rather than a+tual
,esign *. /*rks0
Un,er $nglish +*n+epts *. la/1 /here a +*ntra+t*r has a ,esign *3ligati*n1 there is an
implie, term that the , sign /ill 3e .it .*r its purp*se0 (*rmall-1 +*nsultants *nl- ha2e an
79
*3ligati*n t* use all ,ue pr*.essi*nal skill1 +are an, ,iligen+e 3ut the- ,* n*t guarantee
that the ,esign /ill 3e .it .*r its purp*se0 #hus1 /here a ,esigner has n*t 3een negligent
3ut the ,esign ,*es n*t a+tuall- a+hie2e that /hi+h /as *riginall- inten,e,1 the
+*nsultant ma- /ell ha2e n* lia3ilit-0
Designs .*r these t-pes *. pr*je+ts ten, t* 3e trie, an, teste, alth*ugh the a+tual use *r
meth*, *. +*nstru+ti*n ma- 3e inn*2ati2e0 #his re,u+es a su3stantial area *. risk s* .ar
as the +*ntra+t*r is +*n+erne,1 as /ell as ha2ing the a,,e, a,2antage *. assuring the
.un,ing instituti*ns an, in2est*rs that the- /ill n*t 3e the pr*u, */ners *. a L/hite
elephantL0
In s* .ar as the sp*ns*r ma- /ish t* ha2e 2ariati*ns1 it is n*rmall- the resp*nsi3ilit- *.
the +*ntra+t*r t* ,esign su+h 2ariati* ns an,1 i. it 3elie2es that these /ill ha2e an a,2erse
e..e+t up*n the +*mplete, /*rk s 1 it must ha2e the right t* *3je+t t* them08
In 3rie.1 there.*re1 the sp*ns*r /ill ha2e resp*nsi3ilit- .*r the ,esign 3rie. an,
per.*rman+e spe+i.i+ati*n an, it /ill 3e .*r the +*ntra+t*r t* meet th*se +riteria0 In +ases
/here the +*ntra+t*r +arries *ut ,esi5n there nee,s t* 3e s*me in,epen,ent
t==-
,esign au,it0 #here is little purp*se in ea+h *. the sp*ns*r1 @*2ernment an, .un,ing
institute their */n in,epen,ent +he+ker0 @*2ernments are *.ten un/illing t* pa- .*r an
in,epen,ent au,it an, -et re+*r, this t* 3e ,*ne0 "++*r,ingl-1 *ne +*mpr*mise is .*r the
sp*ns*r t* pa- .*r the ser2i+es *. an in,epen,ent +*nsultant ari, .*r th*se ser2i+es t* 3e
ren,ere, primaril- .*r the 3ene.it *. @*2ernment0
#he +*ntra+t*r ma-*r ma- n*t 9,epen,ing up*n the *2erall e2aluati*n *. risk: 3e
all*/e, e6tensi*ns *. time .*r ,ela-s 3- the in,epen,ent
+he+ker0 %imilar
pr*2isi*ns ma- e6ist .*r an in,epen,ent au,it as t* 4ualit- +*ntr*l0 32i*usl-1 4ualit-
+*ntr*l is *. interest t* all parties0 7hilst this has al/a-s 3een the +ase1 the a3ilit- t*
a+hie2e it ,epen,s up*n the 4ualit- an, a3ilit- *. the pers*nnel in2*l2e,0 #hus1 in
+h**sing th*se /h* are t* 3e in2*l2e, in these t-pes *. pr*je+ts1 it is essential that the-
ha2e e6perien+e *. /*rking /ithin the parti+ular l*+ati*n an, ha2e ne+essar- te+hni+al
an, managerial a3ilities0
80
<0;02 #A$R B)I@"#I(%
a: %ite C*n,iti*ns
n m*st maj*r pr*je+ts1 there ,*es seem t* 3e a +*nsensus that the +*ntra+t*r sh*ul, take
resp*nsi3ilit- .*r gr*un, +*n,iti*ns0 %*metimes1 it ma- transpire that the gr*un,
+*n,iti*ns .*un, at the site strike at the 2er- heart *. the pr*je+t an, in su+h +ases there
has t* 3e s*me +*mmer+ial settlement0
#he ,egree *. risk an, the pri+0 i ng *. that risk 3- the +*ntra+t*r is a matter /hi+h
,epen,s *n the parti+ular +ir+urra stan+es0 Pr*2i,e, that the +*ntra+t*r is a3le t* ,esign
*ut *. a,2erse gr*un, +*n,iti*n=s1 then it /*ul, appear that a num3er *. internati*nal
+*ntra+t*rs are prepare, t* take the risk0 In that respe+t1 it is 4uite n*ti+ea3le that
+*ntra+t*rs .r*m "sia an,1 in,ee,1 .r*m +*ntinental $ur*pe1 appear m*re prepare, t*
a++ept risk *. a,2erse gr*un, +*n,iti*ns than sa- +*ntra+t*r1 .r*m the Unite, King,*m0
#his ,i..eren+e in appr*a+h ma- relate t* the appr*a+h *. +*ntra+t*rs in their
internati*nal regi*ns 3ut ne2ertheless it ,*es seem that i. a +*ntra+t*r /ishes t*
parti+ipate in a limite, re+*urse .inan+e pr*je+t1 then a,2erse gr*un, +*n,iti*ns are
resp*nsi3ilit- that he /ill ha2e t* a++ept0
3: Variati*ns
#here are1 in e..e+t1 t/* t-pes *. 2ariati*ns0 'irst1 there are 2ariati*ns pr*p*se, 3- the
+*ntra+t*r .*r a 2ariet- *. reas*ns in+lu,es gr*un, +*n,iti*ns1 pr*gramming *r +*st
sa2ing0 #hese ma- 3e 2ariati*ns .r*m ,esigns t* /hi+h the sp*ns*r *r the in,epen,ent
+he+ker has raise, n* *3je+ti*n1 *r the- ma- 3e +hanges .r*m the1 appr*2e, ,esign
+riteria0 !*st +*ntra+ts permit 2ariati*ns *riginating .r*m the +*ntra+t*r pr*2i,e, that
the- ,* n*t ,epart .r*m the stan,ar, *r integrit- *. the *2erall Pr*je+t0 'urther1 the
+*ntra+t*r /*ul, 3e e6pe+te, t* 3ear the a,,iti*nal +*st *. su+h 2ariati*ns an, is entitle,
t* 3ene.it .r*m an- sa2ings ma,e0
7ith regar, t* C*ntra+t*r8s 2ariati*ns1 the %p*ns*r has a +*n+ern1 /hi+h is ,i..erent .r*m
that *. the +*ntra+t*r0 #he %p*ns*r ma- 3e l**king .*r high 4ualit- s* as t* ensure l*/
maintenan+e +*sts a.ter pra+ti+al *r su3stantial +*mpleti*n an, ,uring the running *.1 the
Pr*je+t0 #he C*ntra+t*r /ill n*t1 *ther than in respe+t *. an- e4uit- shareh*D,ing1 s*
intereste, in the +*st *. maintenan+e 3ut ma- /ell 3e l**king .*r an *2erall sa2ing *n the
+*st *. +*nstru+ti*n0 #hus1 a p*ssi3le s*luti*n is that ea+h time a +*ntra+t*r puts .*r/ar,
a 2ariati*nH it is re4uire, t* as+ertain that the 2ariati*n /ill n*t in+rease the re4uirements
.*r maintenan+e0 . +*urse this ten,s t* 3e a su3je+ti2e rather than a *3je+ti2e test1 3ut
81
ne2ertheless1 the min, *. the +*ntra+t*r ten,s t* 3e +*n+entrate, *n the risk /hi+h he
runs i. the materials *r +*nstru+ti*n meth*,s use,
re4uire a ,egree *. maintenan+e /hi+h /*ul, n*t ha2e1 3een re4uire, in respe+t *. the
/*rks *riginall- pr*p*se,0
#he se+*n, set *. 2ariati*ns is /here the sp*ns*r re4uires +hanges0 #hese are likel- t*
relate t* .uture *perating re4uirements an, there must 3e pr*2isi*n .*r su+h +hanges
pr*2i,e, .inan+e is a2aila3le an, su3je+t t* a2*i,ing an- +*n.li+t /ith the +*ntra+t*rs
*2erall *3ligati*ns in relati*n t* ,esign0
<0;0E #IDS1I$
a: $6tensi*ns *.8 time
#ime is m*ne-0 I. the +*ntra+t*r is 3eing pai, 3- the sp*ns*r thr*ugh ,ra/,*/n interest
starts t* run an, /ill +*ntinue t* run .r*m ,ra/,*/n0
#hus1 it is n*rmal t* e6pe+t that a B# +*nstru+ti*n +*ntra+t /ill=
%u3stantiall- restri+t the ri ght *. the +*ntra+t*r t* e6tensi*ns *. time0 %u3stantiall-
restri+t an- right t* pa-ment *. ,ela- +*sts t* the +*ntra+t*r
re4uire the
+*ntra+t*r .r*m the *utset t* pr*gramme the /*rks s* as t*
take int* a++*unt a num3er *. +*ntingen+ies0
