Insurance corporations have issued about 700 insurance surety bonds valued about ₹3,000 crore after Centre makes the instrument on par with financial institution ensures for all authorities procurements.
Details had been shared by officers at a workshop on implementation of insurance surety bonds in nationwide freeway contracts, organised by the National Highways Authority of India in New Delhi.
NHAI has obtained 164 insurance surety bonds consisting of 20 bonds for efficiency safety and 144 of them for bid securities. Contractors are being urged to utilise the bonds as a further mode of submitting bid safety and or efficiency safety, the Ministry of Road Transport and Highways mentioned in a launch on Wednesday.
Insurance surety bonds is a monetary instrument the place insurance corporations act as ‘surety’ and supply monetary assure that the contractor will fulfil the duty as per the agreed phrases. Wider adoption of such devices will assist strengthen infrastructure improvement within the nation, the Ministry mentioned.
In November 2023, NHAI had introduced that it has accepted insurance surety bond for the primary time, for the monetisation programme of an upcoming bid of a Toll Operate Transfer (TOT) package deal. “This will be the first time this innovative instrument is being utilized as a bank guarantee in the road infrastructure sector for monetisation of bids,” it had mentioned.
