How to Calculate the Price Adjustment for “Civil Construction Project” Part-1

 

PRICE ADJUSTMENTS
1 Adjustment for Labour Component:
VL = 0.85X PL/100 X R X (Li-LO)/LO
VL = increase or decrease in the cost of work during the quarter under consideration due to changes in rates for local labour.
LO = the average consumer price index for industrial workers for Ahmedabad Centre for the quarter preceding the date of opening of Bids as published by Labour Bureau, Ministry of Labour, Govt of India.
Li = the average consumer price index for industrial workers for Ahmedabad centre for the quarter under considerations as published by Labour Bureau, Ministry of Labour, Govt of India.
PL = Percentage of Labour component of the work.
2 Adjustment for Cement Component :
Vc = 0.85X Pc/100 X R X (Ci-CO)/CO
Vc = increase or decrease in the cost of work during the quarter under consideration due to changes in rates for cement. 0.131
CO = the all india average wholesale price index for cement for the quarter preceding the date of opening of Bids as published by Ministry of Industry Development, Govt of India. 150.00
Ci = the all india average wholesale price index for cement for the quarter under considerations as published by Ministry of Industrial Development, Govt of India. 194.00
Pc = Percentage of Cement component of the work. 15.43
3 Adjustment for Steel Component :
same as Cement
4 Adjustment for Bitumen Component : Vb = 0.85X Pb/100 X R X (Bi-BO)/BO
5 Adjustment for POL Component : Vf = 0.85X Pf/100 X R X (Fi-FO)/FO
6 Adjustment for P & M Component : Vp = 0.85X Pp/100 X R X (Pi-PO)/PO
7 Adjustment for Local Materials Component : Vm = 0.85X Pm/100 X R X (Mi-MO)/MO
For Example one Project: The following percentages will govern the price adjusments for the entire contract:
Labour : 36.10%
Cement : 15.43%
Steel : 13.65%
Bitumen : 0.38%
POL : 1.28%
Plant & Machinery :
Other Materials : 33.16%
NTPC
ACV1 = CV(F+(lL1/L0)+(mM1/M0)+(dD1/D0))
ACV1 = Adjusted contract price i.e value of work done after application of above price adjustment
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