No. 1(1)2011-PF.II
Government of India
Department of Expenditure
(Plan Finance-II Division)
New Delhi, dated 09.03.2012
Office Memorandum
Sub: Circulation of Revised formats of EFC/PIB Memorandum.
The EFC/PIB format was last revised vide O.M. No. 1(8)/PF-II/98
dated 30th October, 1998. A number of amendments have been carried out
since then for incorporating evolving policies and procedures. Need has
been felt for consolidating these changes. Opportunity has been taken to
recast the format for improving its functionality. A copy of the revised
format is circulated herewith with the request that the same may be used
for submitting the EFC/PIB proposals.
(Meena Agarwal)
Joint Secretary to the Govt. of India
To
1. Secretaries of all Ministries/Departments
2. Financial Advisors of all Ministries/Departments
3. Advisor (PAMD),
Planning Commission,
New Delhi.
FORMAT FOR EFC/ PIB MEMORANDUM
1. Project identification
1.1 Title of the project/ scheme:
1.2 Name of the sponsoring agency (Ministry/ Department/
Autonomous Body/ Central PSE):
1.3 Proposed duration of the project
1.4 Total cost of the project over the proposed duration
2. Project Status
2.1 Please indicate which category the project belongs to:
(a) Continuing scheme from past Plan periods and included in
current Plan period.
(b) New Plan Scheme included in the current Plan period
(c) New Plan scheme not included in the current Plan period
(d) RCE proposal
2.2 If project pertains to category 2.1 (a), please summarise the
benefits already accrued and expenditure already incurred along
with an independent evaluation of the past performance of the
project scheme.
2.3 If the project pertains to category 2.1 (c), please indicate steps
initiated for obtaining approval of Full Planning Commission.
3. Justification for the project
3.1 The justification for taking up/ continuing the project or scheme
may be provided.
3.2 The alternatives that have been considered before firming up the
design of the project may be stated. (This should also include
alternate modes of project delivery, e.g. outsourcing PPP etc. that
have been considered).
3.3 Please state whether the project proposal has objectives and
coverage which overlap with projects/ schemes being implemented
by the same or another agency (Ministry/ Department/ State
government). In cases of overlap, please state why the project
scheme needs to be considered as a separate stand alone effort.
4. Project Objectives and targets
4.1 The objectives of the project may be mentioned. These objectives
should flow from the project justification.
4.2 The expected date of project/ scheme completion may be stated.
This should be realistic and supported with a chart indicating
timelines for the important activities, with a critical path analysis,
identifying the main constraints.
4.3 The specific targets proposed to be achieved of the project/ scheme
may be mentioned. These targets should be necessary
measurable. These should also be monitor-able, against baseline
data. The baseline may be indicated.
5. Project design
5.1 Briefly explain the project Design. This should include all
components of the project.
5.2 In case the project or scheme is location specific, please state the
basis for selection of such location.
5.3 if the project involves creation/ modification of structural and
engineering assets or change in land use plans, disaster
management concerns as brought out in OM no. 37(4)/PF-II/2003
dated 19-06-2009 should be assessed. A self-certification in this
regard may be enclosed with the EFC memo.
5.4 In case of beneficiary oriented project/ scheme, the mechanism for
identification of the beneficiary and the linkage of beneficiary
identification with UID numbers may be indicated as advised in
O.M. No. 1(3)/PF-II/2001 dated 09.08.2010.
5.5 Wherever possible, the mode of delivery should involve the
Panchayati Raj Institutions and Urban Local Bodies. Where this is
intended, the preparedness and the ability of the panchayats for
executing the project may be indicated. If exceptions are to be
made, the reasons may be explained.
5.6 In case the project involves land acquisition or environmental
clearances, the specific requirements and the status in this regard
may be indicated.
5.7 The legacy arrangements after the scheduled project duration may
be mentioned. In case the project creates assets, arrangements for
their maintenance and upkeep may be stated. (For example the
project assets may be taken over and maintained by the State
Government/ PRIs; ULBs).
5.8 Whether the guidelines of Bureau of Energy Efficiency and other
related guidelines for energy efficient buildings etc. have been
considered / complied with.
5.9 Whether the project is secured against natural/ man-made disasters
like floods, cyclones, earthquakes, tsunamis etc.
6. Project/Scheme cost
6.1 Please provide the project cost estimate for its scheduled duration
along with a break-up of year-wise, component-wise expenses
segregated into non-recurring and recurring expenses. It may also
be indicated whether land is needed, if so whether which agency is
providing for it, and in case the cost of land is to be booked to the
project, whether it has been included in the estimates.
6.2 Estimated expenditure on project administration (including
expenses on consultants, etc.) may be separately indicated.
6.3 The basis of these cost estimates along with the reference dates for
normative costing may be provided. The firmness of the estimate
may be indicated along with the cost components that can vary, the
factors that could cause the variation and the extent of the expected
variation.
6.4 In case the project/ scheme involves payout of subsidy, the year
wise expected outgo, up to the last year of payout, may be
indicated.