A*/e2er1 in ,e+i,ing the gr*un,s up*n /hi+h an1 e6tensi*n *. time /ill 3e gi2en1 regar,
must 3e ha, t* a .air all*+ati*n *. risk an, t* /hether it is 3etter .*r the sp*ns*r t* ha2e
+*ntingen+- .un,s .*r a parti+ular risk0 97hi+h ma- n*t *++ur: *r .*r the +*ntra+t*r t*
in+lu,e that +*ntingen+- in his pri+e in /hi+h +ase the sp*ns*r pa-s .*r it /hether it
*++urs *r n*t0
3: )ate C*mpleti*n - Damages
82
"ssuming that there is a ,ela- in +*mpleti*n .*r /hi+h the C*ntra+t*r is n*t entitle, t* an
e6tensi*n *. time it is then ne+essar- t* +*nsi,er /hat ,amages sh*ul, 3e pai, 3- the
+*ntra+t*r0 Depen,ing up*n the parties in2*l2e,1 there are a 2ariet- *. *pti*ns=
i0 that the limit *. the lia3ilit- *. the +*ntra+t*r in respe+t *. ,ela-s is the am*unt *. the
li4ui,ate, ,amages /hi+h is a sum less than the am*unt re4uire, t* ser2i+e the ,e3t ,ue
t* the .un,ing instituti*nsH
ii0 that there are n* li4ui,ate, ,amages an, the +*ntra+t*r remains lia3le .*r all l*sses
/hi+h .l*/ 9this is unlikel- t* 3e a++epta3le t* the +*ntra+t*r:H
iii0 the C*ntra+t*r agrees t* pa- li4ui,ate, ,amages an,1 3- /a- *. separate agreement1
agrees t* ser2i+e the ,e3t ,uring the peri*, *. ,ela- 9this ,epen,s up*n the e4uit-
p*siti*n *. the C*ntra+t*r:0
+: $arl- C*mpleti*n
"ssuming that the +*ntra+t*r has t* pa- su3stantial li4ui,ate, ,amages in the e2ent *.
,ela-1 he ma- /ell +*nsi,er himsel. entitle, t* 3*nuses in the e2ent that the pr*je+t
3e+*mes1 re2enue earning earlier than 1*riginall- anti+ipate,0 n m*st pr*je+ts1 this is
+*nsi,ere, appr*priate1 alth*ugh +learl- a pr*2isi*n has t* 3e in+*rp*rate, /here3- i. the
+*ntra+t*r is pre2ente, .r*m re+*2ering the 3*nus 3- reas*n *. ,ela- 3- the sp*ns*r1 then
this ,*es n*t +reate an a,,iti*nal lia3ilit- up*n the sp*ns*r 9parti+ularl- 3earing in min,
that he ma- ha2e n* .un,s /ith /hi+h t* pa- this at the time that +*mpleti*n is a+hie2e,:0
#he 3*nus is n*rmall- pai, *ut *. S the earl- re2enue .r*m the Pr*je+t0
<0;0> Insuran+e
#he /h*le 4uesti*n *. e6+essesH ,e,u+ti3les an, uninsure, risk .alls /ithin the general
+*mmer+ial neg*tiati*ns0 P*liti+al risk an, nu+lear risk *.ten .all up*n the %p*ns*r an,
in,ee, in the ultimate anal-sis1 /ith a limite, re+*urse .inan+e, pr*je+t1 /ill .all up*n the
'un,ing Instituti*ns0 #he- ma-*r ma- n*t insure against p*liti+al risk ,epen,ing up*n
their 2ie/ *. the g*2ernment +*n+erne,0 n the Channel #unnel1 .*r instan+e1 i. *ne
g*2ernment ,e+i,es t* en, the pr*je+t1 then there are pr*2isi*ns *. re+*mpense t* 3e
0pai, t* the %p*ns*rs1 /hi+h /*ul, ena3le the C*ntra+t*r t* 3e Pai,0 It ma- 3e
appr*priate .*r p*liti+al risk insuran+e t* 3e +*nsi,ere,0
%* .ar as C*ntra+t*r8s "ll Risk an, #hir, Part- lia3ilit- Insuran+e is +*n+erne, 9i0e0
insuran+e *. the 7*rks ,uring the peri*, *. +*nstru+ti*n an, insuran+e against lia3i lities
*/e, t* thir, parties: again1 pr*per a,2i+e sh*ul, 3e taken0 #he ten,en+- is .*r the
83
%p*ns*r t* e..e+t the insuran+e1 3ut *n s*me pr*je+ts it is the C*ntra+t*rs /h* in the .inal
anal-sis are a3le t* *3tain 3etter premium rates than the %p*ns*r an,1 there.*re1 the C"R
an, #hir, Part- )ia3ilit- Insuran+e sh*ul, 3e taken *ut 3- the C*ntra+t*rs0
"gain1 this emphasises the nee, t* resear+h1 t* neg*tiate an, t* i,enti.- /hat is in the
3est interests *. 3*th parties0 $6+esses 9,e,u+ti3les: an, limitati*ns *. lia3ilit- are als*
matters1 /hi+h nee, t* 3e e2aluate, 3et/een the parties0
<0;05 C*mpleti*n - Per.*rman+e #esting an, C*mmissi*ning
"ssuming that the take*ut .inan+iers are t* 3e pai, *ut *. re2enue generate, 3- the
Pr*je+t1 this is1 perhaps1 the m*st +riti+al area0 7here the +*mplete, /*rks ,* n*t meet
the %pe+i.i+ati*n1 there ma- 3e pr*2isi*ns .*r a re,u+ti*n in pri+e .*r ea+h per+entage
p*int 3- /hi+h the %pe+i.i+ati*n is n*t a+hie2e,0
t=HHH808TL 0PP0000 I PP l3LUU0U un0aLLIVH 1 0P000 LL8111LLLS1001 PPPPPP TT PP T0
(e2ertheless there /ill +*me time /hen the /h*le .inan+ial 3asis *. the1 pr*je+t is put at
risk i.1 .*r instan+e1 there is unrelia3ilit- in the plant /hi+h is part *. the /*rks *r
alternati2el-1 su+h plant ,*es n*t a+hie2e a +apa+it- /hi+h /*ul, ena3le a +*mmer+ial
3reakthr*ugh t* 3e ma,e0 "t this stage1 i0e0 /hen su+h plant is reje+te,1 it is unlikel- that
the .inan+iers /*ul, 3e prepare, t* a++ept a limit *. lia3ilit-0 #he %p*ns*r is unlikel- t*
3e a3le t* pa- an-thing t* the 'un,ing Instituti*ns1 as he /ill n*t ha2e the res*ur+es0
#hus1 the *nl- a2enue *. re+*urse a2aila3le in the e2ent *. su+h ,isaster /*ul, 3e against
the C*ntra+t*r0
<0;06 !aintenan+e an, !anu.a+turers8 7arranties
It is usual t* pr*2i,e .*r the +*ntra+t*r t* put right ,e.e+ts ,uring the ,e.e+ts lia3ilit-
peri*,0 (e2ertheless1 regar, sh*ul, 3e ha, as t* /hether a stan,ar, maintenan+e
pr*2isi*n is appr*priate .*r all t-pes *. pr*je+ts0 I. the +*ntra+t*r is g*ing t* maintain a
presen+e *n site1 then there ma- 3e great a,2antages in ha2ing it pri+e, at the *utset an,
3eing a3le t* take a,2antage *. that presen+e ,uring the maintenan+e peri*,0
(e2ertheless1 like alV these matters1 it ,epen,s up*n pri+ing ari, the respe+ti2e
a,2antages *. the parties0
#he length *. the rele2ant peri*, als* nee,s t* 3e +*nsi,ere,1 parti+ularl- /here a
me+hani+al an, ele+tri+al plant has t* 3e use, in ,i..erent +limati+ +*n,iti*ns1 e0g0 /inter
an, summer1 /et *r ,r-0
84
"s t* +*ntinuing *3ligati*ns1 the +*ntra+t*r ma- 3e re4uire, t* ha2e a0 lia3ilit- .*r latent
,e.e+ts ,uring the li.e *. the l*an0 "n*ther +*n+ept is that the +*ntra+t*r sh*ul, ha2e a
risk .*r latent ,e.aults *nl- ,uring the earl- stages i0e0 ,uring that peri*, /hen the
%p*ns*r /ill n*t ha2e su..i+ient time t* +reate *ut *. the re2enue a sinking .un, .*r maj*r
repairs0
(e2ertheless1 a +*ntra+t*r sh*ul, e6pe+t that in this t-pe *. pr*je+t1 he /ill 3e re4uire, t*
ha2e a greater lia3ilit- a.ter +*mpleti*n *. the ,e.e+ts lia3ilit- peri*, than it /*ul, e6pe+t
t* ha2e un,er a tra,iti*nal +*nstru+ti*n +*ntra+t0 #hese *3ligati*ns ma- 3e release,
/here the +*ntra+t*r is a3le t* pr*2i,e Ven,*r @uarantees .*r plant an, e4uipment
installe, *n the 7*rks /here th*se guarantees are either assigne, *r j ssue, in .a2*ur *.
