The NHAI has embraced an innovative approach by accepting the first insurance surety bond for the toll operate transfer (TOT) bundle 14 monetisation bid. This instrument serves as a bank guarantee (BG) in the road infrastructure sector.
NHAI collaborated with the Highway Operators Association of India (HOAI), SBI General Insurance, and AON India Insurance for the implementation of this initiative. The insurance surety bond, issued at 0.25 per cent, eliminates the need for margin money, resulting in substantial cost savings for concessionaires. NHAI encourages the use of insurance surety bonds by insurance companies and contractors as an alternative mode for submitting bid security and/or performance security, fostering liquidity and growth in the road sector.
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