MoRTH to release Rs 8,000 cr retention funds to EPC highway contractors
It has extended time to contractor/concessionaire for meeting their obligation under the contract
The Ministry of Road Transport and Highways (MoRTH) has decided to release Rs 7,500-Rs 8,000 crore of retention money to provide liquidity support to engineering, procurement and construction (EPC) concessionaires.
The retention money is the amount a concessionaire has to keep with the government during construction period, in proportion to the work already executed.
Currently, around 1,260 EPC projects, measuring 36,000 km are in various stages of construction at an estimated cost of Rs 3.65 lakh crore.
Developers are required to keep 5% of the project cost as the retention money with the government during construction period.
MoRTH has stated that no fresh deductions of the retention money will be made in the next three to six months.
For projects being developed on the hybrid annuity model/build, operate, transfer basis, performance guarantee may be released on a pro-rata basis as per the contract, if the concessionaire does not breach contract.
MoRTH has extended time to contractor/concessionaire for meeting their obligation under the contract from three months up to six months depending on site conditions. It has also waived off penalty for delay in submission of performance security/bank guarantee in a new contract entered during March 2020 and September 2020.
The concession period of BOT contracts will be extended by a period equal to the duration of three months to up to six months. The concession period will be extended by a period in accordance with the contract till the time daily collection is below 90% of the average daily fee.