the %p*ns*r0
<0;0< (*minati*n an, %pe+i.ie, Pr*,u+ts
#he +*n+ept *. n*minati*n ,*es n*t *++ur /ith a ,esign an, +*nstru+t +*ntra+t0
(e2ertheless1 the %p*ns*r ma- /ish1 .*r a 2ariet- *. reas*ns1 t* 3e a3le t* ,ire+t the
+*ntra+t*r t* *3tain +ertain plant *r e4uipment .r*m a parti+ular manu.a+turer0 #his +an
3e ,*ne either 3- the ,ra.ting *. the %pe+i.i+ati*n s* that there is n* alternate supplier
*ther than the *ne that the sp*ns*r has in min,1 *r alternati2el-1 3- in,i+ating t* the
+*ntra+t*r ,uring the ten,ering *r neg*tiati*n peri*, that a parti+ular pie+e *. e4uipment
is re4uire, .r*m1 a parti+ular supplier1 an, that the +*ntra+t*r is t* take the risk in that
respe+t0 #hus1 in the +ase *. a rail tunnel1 /hi+h has t* take tra..i+ .r*m an e6isting
s-stem1 it ma- /ell 3e ne+essar- .*r the signaling t* 3e i,enti+al t* that use, *n the
e6isting s-stem0 Pr*2i,ing the +*ntra+t*r is a/are *. the sp*ns*r8s re4uirements at the
*utset an, has an *pp*rtunit- t* pri+e .*r that risk1 *n m*st *++asi*ns1 the +*ntra+t*r ,*es
n*t ha2e a real pr*3lem unless its resear+h ,uring the neg*tiati*n peri*, in,i+ates that the
spe+i.ie, manu.a+turer1 is1 .*r *ne reas*n *r an*ther1 +*mmer+iall- unrelia3le0
<0;08 Pa-ments
#here are t/* aspe+ts t* the pa-ment pr*2isi*ns0 #here are pa-ments .*r th*se items1
/hi+h relate t* the *riginal /*rks an, then there are pa-ments .*r th*se items1 /hi+h
relate t* e6tras1 +laims an, the like0
85
%* .ar as the .*rmers are +*n+erne, appli+ati*ns ma- 3e ma,e .*r pa-men= 3- the
+*ntra+t*r0 7here the +*ntra+t*r is empl*-ing an in,epen,ent e6pert t* a,2ise it1 it ma-
3e +*nsi,ere, a++epta3le that the +erti.i+ates are +*untersigne, 3- that e6pert0 In su+h
+ir+umstan+es1 it is anti+ipate, that the e6pert /ill ha2e an internati*nal reputati*n *r 3e
s* /ell kn*/n t* the 'un,ing Instituti*ns that his integrit- is n*t in ,*u3t0 n *ther
*++asi*ns1 an in,epen,ent +he+king engineer ma- 2et the a++*unts an, then sign them
*...*r pa-ment0
#he se+*n, element relates t* the +laims .*r e6tras0 Aere it is rele2ant t* kn*/ /hat the
+*ntngen+ies are0 '*r instan+e1 the +*ntra+t*r ma- 3e prepare, t* re+ei2e1 e6tras 3- /a-
*. ,e.erre, ,e3t s* that it is pai, *ut *. re2enue earne, *n the pr*je+t a.ter pa-ing
*perating e6penses an, ,e3t ser2i+e0 #here ma- 3e a re4uirement that1 /here a lia3ilit-
arises un,er the +*nstru+ti*n +*ntra+t1 the shareh*l,ers *. the sp*ns*ring +*mpan- are
re4uire, t* put in m*re e4uit-0 "lternati2el-1 there ma- 3e stan,3- l*ans t* ,eal /ith
these t-pes *. +*ntingen+ies0 #he +*n+ern that m*st pe*ple ha2e /ith regar, t* stan,3-
l*ans is that the- 3e+*me e6tremel- attra+ti2e an, instea, *. stan,ing 3-1 the- are ,ra/n
,*/n up*n as a matter *. +*urse0
<0;0; #erminati*n
(*rmall-1 i. the %p*ns*r *r the +*ntra+t*r is threatening t* ,etermine the +*nstru+ti*n
+*ntra+t1 the .un,ing Instituti*ns /ill /ish t* 3e in.*rme,0 #his then gi2es an *pp*rtunit-
.*r the .un,ing Instituti*ns 9al3eit in a n*n-+*ntra+tual p*siti*n: t* see /hether there
are 0an- steps /hi+h +an 3e taken t* a2*i, /hat is likel- t* 3e an int*lera3le ,ela- /hilst
a ne/ +*ntra+t*r is .*un, an, s*metimes1 /here the +*ntra+t*r is n*t in ,e.ault1 t*
persua,e the +*ntra+t*r t* +*ntinue /*rk rather than all*/ the /h*le pr*je+t t* +*llapse0
<010 'IDIC C(DI#I(% ' C(#R"C# <01001 Intr*,u+ti*n
#he gr*/th an, ,e2el*pment *. internati*nal +*nstru+ti*n 3usiness ga2e rise t* the
,e2el*pment *. stan,ar, +*n,iti*ns *. +*ntra+t 3- 'IDIC0 #his +hapter is an a3stra+t *.
the 'IDIC +*n,iti*ns *. C*ntra+t .*r +*nstru+ti*n .*r 3uil,ing an, engineering /*rks0
'IDIC8s C*n,iti*ns *. C*ntra+t .*r C*nstru+ti*n in+lu,e empl*-er8s rights1 engineer8s
,uties an, auth*rities1 +*ntra+t*r8s *3ligati*ns1 su3+*ntra+t*rs1 sa.et- pr*+e,ures1 4ualit-
assuran+e1 pr*gress rep*rts1 *perati*ns *n site1 n*minate, su3+*ntra+t*rs1 sta.. an,
la3*ur1 plant1 materials an, /*rkmanship1 +*mmen+ement1 ,ela-s an, suspensi*n *.
