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If the estimated value is more than?
Project will not be approved
One canтАЩt survive in competition
Both
None of above
Both
In electrical project estimation, if the final estimated cost or load value significantly exceeds the budgeted or sanctioned limits, the project typically fails to receive administrative approval due to financial infeasibility. Furthermore, an overestimation of project costs renders the proposal uncompetitive in bidding scenarios compared to market rivals.
In electrical project estimation, if the final estimated cost or load value significantly exceeds the budgeted or sanctioned limits, the project typically fails to receive administrative approval due to financial infeasibility. Furthermore, an overestimation of project costs renders the proposal uncompetitive in bidding scenarios compared to market rivals.
EcтАЛ>SbтАЛ тАФ Financial infeasibility condition where estimated cost exceeds sanction budget
PofferтАЛ>MrateтАЛ тАФ Loss of competitive edge where project offer exceeds market rate
The principle of project feasibility relies on Cost-Benefit Analysis (CBA) and Competitive Bidding. If the estimated cost EcтАЛ exceeds the sanctioned budget SbтАЛ, the project cannot be sanctioned. Similarly, if the quote exceeds the market rate MrтАЛ, the organization loses its competitive edge, leading to the rejection of the bid.
Administrative Approval: Projects require financial sanction based on initial estimation.
Competitive Market: Excessive estimates exclude firms from winning government or private contracts.
Cost Overruns: If estimated values are unrealistic, the project lifecycle faces severe funding risks.
Procurement Ethics: Accurate estimation ensures transparency in the tendering process.
Ensures fiscal discipline
Maintains competitive market position
Underestimation leads to project delays
High estimation leads to project abandonment
Power system infrastructure planning
Electrical construction tendering
Budget allocation for power distribution networks
The process of estimating is usually based on the Schedule of Rates (SOR) provided by the government or utilities.
If the estimate is too high, the 'Tender Premium' exceeds the acceptable deviation limit (usually 5-10%), causing automatic rejection.
C is correct тАФ If the estimated value exceeds the sanctioned budget, the project is denied approval, and if it exceeds the market standard, the organization becomes uncompetitive.
In exams, always look for the 'logical consequence' when financial limits are crossed; usually, both internal (approval) and external (market) factors are impacted.