“Until July 2025, 12 insurance coverage corporations have issued round 1,600 ISBs as bid safety and 207 ISBs as efficiency safety valued at round Rs 10,369 crores for NHAI contracts,” the highway ministry mentioned in a press release issued on Thursday.
Insurance coverage Surety Bonds are devices the place insurance coverage corporations act as ‘surety' and supply the monetary assure that the contractor will fulfil its obligation as per the agreed phrases.
NHAI has been encouraging using Insurance coverage Surety Bonds as a further mode of submitting bid safety or efficiency safety deposit.
The ministry of finance has made e-BG and Insurance coverage Surety Bonds at par with BGs for all authorities procurements. The Insurance coverage Surety Bonds, when issued, can be value efficient and supply sufficient safety for NHAI initiatives, the ministry mentioned.
The ministry is of the view that as India is poised to develop into the world's third largest development market, the requirement of financial institution ensures within the Indian infrastructure Sector is anticipated to develop by 6% to eight% year-on-year foundation. Surety bonds act as a viable different to financial institution ensures. ISB are cost-effective and will present substantial reduction for the infrastructure sector, it added.NHAI on Thursday organised a workshop to additional promote wider adoption of Insurance coverage Surety Bonds (ISB) and Digital Financial institution Assure (eBG).
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