6.5 In case the project/ scheme intends to create capital assets, employ
specialised manpower or involves other activities that necessitate a
Recurring Cost of Capital Expenditure (RCCE) (e.g., maintenance
and upkeep costs of assets, salary costs of manpower, etc.) over
the lifetime of the asset, such expenditures, on an annual basis,
may be indicated in the project proposal.
6.6 It may also be stated whether the agency which would be assigned
this legacy responsibility has been consulted and has agreed to
bear the continuing recurring expenditure. (e.g., the State
governments may need to incur the maintenance and upkeep costs
of assets created under Plan schemes.
6.7 The cost towards salary/ fees/ emoluments of the project human
resources as being proposed should be indicated (procedure for
seeking approval of the human resource requirements is however
detailed at para-7 below).
6.8 The component of the costs mentioned at 6.1-6.7, that will be
shared by the state governments may be indicated.
6.9 In the event of fund transfer being made to State Govts/ local bodies
or other organisations, "grants for creation of capital assets" may be
indicated separately.
7. Project Human Resources
7.1 Please indicate whether the nodal officer directly in charge of the
project has been identified. Details about his status, past experience
in executing similar projects and balance tenure left for steering the
project may also be mentioned.
7.2 In case posts (permanent or temporary) are intended to be created,
such proposal may be sent on file to Personnel Division of
Department of Expenditure separately. Such proposals may be sent
only after the overall project proposal is recommended by the
appropriate appraisal body (SFC, EFC, etc.).
7.3 In case outsourcing of services or hiring of consultants is intended,
brief details of the same may be indicated. It may also be certified
that the relevant GFR provisions will be followed which engaging
the agency/ consultant.
7.4 In case additional manpower requirement, please indicate the
phased requirement over the project timeline (i.e. year-wise break-
up of the manpower requirement)
8. Project financing
8.1 The source of financing for the project may be indicated. In case of
project already included in the FYP, the specific earmarking may be
mentioned. In case of any deviations from this quantum, the
sponsoring agency may indicate how the gap will be addressed.
8.2 The availability of funds in the budget of the present year and the
requirements projected may be mentioned. In case of any
deviations, please indicate how the gap will be addressed.
8.3 If external sources are intended, the sponsoring agency may
indicate whether such funds have been tied up. In case firm
commitment is not available, alternate plans for arranging funds
may be indicated.
8.4 Whether the funding requirements have been fully tied up with
Planning Commission may be indicated.
9. Project viability
9.1 In case of projects which have identified stream of financial returns,
the financial internal rate of return may be calculated. The hurdle rate
is considered at 12%.
9.2 In case of projects where financial returns are not readily quantifiable
(typically social development projects), the economic rate of return
may be estimated.
10. Project implementation and monitoring
10.1 The administrative structure for implementing the project may be
stated. In case new structures/ entities etc. is by and large to be
avoided. In case new structures are intended to be created for
administering the scheme, the details of such structures and
specific justification for the same may be provided. Such new
structure should be proposed only it is has been established after
due analysis, that existing structures cannot be levered for the
proposed/additional work.
10.2 A flow chart for the intended fund flow mechanism may be
indicated. Funds flows for all schemes/ projects in states should
ordinarily be through the State Government.
10.3 The monitoring framework for the project/ scheme may be indicated.
The arrangements for audit of the project may also be stated.
11. Project/Scheme sensitivities
11.1 Any foreseeable constraints/ uncertainties which can affect the
technical design, costing and implementation of the project may be
indicated.
11.2 The likely impact of these constraints/ uncertainties on the project
parameters may be stated. In particular, the sensitivity of the project
cost, project schedule and project viability towards the possible
constraints/ uncertainties may be mentioned.
12. Project period
12.1 The expected date of project completion may be stated. This should
be realistic and supported with PERT chart of the important activities,
with a critical path analysis, identifying the main constraints.
12.2 The project closure date should be also indicated beyond which
further government support/ disbursal of funds will not be required.
12.3 A time line for the project deliverables (i.e. measurable deliverables
phased year-wise) may be included.
13. RCE proposals
13.1 Details of physical progress achieved and expenditure incurred
and commitment made so far may be given.
13.2 Date of latest approved, revised and proposed completion
schedule of the project along with time overrun and reasons
thereof may be elaborated.
13.3 Item-wise cost variance between approved (latest) cost and
revised cost as propose may be given.
13.4 Reasons of increase in cost may be given in the following
manner
(a) Price Escalation
(b) Foreign Exchange variation
(c) Statutory levies
(d) Change in Scope
(e) Addition/ deletion
(f) Under-estimation
(g) Others (to be specified)
13.5 The underlying justification for increases in cost due to various
factors may be explained.
13.6 Effect of revision in capital cost estimates on cost of production
and profitability / viability with reference to earlier approved
capital cost of the project
13.7 Report of Standing Committee to fix the responsibility for cost
and time overrun along with action taken report on its
recommendations may be appended with the EFC/PIB memo.
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