Showing posts with label contract. Show all posts
Showing posts with label contract. Show all posts
Sunday, 11 December 2016
Power purchase Agreement
Definition of A power purchase agreement (PPA), or electricity power a agreement, is a contract between two
parties, one which generates electricity (the seller) and one which is looking
to purchase electricity (the buyer). In the agreement all the terms and
conditions regarding commercial matters such as when the project will begin commercial operation,
schedule for delivery of electricity, penalties for under delivery, payment
terms, and termination are agreed in detail. The Power Purchase agreement is a
key item in setting up a power project .The project finance largely depends on
this power purchase agreement which explains the revenue and credit quality of
the power generating project. Since the requirement of power will be on
continuous basis the buyer and seller enter into the agreement for minimum 5 to
20 years .During this contract period the buyer purchase energy and other
auxiliary services also. According to power purchase agreement the
responsibility of the selling company of Power is to own the power project by
himself and form a special purpose entity to facilitate the non-recourse
project finance. The responsibility of the buyer of the power purchase
agreement is to purchase the electricity to meet its customers needs.le. Electricity traders may also enter into PPA with the Seller. one of
the key benefits of the Power purchase agreement is that by clearly defining
the output of the generating assets (such as a solar electric system) and the
credit of its associated revenue streams, a Power purchase agreement can be
used by the PPA provider to raise non-recourse financing from as
per the agreement must be supplied to the buyer. Before the seller can sell
electricity to a bank or other financing counterparty. The time
is the essence of the power purchase agreement. The date of signing the
contract between the two parties is called as effective date of the contract.
The generation of power should start as per the completion date mentioned in
the contract agreement. Again it is very clear that the entire power produced
by the power producing company the buyer, the project must be fully tested and
commissioned to ensure reliability and comply with established commercial
practices. The commercial operation date is defined as the date after which all
testing and commissioning has been completed and is the initiation date to
which the seller can start producing electricity for sale (i.e. when the
project has been substantially completed). The commercial operation date also
specifies the period of operation, including an end date that is contractually
agreed
Saturday, 26 November 2016
Minimum wages
To
calculate the labour cost in India two most important parameters are to be
known to the estimator. What is the amount of wages we have to pay to workers?
Whether the wages are same for all the labours or it differs. Second parameter
is the man-hour to be spent for completion of a particular type of activity.
How many persons of different category are to be deployed for that activity? Are
there any common guide lines to calculate the parameters? Yes. Regarding the
labours wages there is a common guide line in India. Remuneration which the workers are entitled
for the work performed by them can be find out by Minimum wages act in India..
The Minimum Wages Act, 1948: It is
landmark legislation in India for regulating of wages in the country. A basic
rate of wages and a special allowance i.e. cost of living allowance; A basic
rate of wages with or without cost of living allowance and case value of
concessions for supplies of essential commodities; An all inclusive rate, i.e.
basic rate, cost of living allowance and cash value concessions. The Government
may fix the minimum rates of wages either by the hour, by the day, by the month
or by such large wage-period as may be prescribed which may be revised at
intervals and reviewed
The Government may fix or revise minimum wages either by
committee procedure of by notification procedure.. The rates recommended by the
committee and accepted by Government or the rates determined by Government
after consideration of all representatives should be published in the Official Gazette.
Minimum Wages in India are revised during the month of April and October of
every year. The living wage is an informal benchmark, not a legally enforceable
minimum level of pay, like the national minimum wage. The Indian Constitution
has defined a 'living wage' that is the level of income for a worker which will
ensure a basic standard of living including good health, dignity, comfort,
education and provide for any contingency.
However, to keep in mind an
industry's capacity to pay the constitution has defined a 'fair wage'.. Fair
wage is that level of wage that not just maintains a level of employment, but
seeks to increase it keeping in perspective the industry’s capacity to pay India
introduced the Minimum Wages Act in 1948, giving both the Central government
and State government jurisdiction in fixing wages. The act is legally
non-binding, but statutory. Payment of wages below the minimum wage rate
amounts to forced labour.
Wage Boards are set up to review the industry’s
capacity to pay and fix minimum wages such that they at least cover a family of
four’s requirements of calories, shelter, clothing, education, medical
assistance, and entertainment. Under the law, wage rates in scheduled
employments differ across states, sectors, skills, regions and occupations owing
to difference in costs of living, regional industries' capacity to pay,
consumption patterns, etc. Hence, there is no single uniform minimum wage rate
across the country and the structure has become overly complex.