/*rk0 It als* ,eals /ith tests *n +*mpleti*n1 ,e.e+ts lia3ilit-1 measurement an,
e2aluati*n *. /*rks1 meth*, *. e2aluati*n1 2ariati*ns an, a,justments1 2alue engineering1
86
+*ntra+t pri+e an, pa-ment1 risk an, resp*nsi3ilit-1 insuran+e1 .*r+e majeure1 +laims1
,isputes an, ar3itrati*n1 et+0
#he .e,erati*n Internati*nale ,es Ingenieurs-C*nseils 9'IDIC: is the internati*nal
.e,erati*n *. +*nsulting engineers0 'IDIC is 3est kn*/n as the *rganisati*n that
pu3lishes stan,ar, .*rms *. +*ntra+t ,*+uments relate, t* the pr*+urement *.
engineeringT/*rks0 #hese stan,ar, .*rms in+lu,e th*se .*r use 3- +*nsulting engineers
an, *ther .*rms that are suita3le .*r the pr*+urement *. 3uil,ing an, engineering /*rks0
'IDIC8s pre2i*us stan,ar, .*rms *. +*ntra+t ,*+uments .*r 3uil,ing an, engineering
/*rks ha2e 3een kn*/n 3- the +*l*urs *. their respe+ti2e +*2ers=
K C*n,iti*ns *. C*ntra+t .*r 7*rks *. Ci2il $ngineering C*nstru+ti*n1 '*urth $,iti*n
1;8<1 Reprinte, 1;;21 als* kn*/n as the LRe, B**kLH
K C*n,iti*ns *. C*ntra+t .*r $le+tri+al an, !e+hani+al 7*rks1
#hir, $,iti*n 1;8< I Reprinte, 1;881 als* kn*/n as the L&ell*/ B**kLH
K C*n,iti*ns *. C*ntra+t .*r Design-Buil, an, #urnke-1 .irst $,iti*n 1;;51 als* kn*/n
as the Lrange B**kL0
<01002 #he (e/ %uite
"lth*ugh the a3*2e stan,ar, .*rms are still /i,el- use, internati*nall-1 'IDIC has
repla+e, them 3- the .*ll*/ing 'irst $,iti*ns1 pu3lishe, in %eptem3er 1;;;=
K C*n,iti*ns *. C*ntra+t .*r C*nstru+ti*n1 /hi+h 'IDIC re+*mmen,s .*r 3uil,ing *r
engineering /*rks /here the empl*-er pr*2i,es m*st *. the ,esign0 A*/e2er1 the
/*rksTin+lu,e s*me +*ntra+t*r ,esigne, +i2il0 me+hani+al1 ele+tri+al an,J*r +*nstru+ti*n
/*rks0
K C*n,iti*ns *. C*ntra+t .*r Plant an, Design-Buil,1 /hi+h 'IDIC re+*mmen,s .*r the
pr*2isi*n *. ele+tri+al an,J*r me+hani+al plant1Tan, .*r the ,esign an, Q6e+ute *.
3uil,ing *r engineering /*rks0 #he s+*pe *. these +*n,iti*ns0 #hus em3ra+es 3*th *l,
&ell*/ an, range B**ks1 .*r all t-pes *. +*ntra+t*r-,esigne, /*rks0
K C*n,iti*ns *. C*ntra+t .*r $PCl#urnke- Pr*je+ts1 /hi+h ma- 3e suita3le .*r the
pr*2isi*n *n a turnke- 3asis *. a pr*+ess *r p*/er plant1 *. a .a+t*r- *r similar .a+ilit-1
*r *. an in.rastru+ture pr*je+t *r *ther t-pe *. ,e2el*pment1 /here Wi: high ,egree *.
+ertaint- *. .inal pri+e an, +*mpleti*n time is re4uire,1 an, 9ii: the +*ntra+t*r takes t*tal
resp*nsi3ilit- .*r the ,esign an, e6e+uti*n *. the pr*je+t0
87
<0100E Imp*rtant C*n,iti*ns . C*ntra+t 'r*m 'i,i+
#he '*urth $,iti*n *. the 'IDIC C*n,iti*ns *. C*ntra+t .*r 7*rks *. Ci2il $ngineering
C*nstru+ti*n1 kn*/n as the LRe, B**kL1 has 3een up,ate, an, repla+e, /ith a ne/
stan,ar, .*rm0 #he title *. the ne/ 1;;; 'irst $,iti*n +*nstru+ti*n 3**k /hi+h is re, in
+*l*ur is LC*n,iti*ns *. C*ntra+t .*r C*nstru+ti*n .*r Buil,ing an, $ngineering 7*rks
Designe, 3- the $mpl*-erL 9L(e/ Re, B**kL:0 "n a3stra+t *. the (e/ Re, B**k is
presente, 3el*/0
a: De.e+ts )ia3ilit-
"n- /*rk 3- +*ntra+t*r /ithin De.e+ts (*ti.i+ati*n Peri*, as p*inte, *ut 3- $mpl*-er1
/ell /ithin +*ntra+t re4uirement is t* he +arrie, at the risk an, +*st *. the +*ntra+t*r0 #he
$mpl*-er +an seek e6tensi*nT*. De.e+ts (*ti.i+ati*n Peri*, i. a maj*r item *.
plant+ann*t 3e use, .*r purp*ses .*r /hi+h the- are inten,e,1 3ut n*t e6+ee,ing #/*
-ears in e6tensi*n0 I. a3+2e reme,- is n*t +arrie, *ut1 the $mpl*-er +an +arr- *ut the
/*rk himsel. *r 3- *thers at +*ntra+t*r8s +*st1 3ut the +*ntra+t*r shall ha2e n*
resp*nsi3ilit- .*r this /*rk0 I. $mpl*-er agrees1 the ,e.e+ti2e material +an 3e rem*2e,
.*r the site .*r repairs0 #he +*ntra+t*r +an 3e aske, 3- the $ngineer t* sear+h .*r the
+ause *. an- ,e.e+t0 #he +*st plus pr*.it shall 3e pai, t* the +*ntra+t*r unless the +ause
n*ti+e, is ,ue t* ,e.e+ti2e /*rkmanship *. +*ntra+t*r0 C*ntra+t*r8s *3ligati*ns are n*t
+*mplete until $ngineer issue, Per.*rman+e +erti.i+ate /ith 28 ,a-s *. e6pir- ,ate *.
De.e+ts (*ti.i+ati*n Peri*,0 nl- the per.*rman+e +erti.i+ate +*nstitutes a++eptan+e *.
the /*rk0 B*th parties are lia3le .*r an- unper.*rme, *3ligati*n C +*ntra+t remains in
.*r+e t* that e6tent0
1_ !easurement an, $2aluati*n
$2aluati*n *. /*rk shall 3e +arrie, *ut 3- ne/ rate *ther than agree, in the BF i. the
4uantit- is in+rease, 3- m*re than 10 an, 2alue 3- m*re than 0001 *. a++epte, +*ntra+t
am*unt pr*2i,e, the rate re2isi*n s*ught 3- +*ntra+t*r e6+ee, I *. the +*stper unit
4uantit- as per rate s+he,ule0
+: Variati*n an, ",justment
Variati*n *. /*rk +an 3e initiate, 3- the $ngineer at an- time upt* taking *2er stage0
C*ntra+t*r is re4uire, t* e6e+ute ea+h 2ariati*n unless +*ntra+t*r /rites t* $ngineer
a3*ut his ina3ilit- t* per.*rm0 C*ntra+t*r ma- pr*p*se impr*2ement *r +hanges i.
3ene.i+ial t* $mpl*-er ,ue t* l*/er 2alue *r 3etter per.*rman+e0 #he re,u+ti*n in
88
+*st t* +*ntra+t pri+e ,ue t* a3*2e +hange shall 3e share, 3et/een $mpl*-er C the
+*ntra+t a.ter a,justing .*r l*ss i. an- in 4ualit-1 li.e an, *perati*nal per.*rman+e0 #he
pr*2isi*nal suma2aila3le in the +*ntra+t pri+e shall 3e use, as per $ngineer8s instru+ti*ns1
a.ter *3taining 4u*tati*ns1 in2*i+es1 2*u+hers an, re+eipts in su3stantiati*n0 #he +*ntra+t
pri+e is a,juste, .*r an- in+rease *r ,e+rease in +*st resulting .r*m a +hange in the )a/s
*. the C*untr- ma,e a.ter the Base Date in the +*ntra+t0 $s+alati*n +lause applies *nl- i.
