The NHAI has proposed insurance
cover for road projects that could help bring in credible project developers
and mitigate construction period risks. It is trying that insurance companies
to give a surety. This has been proposed to the IRDAI
to come up with an instrument. An official said that this mechanism has been
proposed since banks are facing difficulties in furnishing bank guarantees. NHAI is working on the concept of
surety bonds, commonplace in several countries, including the US, UK, Australia
and Canada. World over,there is a concept of surety bonds. The government is
trying to bring that concept to India. A surety bond is a three-party
agreement that legally binds together a principal who needs the bond, an
obligee who requires the bond, and a surety company that sells the bond. Surety
bonds provide financial guarantee that contracts will be completed according to
pre-defined and mutual terms.
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NHAI proposes insurance cover for road projects
By IndianMandarins - 2020-01-29 13:08:00
The NHAI has proposed insurance cover for road projects that could help bring in credible project developers and mitigate construction period risks. It is trying that insurance companies to give a surety.
This has been proposed to the IRDAI to come up with an instrument. An official said that this mechanism has been proposed since banks are facing difficulties in furnishing bank guarantees.
NHAI is working on the concept of surety bonds, commonplace in several countries, including the US, UK, Australia and Canada. World over,there is a concept of surety bonds. The government is trying to bring that concept to India.
A surety bond is a three-party agreement that legally binds together a principal who needs the bond, an obligee who requires the bond, and a surety company that sells the bond. Surety bonds provide financial guarantee that contracts will be completed according to pre-defined and mutual terms.
