Panelists advocates wider adoption of financial instruments for NHAI contracts
Around 700 Insurance Surety Bonds (ISBs), valued at around Rs.3,000 crores, have been issued by different insurance companies so far, said the National Highway Authority of India (NHAI) which has so far received 164 ISBs consisting of 20 bonds for Performance Security and 144 Bonds for bid securities.
This was shared by NHAI at a workshop in New Delhi on implementation of ISBs for NHAI contracts https://nhai.gov.in/ .
“The workshop was to review the progress made in implementation of Insurance Surety Bonds and encourage participation from the stakeholders for wider adoption of the instrument,” said the Ministry of Road Transport and Highways https://morth.nic.in/ .
Recognizing the potential of ISB, the panelists during the workshop advocated for a wider adoption of the financial instrument https://www.conexpoconagg.com/ for awarding of NHAI contracts, the ministry said in a release on 15 May.
“The workshop also outlined various challenges and deliberated on possible measures that can be taken for faster adoption of the instrument .”
ISB is a financial instrument, where insurance companies act as ‘Surety’ and provides the financial guarantee https://www.meed.com/latest/tenders that the contractor will fulfil its obligation as per the agreed terms. Wider adoption of such instruments will help to strengthen infrastructure development in the country, the minister said.
The workshop was addressed by Rajendra Kumar, Member (Finance) NHAI; A. K. Singh, CGM (Finance) NHAI; N. B. Sathe, Advisor, NHAI; and Mandakini Balodhi, Director, Department of Financial Services.
The workshop was attended by representatives from various Central Government Ministries & Departments, Insurance Companies, Highway Operators Association of India (HOAI) and National Highways Builders Federation (NHBF) https://www.nhbf.co.in/ .
Ministry of Finance, ISBs at par with Bank Guarantees for all Government procurements and NHAI has been urging insurance companies and contractors to use Insurance Surety Bonds as an additional mode of submitting Bid Security and /or Performance Security, said the ministry. Fiinews.com