pr*2i,e, .*r in the +*ntra+t0 %u+h +lause ma-*r ma- n*t 3e su..i+ient .*r +*mpensati*n
,ue t* rise in +*sts1 /hi+h ha2e g*ne up +*mpare, t* 8Base Date8 ,ata0 I. +*ntra+t*r .ails
t* +*mplete /*rks /ithin time .*r +*mpleti*n a,justment *. pri+e /ill 3e linke, t* ,ate
>;,a-s pri*r t* Date *. C*mpleti*n *r +urrent pri+es /hi+he2er m*re .a2*ra3le t*
$mpl*-er un,er $s+alati*n +lause0
,: C*ntra+t Pri+e an, Pa-ment
"n- 4uantities as per BF are estimate, 4uantities an, are n*t 3eing taken as the a+tual
C +*rre+t 4uantities0 #he $mpl*-er shall make an a,2an+e pa-ment as interest .ree l*an
.*r m*3ilisati*n0 7hen +*ntra+t*r su3mits0 ",2an+e pa-ment guarantee1 /hen su+h a
pr*2isi*n *. a,2an+e pa-ment is ma,e in the "ppen,i6 t* #en,er0 I. +*ntra+t in+lu,es
s+he,ule *. pa-ment1 it shall in+lu,e an am*unt .*r plant C !aterials1 /hi+h ha2e 3een
sent te* the site .*r in+*rp*rati*n in the permanent /*rks0 I. +*ntra+t ,*es n*t in+lu,es
s+he,ule *. pa-ments1 +*ntra+t*r t* su3mit n*n-3in,ing estimate *. pa-ment ,uring ea+h
4uarterl- peri*,s1 starting .r*mT>2 ,a-s a.ter the +*mmen+ement ,ate0 #he $ngineer
ma- make an- +*rre+ti*n i. ne+essar- t* an- pre2i*us pa-ment +erti.i+atesin+e pa-ment
+erti.i+ate shall n*t 3e ,eeme, t* In,i+ate $ngineer8s a++eptan+e *. /*rk0 I. +*ntra+t*r
,*es n*t re+ei2e-pa-ments /ithin 56 ,a-s *. su3missi*n t* $ngineer /ith ne+essar-
supp*rting ,*+ument1 he shall 3e entitle, t* re+ei2e .inan+ing +hargesT+*mp*un,e,
m*nthl- *n the am*unt unpai,0 'inan+ing +harges .*r ,ela-e, pa-ments is E a3*2e
+entral 3ank8s ,is+*unt rate0
e: #erminati*n 3- $mpl*-er
$mpl*-er +an terminate +*ntra+t *n man- gr*un,s su+h as .ailure t* +arr- *ut the
+*ntra+t1 su3+*ntra+ting the /h*le *. /*rks *r assign the +*ntra+t /ith*ut agreement0
#he 3ri3ing .*r un,ue .a2*ur +an 3e the 3asis .*r #erminati*n0 $2en $mpl*-er +an
89
terminate the +*ntra+t /ith 28 ,a-s n*ti+e /ith*ut an- reas*n 3ut n*t .*r e6e+uting the
/*rk himsel. *r t* app*int an*ther +*ntra+t*r0
.: %uspensi*n C #erminati*n 3- C*ntra+t*r
C*ntra+t*r is all*/e, t* terminate the +*ntra+t i. +*ntra+t*r is n*t pr*2i,e, /ith i0
$mpl*-er8s .inan+ial arrangement
ii0 )a+k *. interim pa-ment /hen ,ue
iii0 Pr*l*nge, suspensi*n *. /*rk 3- $mpl*-er
i20 Bankrupt+- *r ins*l2ent $mpl*-er
20 %u3stantial .ailure *. $mpl*-er t* per.*rm his *3ligati*n un,er +*ntra+t
g: Risk C Resp*nsi3ilit-
#he +*ntra+t*r in,emni.ies an, h*l,s harmless the $mpl*-er *n .*ll*/ing issues
a: Injur-1 Disease *r Death ,ue t* +*ntra+t*r8s e6e+uti*n *. /*rk
9in+lu,ing ,esign i. an-: *r ,uring reme,-0 *. ,e.e+ts in /*rks *..er +*mpleti*n0
3: Damages *r )*sses t* pr*pert- arising *ut *. e6e+uti*n *. /*rk 9in+lu,ing ,esign i.
an-: *r attri3uta3le t* negligen+e1 /ill.ul a+t *r 3rea+h *. the +*ntra+t 3- the +*ntra+t*r0
#he $mpl*-er t* in,emni.- an,0 h*l, harmless the +*ntra+t*r .*r similar a+ti*ns +arrie,
*ut 3- $mpl*-er8s pers*nnel ,uring e6e+uti*n *r a.ter +*mpleti*n ,uring reme,ial /*rk0
#he +*ntra+t*r takes .ull resp*nsi3ilit- .*r the +are *. the /*rks .r*m +*mmen+ement
,ate till taking *2er 3- +lient1 a.ter /hi+h the resp*nsi3ilit- passes t* the $mpl*-er0 In
+ase *. l*ss *r ,amage ,uring +are *. the /*rks .r*m +*mmen+ement ,ate till taking *2er
3- +lient1 a.ter /hi+h the resp*nsi3ilit- *n +*ntra+t*r +*ntinues e2en a.ter Aan, *2er t*
$mpl*-er1 i. s*me 3alan+e /*rk is still 3eing +arrie,0
$mpl*-er is re4uire, t* meet the risks arising *ut
L1 7ar1 A*stilities C in2asi*n
L1 Re3elli*n1 #err*rism C +i2il /ar0
L1 Ri*t1 C*mm*ti*n *r ,is*r,er 9pr*2i,e, it is n*t +ause, 3- +*ntra+t*r8s
90
pers*nnel:
L1 $6pl*si2es1 i*ni5ing ra,iati*n *r +*ntaminati*n 3- ra,i*a+ti2it- e6+ept .*r
th*se +ause, ,ue t* use *. su+h material 3- +*ntra+t*r1 .*r +*nstru+ti*n purp*ses0
L1 Pressure /a2es +ause, 3- air+ra.t +ause, 3- s*ni+ *r supers*ni+ spee,s0
L1 Design *. an- part *. /*rks 3- the $mpl*-er0
L1 '*r+es *. (ature1 /hi+h an e6perien+e, +*ntra+t*r +*ul, n*t ha2e
.*reseen0
C*ntra+t*r is e6pe+te, t* make g**, l*ss *r ,amage +ause, 3- a3*2e issues1 3ut /ill 3e
reim3urse, .*r the same al*ng /ith time e6tensi*n .*r ,ela-s0 #he $mpl*-er shall
in,emni.- C*ntra+t*r .r*m an- +laim arising *ut +*mplian+e *. the +*ntra+t +*n,iti*ns *r
/*rks 3eing use, .*r the $mpl*-er0 %imilarl- C*ntra+t*r shall in,emni.- $mpl*-er .*r
an- +laim arising *ut ,esign *r suppl- *. g**,s ma,e un,er
the s+*pe *. the +*ntra+t0 #he t*tal lia3ilit- *. the C*ntra+t*r un,er a3*2e issues shall n*t
e6+ee, the 2alue *. +*ntra+t e6+ept .*r in +ase *. .rau,1 mis+*n,u+t C ,e.ault0
h: Insuran+e
#he terms *. Insuran+e t* 3e e..e+te, 3- an- insuring part- shall 3e +*nsistent /ith an-
terms agree, 3- 3*th parties 3e.*re the ,ate *. )etter *. "++eptan+e0 #his t-pe *.
agreement shall take pre+e,en+e *2er the pr*2isi*ns *. this +lause0 #he rele2ant insuri ng
part- shall /ithin the respe+ti2e peri*,s state, in #en,er %u3mit t* *ther part- e2i,en+e
*. insuran+e 3eing e..e+te, al*ng /ith ,etails *. premium0 (either part- shall +hange
terms *. insuran+e /ith*ut appr*2al *. *ther part-0 "ls* pa-ment n*t ma,e 3- *ne part-
,espite 3eing ,ue1 +an 3e ma,e 3- *ther part- an, a,juste, in +*ntra+t 2alue *r a,juste,
against pa-ment ,ue0 "n- insuran+e Claim1 uninsure, *3ligati*n1 n*t re+ei2e, .ull- .r*m
Insuran+e shall 3e 3*rne 3- the part-1 /hi+h is resp*nsi3le .*r these issues as per
+*ntra+t0 Pa-ment 3- *ne part- t* the *ther part- shall 3e su3je+te, t* $mpl*-er8s +laim8
*r 8+*ntra+t*r8s +laim8 as appli+a3le0
Insuran+e .*r /*rks C C*ntra+t*r8s e4uipment shall 3e a..e+te, 3- the +*ntra+t*r1 as
insuring part- in the j*int name .*r the .ull 2alue *. +*st *. repla+ement0 #he pa-ment
shall 3e j*intl- re+ei2e, C all*+ate, 3et/een the parties .*r the s*le purp*se i. re+ti.-ing
the l*ss *r ,amage0 %u+h insuran+e e6+lu,es l*sses ,ue t* ,e.e+ts in ,esign1 materials an,
91
/*rkmanship0 %u+h insuran+e +*2er e6+lu,es part *. /*rk taken *2er 3- the $mpl*-er0 I.
