16 , May , 2020
In a major announcement, all Central agencies have been asked to provide up to 6 months extension, without any cost to the contractor, for obligations such as completion of work. The announcement was made by FM Nirmala Sitharaman, a day after PM Narendra Modi promised a Rs. 20 lakh crore economic stimulus package to deal with the fallout of the Corona virus pandemic.
The relief for contractors covers construction and goods and services contracts. This includes Central agencies like Indian Railways, roadways and highways projects, Central Public Works Department etc. The extension of up to 6 months covers obligations by the contractor for completion of work, extension of concession period in Public Private Partnership contracts or any intermediate milestones.
The government agencies have been directed to partially release bank guarantees. This will be done to the extent contracts are partially complete, with an aim to ease the cash flows.
