CURRENT AFFAIRS : BANKING & FINANCE
NHAI Accepts First Insurance Surety Bond as Bid Security for NHAI TOT Bid for Monetization
- To boost liquidity and capacity of bidders, National Highways Authority of India(NHAI) has accepted Insurance Surety Bond for the monetization program of the upcoming bid of Toll Operate Transfer (TOT) Bundle 14.
- This will be the first time this innovative instrument is being utilised as a Bank Guarantee (BG) in the road infrastructure sector for monetization of bids.
Key Highlights :
- Collaboration and Partnerships : NHAI collaborated with the Highway Operators Association of India (HOAI), SBI General Insurance, and AON India Insurance to implement the initiative.
- This collaboration indicates the involvement of key stakeholders in the road infrastructure development sector.
- Cost and Savings : The Insurance Surety Bond for TOT Bundle 14 has been issued at a rate of 0.25% by the insurer without requiring any margin money.
- This approach translates into significant cost savings for concessionaires, contributing to enhanced liquidity in the market.
- Implications for Concessionaires : The utilisation of Insurance Surety Bonds will result in substantial savings for concessionaires participating in the NHAI monetization bid.