*ne -ear a.ter the Base ,a=e the insuran+e +*2er is n*t a2aila3le at +*mmer+iall-
reas*na3le terms0 #he +*ntra+t*r shall gi2e the n*ti+e t* the $mpl*-er /ith supp*rting
parti+ulars0 #he +*ntra+t*r shall als* insure against injur- t* pers*ns C ,amage t*
$mpl*-er8s pr*pert- arising Dt *. +*ntra+t*r is per.*rman+e *. the +*ntra+t *ther than
alrea,- +*2ere, un,er Insuran+e *. 7*rks C C*ntra+t*r8s $4uipment *r pers*nnel "s
state, earlier1 the insuran+e /ill 3e in j*int name *. 3*th the parties0 %imilar t* 7*rks C
C*ntra+t*r8s e4uipment1 +*ntra+t*r8s pers*nnel shall 3e insure, 3- +*ntra+t*r .*r injur-1
si+kness1 ,isease *r ,eath0 #he insuran+e shall 3e
11111111111111111111111111111111111111111111111111111111111111111111111
111111111
maintaine, in .ull .*r+e in e..e+t thr*ugh *ut the e6e+uti*n *. /*rks0 '*r su3+*ntra+t*r8s
empl*-ees su3+*ntra+t*r ma- ,ra/ insuran+e1 3ut +*ntra+t*r shall 3e resp*nsi3le .*r the
+*mplian+e 3- the su3+*ntra+t*r0
i: '*r+e !ajeure
'*r+e !ajeure is an e6+epti*nal e2ent *r +ir+umstan+e1 /hi+h +*n+erne, part- +*ul, n*t
ha2e pr*2i,e, against C e2en +*ul, n*t ha2e a2*i,e, ha2ing arisen in the gi2en
+ir+umstan+e0T'*r+e !ajeure in+lu,es /ar1 h*stilities *r in2asi*n1 re3elli*n1 terr*rism *r
+i2il /ar0 It als* +*2ers ri*ts +*mm*ti*n1 ,is*r,er *r strike C l*+k*ut *ther than th*se 3-
+*ntra+t*r *r su3+*ntra+t*r8s pers*nnel0 It in+lu,es issues su+h as e6pl*si2es1 i*nising
ra,iati*n *r +*ntaminati*n 3- ra,i*a+ti2it- e6+ept th*se spe+i.i+all- utilise, 3- +*ntra+t*r
.*r +*nstru+ti*n0 It ,*es +*2er natural +atastr*phes1 su+h as earth4uake1 hurri+ane1
t-ph**n *r 2*l+ani+ a+ti2it-0
I. a part- is pre2ente, .r*m per.*rming an- *. its *3ligati*ns1 a n*ti+e shall 3e gi2en
/ithin 1> ,a-s *. the e2ent +*nstituting '*r+e !ajeure0 #he part- shall 3e e6+use, .r*m
per.*rman+e *. its *3ligati*ns as l*ng as '*r+e !ajeure persists e6+ept .*r *3ligati*n *.
the part^ t* make pa-ments i. ,ue0 I. +*ntra+t*r su..ers ,ela-s C +*sts ,ue t* '*r+e
!ajeure 3e shall 3e +*mpensate, 3- ne+essar- time e6tensi*n C +*st - +*mpensati*n0 I.
'*r+e !ajeure +lauses .*r su3+*ntra+t*r are 3r*a,erJ/i,er than +*ntra+t*r8s pr*je+ti*ns
un,er this +lause1 then th*se issues +ann*t 3e the e6+use *. +*ntra+t*r .*r n*n-
per.*rman+e *r 3asis .*r relie. un,er the +lause0
I. a single '*r+e !ajeure e2ent persists .*r 8> ,a-s *r +umulati2el- .*r 1>0 ,a-s ,ue t*
multiple *++asi*ns1 then either part- ma- gi2e n*ti+e t* the *ther part- a n*ti+e *. < ,a-s
92
.*r terminati*n *. +*ntra+t0 In su+h situati*n .urther pr*+ess *. ,etermining the 2alue
*.T/*rk ,*ne shall +*mmen+e an, /ill in+lu,e=
\- Value *. +*mplete, item *. /*rk .*r /hi+h pri+e is state, in the +*ntra+t0
\- C*st *. Plant C !aterial ,eli2ere, *r /hi+h has le.t 2en,*rs .*r ,eli2er-0
\- "n- *ther +*stJlia3ilit- reas*na3l- in+urre, 3- the +*ntra+t*r .*r
+*mpleting the /*rks0
\- C*st *. rem*2al *. #emp*rar- 7*rks C +*ntra+t*r8s $4uipment0
\- C*st *. repatriati*n *. the +*ntra+t*r8s sta.. C la3*ur empl*-e, /h*ll- in
+*nne+ti*n /ith the /*rk0
(*t /ithstan,ing a3*2e i. an- e2ent *utsi,e the +*ntr*l *. parties arises1 /hi+h makes i.
imp*ssi3le *r unla/.ul .*r either part- t* .ul.ill its +*ntra+t *3ligati*ns parties are
entitle, t* 3e release, .r*m .urther per.*rman+e *. the +*ntra+t0 !*ne- pa-a3le t* the
+*ntra+t*r 3- empl*-er shall 3e same as state, a3*2e 0
0 11 ($7 PRVI%I(% !"D$ B& #A$ ($7 R$D BK 'R C(%#RUC#I(
<01101 Pr*2isi*ns Relate, t* the C*ntra+t*r
i0 #he empl*-er is re4uire, t* su3mit1 /ithin 28 ,a-s a.ter re+ei2ing an- re4uest .r*m the
+*ntra+t*r1 reas*na3le e2i,en+e that .inan+ial arrangements ha2e 3een ma,e an, are
3eing maintaine,8 /hi+h /ill ena3le the empl*-er t* the +*ntra+t pri+e in a++*r,an+e /ith
the +*ntra+t0 I. the empl*-er inten,s t* make an- material +hange t* his .inan+ial
arrangements1 he is re4uire, t* gi2e n*ti+e t* the +*ntra+t*r /ith ,etaile, parti+ulars
9%u3-Clause 20> - $mpl*-er8s 'inan+ial "rrangements:0
ii0 I. the empl*-er +*nsi,ers himsel. t* 3e entitle, t* an- pa-ment un,er *r in +*nne+ti*n
/ith the +*ntra+t1 an,J*r an- e6tensi*n *. the De.e+ts (*ti.i+ati*n peri*, 9the ne/ name
.*r the De.e+ts )ia3ilit- Peri*,:1 the empl*-er *r the engineer must gi2e 8n*ti+e an,
parti+ulars8 t* the +*ntra+t*r0 #he parti+ulars must spe+i.- the +lause *r *ther 3asis *. the
+laim 000 an,000 in+lu,e su3stantiati*n *. the am*unt an,J*r
93
e6tensi*n t* /hi+h the $mpl*-er +*nsi,ers himsel. t* 3e entitle,0 #he n*ti+e must 3e
gi2en as s**n as pra+ti+a3le a.ter the empl*-er is e6pressl- ,enie, the right t* set *..
against *r make an- ,e,u+ti*n .r*m a +erti.ie, am*unt *r *ther/ise +laim against the
+*ntra+t*r1 e6+ept in a++*r,an+e /ith this pr*2isi*n 9%u3-Cause 205 - $mpl*-er8s +laims:0
iii0 #he empl*-ers in e6pressl- entitle, t* e6ten, the De.e+ts (*ti.i+ati*n Peri*, .*r the
/*rks *r a se+ti*n *. the /*rks .*r up t* t/* -ears i. it +ann*t 3e use, .*r the purp*ses
.*r /hi+h it /as inten,e, 3- reas*n *. a ,e.e+t *r ,amage 9%u3-Clause I 10E - $6tensi*n
*. ,e.e+ts (*ti.i+ati*n peri*,:0
i20 #he C*ntra+t*r right t* a,justment *. the +*ntra+t pri+e t* take a++*unt *. an-
in+rease *r ,e+rease in +*st 9as ,e.ine,: resulting .r*m a +hange in la/ in the +*untr-
/here the site is l*+ate, has 3een e6ten,e, 93e-*n, +hanges in legislati*n1 as in e0g0 the
*range 3**k: t* in+lu,e +hange, in the ju,i+ial *r *..i+ial g*2ernmental interpretati*n *.
la/s ma,e a.ter the 3ase ,ate 9as ,e.ine,: /hi+h e..e+t the +*ntra+t*r in the per.*rman+e
*. his *3ligati*ns 9su3-+lause 1E0< -",justment1 .*r Changes in )egislati*n0:
20 I. the +*ntra+t*r is n*t pai, *n time1 the +*ntra+t*r is entitle, t* re+ei2e .inan+ing
+harges +*mp*un,e, m*nthl- *n the am*unt unpai, ,uring the peri*, *. ,ela-0 Unless
*ther/ise state, in the Parti+ular C*n,iti*ns1 these .inan+ing +harges are t* 3e +al+ulate,
at the annual 8rate *. three per+entage p*ints a3*2e the ,is+*unt rate *. the +entral 3ank in
the +*untr- *. the +urren+- *. pa-ment an, sh*ul, 3e pai, in su+h +urren+- 9%u3-Clause
1>08 - ,ela-e, pa-ment:0 #he a3*2e pr*2isi*n is ,eri2e, .r*m the range B**k0 7hile
the *l, Re, B**k pr*2i,e, that the +*ntra+t*r /as entitle, t* interest *n late pa-ments1 it
,i, n*t spe+i.- h*/ this /as t* 3e +al+ulate,0
2i0 #he +*ntra+t*r is n*/ entitle,1 a.ter gi2ing n*ti+e1 t* suspen, *r re,u+e the rate *.