Since minimum
wages are not standard and from one state to other state it varies because of
living conditions and enforcement of minimum wages by both state and central
governments it becomes utmost important for the estimator to understand which
Minimum wages act ( whether state minimum wages act or central minimum wages
act) is to be followed.There are standard guidelines and official notifications
and amendments from time to time are to be collected and kept in position ready
before starting the estimation which will sort out calculating the first
parameter of the direct manpower calculations. The minimum wages rate for
Indian workers are normally indicated not with their technical designation like
welder, fitter, rigger, electricians, khalasi
and helpers. They are divided in to four different disciplines classified.. Technicians with high
degree of skills to perform the works are called highly skilled labours.
Normally High pressure welders, electricians, fabricators, Foreman etc fall
under this heading. Fitters , junior electricians, structural welders ,Riggers
are categorised in skilled workers levels similarly khalasis are considered in
semiskilled level and helpers are in unskilled level.
The minimum rates at delhi
as below:
The
following rates of minimum wages shall be applicable in respect of unskilled,
semiskilled and skilled categories in all schedules employments except
employment in the establishments where the workers are given facilities of
meals or lodging or both by the employer
The
estimator to identify the state and place of work to be carried out and collect proper
minimum wages document to fix the wages of different disciplined people.
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Thursday, 24 November 2016
Types of contracts
In my Blog i would like to
describe the general procedure for preparation of quotation when the company
receive the enquiry from the client. Initially the received bid is thou roughly
scrutinised for the worth of quoting the bid. The nature and financial
involvement is assessed by viewing the bid. The bid may be a normal Labour
contract, only a small infra structure civil contract, only a part package of
the project , may be either Engineering,Procurement and construction project or
a normal erection contract .
Labour contracts :Every
company in India have their own policies in selection of the work for
execution. Some contracting companies
wish to participate in all works of construction. It may be a civil contract,
mechanical contract, electrical contract others which is purely construction in
nature. This means whatever materials related to the construction activities
either consumables or construction materials every item will be supplied by the
client. Only labour portion of the contract will be carried out by the
contracting company. The contract value of which will be very less. The
contractors who have labours under their control wishes to execute such bids.
Bigger companies with their own resources don’t wish to participate in such
bids
LABOUR CONTRACTOR WITH
WORKERS
Civil contracts :
When the owner wishes to control the cost of the project normally the infr tructure facilities like local roads( Temperorary in nature) to be provided
for their Engineering, rocurement and contraction contractor ,they develop the
facilities with their own officers and only hiring a medium sized contractor
who can carry out such projects ( Mostly from local area) are selected. In such
cases the civil materials like bricks, sand,rebar,metal etc.According to
clarifications ,contractors are classified as Class A,B,C based on their resources
and financial capabilities. When the work starts the design and darwings required
for execution of the works are normally prepared by the design and engineering
contractor selected by the owner of the project and the execution at site is
being carried out by the officers of the owner.
Buil
Packaging Route :
Certain clients having sufficient workforce implements the project on package route. It means the major equipments and material procurement actions are taken
care by the owner himself and units forming part of the project which are
readily available in market with sufficient experience in that particular field
are purchased by owner. In the presence of the representative of the package
supplier the client himself hire a small contractor and under the guidance of
package vendor the contractor completes the works of the package. Normally the
value of contracts are normally less except for major erections like boilers of
higher capacity. Based on the size and capacity of the package the client
choose a contractor who has sufficient experience in that particular field
along with financial capabilities. In case
the client wants to capture good reputed contractors for installation
they combine major packages together to increase the contract value of the
installation.
Erection Contracts :
When big factories are set up for the production of power, fertilizer
,petrochemicals and ore beneficiation plants the volume of items to be
installed are huge and many and in most of the cases such items can not be
handled by client himself. Hence it becomes absolutely necessary for him to
engage a standard contractor to carry out major installation works. The
erection works are complex in nature and involves installation of many items
like structural steel, Heavy equipments, rotary equipments, pipe line works
with various materials of construction . To handle such a big volume of work it
may not possible either by a small or a medium sized contractor. Hence the
client/ owner has no option except to select a contractor with good financial
capability along with their own major resources to execute the work in time
with quality. Contracts of that nature
are being handled by big contracting companies in the country.
Read my next post regarding cost estimation of Erection
contracts
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