/*rk /here the engineer .ails t* +erti.- an interim pa-ment1 +erti.i+ate *r the
empl*-er .ails t* pr*2i,e in.*rmati*n a3*ut the empl*-ers .inan+ial arrangements .*r
pa-ing the +*ntra+t Pri+e 9see p*int 91: a3*2e: 9%u3-Clause 160I-C*ntra+t*rs $ntitlement
t* %uspen, 7*rk:0 Un,er the *l, Re, B**k 9%u3-Clause 6;0> - C*ntra+t*rs $ntitlement
t* %uspen, 7*rk:1 the +*ntra+t*r /as *nl- entitle, t* suspen, *r re,u+e the rate *r /*rk
/here the empl*-er /as n*t pa-ing an am*unt ,ue un,er an- +erti.i+ate0
2ii0 7ithin >2 ,a-s a.ter re+ei2ing a +laim *r an- .urther parti+ulars supp*rting a
pre2i*us +laim *. the +*ntra+t*r1 the engineer is n8(0 e6pressl- re4uire, t* resp*n, /ith
appr*2al1 *r /ith ,isappr*2al an, ,etaile, +*mments8 9%u3-Clauses 200: - C*ntra+t*rs
Claims: Un,er the *l, Re, B**k1 there /as n* e6press re4uirement that the engineer
94
resp*n, t* the merits *. the +*ntra+t*rs +laims at all1 e6+ept in the +ase *. a ,ispute
9Clause 6< - %ettlement *. Disputes:0
2iii0 Un,er the @eneral C*n,iti*ns *. the ne/ B**ks .*r maj*r /*rks1 ,isputes are n*/
re4uire, t* 3e su3mitte, t* a D"B .*r ,e+isi*n0 In the +ase *. the ne/ Re, an, &ell*/
B**ks1 the D"B must 3e app*inte, at the time the +*ntra+t is signe, an, remain in pla+e
until it is +*n+lu,e, 9un,er the @eneral C*n,iti*ns *. the %il2er B**k1 a D"B is
app*inte, .*r ea+h ,ispute an, *r,inaril- *nl- remains in *..i+e until that ,ispute is
,e+i,e,: 9Clause 20 - Claims1 Disputes an, "r3itrati*n:0 Un,er the *l, Re, an, &ell*/
B**ks1 ,isputes ha, t* 3e su3mitte, t* the engineer .*r a ,e+isi*n1 as a +*n,iti*n t*
ar3itrati*n0 #he pr*2isi*n .*r a Da3 t* repla+e the engineer .*r the settlement *. ,isputes
in the @eneral C*n,iti*ns ma- 3e the m*st .a2*ra3le *. the inn*2ati*ns in the ne/ 3**ks
.r*m the +*ntra+t*r8s p*int *. 2ie/0
<01102 Pr*2isi*ns Relate, t* the $mpl*-er
i0 #he empl*-er is n*/ entitle,1 *n 0n*t less than >2 ,a-s n*ti+e1 t* repla+e the engineer
pr*2i,e, that the empl*-er ma- 110t ,* s* /ith a pers*n against /h*m the +*ntra+t*r
raises reas*na3le *3je+ti*n 3- n*ti+e t* the empl*-er 9%u3-Clause E0> -
Repla+ement *. the $ngineers: I. the +*ntra+t spe+i.ies the +*ntra+t*r shall ,esign an-
part *. the permanent /*rks 9as ,e.ine,: then su+h part must1 /hen +*mplete,1 3e .it .*r
su+h purp*ses .*r /hi+h the part is inten,e, as are spe+i.ie, in the C*ntra+t 9%u3Clause
>01 9+: - C*ntra+t*rs @eneral 3ligati*ns:0 Un,er the *l, Re, B**k1 there /as n*
re4uirement that an- /*rks ,esigne, 3- the +*ntra+t*r 3e .it .*r purp*se0
ii0 7here the +*ntra+t*r makes a +laim .*r a,2erse 8Ph-si+al +*n,iti*ns8 9as ,e.ine,:1 the
engineer ma- re2ie/ /hether *ther ph-si+al +*n,iti*ns in similar parts *. the 7*rks 9i.
an-: /ere m*re .a2*ra3le than 0+*ul, reas*na3l- ha2e 3een .*reseen0 I. s*1 the engineer
ma- re,u+e the am*unt *. an- +*st 9as ,e.ine,: +laime, 3- the +*ntra+t*r .*r a,2erse
ph-si+al +*n,iti*ns 3- the am*unt *. the re,u+ti*n in +*st *. su+h m*re .a2*ra3le
+*n,iti*ns1 s* l*ng as the net e..e+t ,*es n*t result in a re,u+ti*n in the +*ntra+t pri+e
9%u3-Clause >012 - Un.*reseea3le Ph-si+al C*n,iti*ns:0
iii0 #he +*ntra+t*r is re4uire, t* su3mit ,etaile, m*nthl- pr*gress rep*rts t* the engineer1
in+lu,ing +harts an, ,etaile, ,es+ripti*ns *. pr*gress1 ph*t*graphs sh*/ing the status *.
manu.a+ture an,1 *. pr*gress *n the site1 ,etails regar,ing the manu.a+ture *. ea+h main
item *. plant an, materials1 re+*r,s *. the +*ntra+t*rs pers*nnel an, e4uipment as /ell as
*ther in.*rmati*n 9%u3-Clause >021 - Pr*gress Rep*rts:0 %u+h pr*gress rep*rts are
95
re4uire, t* a++*mpan- the +*ntra+t*rs appli+ati*ns .*r interim pa-ment +erti.i+ates:1
impl-ing that pa-ment ma- 3e +*n,iti*nal *n the re+eipt *. su+h rep*rts0
i20 #he empl*-er has the right a.ter n*ti+e t* the +*ntra+t*r1 t* terminate the +*ntra+t at
an- time .*r the empl*-er8s +*n2enien+e pr*2i,e, that the empl*-er ma- n*t ,* s* in
*r,er t* e6e+ute the /*rks himsel. *r t* arrange .*r them t* 3e e6e+ute, 3- an*ther
+*ntra+t*r0 In the +ase *. su+h terminati*n the +*ntra+t*r is pai, .*r /*rk ,*ne 3ut is
,epri2e, *. the right t* pr*.it *n the 3alan+e *. the +*ntra+t 9%u30 Clauses 1505 -
$mpl*-ers $ntitlement t* #erminati*n an, 1;06 pti*nal terminati*n1 pa-ment an,
release:0
#he +*ntra+t*r is re4uire, t* gi2e n*ti+e t* the engineer *. an- +laim .*r an e6tensi*n *.
time *r a,,iti*nal pa-ment n*t later than 28 ,a-s a.ter the +*ntra+t*r 3e+ame a/are1 *r
sh*ul, ha2e 3e+*me a/are1 *. the e2ent *r +ir+umstan+e8 gi2ing rise t* a +laim0 I. he .ails
t* ,* s*1 the empl*-er is state, t* 3e ,is+harge, .r*m all lia3ilit- in +*nne+ti*n /ith the
+laim0 In a,,iti*n1 the +*ntra+t*r is re4uire, t* sen, t* the engineer a .ull- ,etaile, +laim
/ithin >2 ,a-s a.ter the +*ntra+t*r 3e+ame a/are *r sh*ul, ha2e 3e+*me a/are *. the
e2ent *r +ir+umstan+es gi2ing rise t* the +laim 9unless the engineer appr*2es a l*nger
peri*,:0 I. the +*ntra+t*r sh*ul, .ai I t* +*mpl- /ith this latter re4uirement1 an-
e6tensi*n *. time an,J*r a,,iti*nal pa-ment must 3e a,juste, t* take a++*unt *. the
e6tent t* /hi+h the .ailure ma- ha2e0 pre2ente, *r preju,i+e, pr*per in2estigati*n *. the
+laim 9%u3-Clause 2001 - C*ntra+t*rs Claims:0
CA"P#$R 10
C(C)U%I(
=Q=je+t $6p*rts has helpe, In,ian +*mpanies an, @*2ernment . In,ia .*r earning
Qlali2el- m*re '*reign $6+hange1 3e+ause it8s 2*lume an, 2alue is huge +*mpare, t* eer
3usinesses0 In,ians are 3ene.ite, as the- inter.a+e /ith the latest te+hn*l*gies1 earns #*re
m*ne- there.*re li2ing stan,ar, impr*2es an, lea,s t* *2erall ,e2el*pment *. mple0
%u++ess *. the pr*je+t starts /ith su++ess.ul ten,ering an, 3i,,ing pr*+ess0 Qen,ering
an, 3i,,ing is the .irst step in ankin, *. +*nstru+ti*n +*ntra+ting0 #he stu,- Dnal-se,
the pe+uliarities *. internati*nal +*nstru+ti*n 3usiness an, e6amine, the =i..erent aspe+ts
*. ten,ing an, 3i,,ing internati*nal pr*je+ts0 #he stu,- is 3ase, *n Q*r*ughl- anal-sing
96
the /*r, 3ank ,*+ument1 "D% ,*+uments an, the gui,elines *n pr*je+t e6p*rts set 3-
Reser2e Bank *. In,ia0
=Vlaj*r pr*+e,ure .*r ,*ing internati*nal +*nstru+ti*n 3usinessH
K #he .irst step in the *2erseas +*nstru+ti*n 3usiness is taking mem3ership *. P$PC
9.*rmerl- kn*/n as DCCI:0
K n+e the +*mpan- makes the pr*p*sal it /ill ha2e t* g* thr*ugh the /*rking gr*up0
K #he s+reening +*mmittee *. the /*rking gr*up /ill s+reen the pr*p*sal
K n+e the meeting +. the /*rking gr*up appr*2es the pr*p*sal the +*mpan- +an 3i,
.*urth pr*je+t0
CA"P#$R 10
C(C)U%I(
Pr*je+t $6p*rts has helpe, In,ian ++mpanies an, @*2ernment . In,ia .*r earning
relati2el- m*re '*reign $6+hange1 3e+ause it8s 2*lume an, 2alue is huge +*mpare, t*
*ther 3usinesses0 In,ians are 3ene.ite, as the- int+r.u++ /ith tile latest te+hn*l*gies1
earns m*re m*ne- there.*re Ii 2 ing stan,ar, impr*2es an, lea,s t* *2erall ,e2el*pment
*. pe*ple0 %u++ess *. the pr*je+t starts /ith su++ess.ul ten,ering an, 3i,,ing pr*+ess0
#en,ering an, 3i,,ing is the .irst step in ankin, *r +*nstru+ti*n +*ntra+ting0 #he stu,-
anal-se, the pe+uliarities *. internati*nal +*nstru+ti*n 3usiness an, e6amine, the
,i..erent aspe+ts *. ten,ing an, 3i,,ing internati*nal pr*je+ts0 #he stu,- is 3ase, *n
th*r*ughl- anal-sing the /*r, 3ank ,*+ument1 "DB ,*+uments an, the gui,elines *n
pr*je+t e6p*rts set 3- Reser2e Bank *. In,ia0
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#he .irst step in the *2erseas +*nstru+ti*n 3usiness is taking mem3ership *. P$PC
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n+e the +*mpan- makes the pr*p*sal it /ill ha2e t* g* thr*ugh the /*rking
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#he s+reening +*mmittee *. the /*rking gr*up /ill s+reen the pr*p*sal
n+e the meeting *. the /*rking gr*up appr*2es the pr*p*sal the +*mpan- +an
3i, .*urth pr*je+t0
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#he maj*r *3ser2ati*ns *. 9he stu,- areH
K #here is huge ,i..eren+e 3et/een Internati*nal +*ntra+ting an, ,*mesti+ +*ntra+ting0
#here .*r the stu,- I% 2alua3le gui,e .*r ,*mesti+ +*ntra+t*rs
i nt+reste, in *2erseas +*nstru+ti*n0
K Auge in2estments ar+ +*ming in a num3er *. areas like +i2il +*nstru+ti*n pr*je+ts
9r*a,0 rail/a-s0 ,ams0 airp*rts0 et+0:1 turnke- pr*je+ts 9p*/er generat*r1 transmissi*n an,
,istri3uti*n1 in,ustrial plants0 et+0:1 te+hni+al ser2i+es 9engineering ,esign1 pr*je+t
engineering1 *perati*n an, maintenan+e *. in,ustrial
plants1 et+0:0
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Di..erent stages *. 3i,ing are as .*ll*/sH
10 Pre-ten,er a+ti2ities0
a0 stu,- ten,er ,*+uments
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20 C*n,iti*ns *. +*ntra+t0
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60 Pre-3i, C*n.eren+e0
<0 Re+eipt an, Pr*+essing *. #en,ers0
80 $2aluati*n *. Bi,s0
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present1 there are 8>0 pr*je+t e6p*rt +*ntra+ts 2alue, at *2er Rs0 1<1800 +r*r+ 9appr*60
U%N > Bn: un,er e6e+uti*n in E; +*untries a+r*ss "sia1 ".ri+a an, $ur*pe 3- E1 In,ian
+*mpanies0
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#he .*ll*/ing regi*ns +*ntinue t* 3e p*tential markets .*r Pr*je+t $6p*rt %e+t*r=
#he stu,- re2eals that the ten,ering an, 3i,,ing pr*+e,ure *. *2erseas +*nstru+ti*n
3ussin+ss is mu+h m*re +*mpli+ate,0 Dela-s in 3i,,ing man- man- a times 3e+*mes the
maj*r +ause .*r n*t getting the pr*je+t0
BIB)I@R"PA&=
K Dutt @0 %0= LRep*rt *. #ask '*r+e *n Pr*je+t $6p*rtL1 @*2t0 . In,ia1 Danuea1 QD 200E0
K Dutta %0= L%u++ess *. In,ian C*nstru+ti*n C*mpan- In Internati*nal %+enQ QL1
(IC!"R1 Pune0
K Du3e- U0= L P*tential *. 2ari*us C*untries .*r In,ian +*nstru+ti*n Pr*j ee +== t
$6p*rtsL1 (IC!"R1 Pune0
K Dr0 $,is*n 10 +0= LRea,ings *n Internati*nal C*ntra+ting an, Pr*je+t $6p*rtsLL 01
(IC!"R 200]0
K CC#= LIn,ian +*nstru+ti*n Pr*je+t $6p*rtsL1 1;;;0
K %harma #arun= LPr*je+t $6p*rts - C*nne+ting +*ntinents /ith In,ian e6pertiseL1 $O 1!
Bank *. In,ia1 !um3ai1 200>0
K Vai,0 K0 (0= LInternati*nal +*nstru+ti*n +*ntra+ting - " %-mp*siumL1 (IC!"R0
!um3ai1 1;;10
K Vai,0 K0 (0= L2er2ie/ . In,ian $6p*rts *. C*nstru+ti*n Pr*je+tL1 D*urnal .
C*nstru+ti*n !anagement1 V*lume - II1 (*0E1 +t*3er 1;8<0
K 7*rl, Bank= L7*rl, Bank "nnual Rep*rtsL1 1;8> - 200>0
K "sian De2el*pment Bank1 "nnual Rep*rts1 20020
K 7*rl, Bank= L7*rl, In2estment Rep*rtsL1 #ren,s an, ,eterminants0
P LInternati*nal C*n.eren+e an, $6p*siti*nL1
C*n.eren+e #e+hni+al Papers1
100
V*lume-I1 V*lume-II1 3- CIDC1 Planning C*mmissi*n1 @l1 Venue- Pragati !ai,an1
(e/ Delhi0 %eptem3er 2E-251 200>0
I Pr*je+t $6p*rts1 3- #arun %harma1 pu3lishe, 3- $6im Bank *. In,ia0 2
///0+*nstru+ti*n/*rl,0+*m
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8en,erlng "n, Bi,,ing Internati*nal C*nstru+ti*n Pr*je+ts
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