Finance Minister Nirmala Sitharaman on Wednesday announced up to six months extension for contactors to complete projects of central agencies including railways, amid the COVID-19 pandemic.
The move will benefit contractors hit by coronavirus pandemic as extension of contract period was announced with no associated penalties for not meeting project milestones.
Sitharaman announced extension of up to six months for completion of highways, railways and Central Public Works Department contracts, among others.
"The extension of up to six months without cost to contractor is to be provided by all central agencies like Railways, Ministry of Road Transport & Highways and Central Public Works Department," Sitharaman said.
She said this covers construction works and goods and services contracts besides obligations like completion of work, immediate milestones etc and extension of concession period in contracts on public private partnership.
To ease cash flows, government agencies will partially release bank guarantees, to the extent contracts are partially completed, she said.
Reacting to the announcement, Tata Projects Chief Strategy Officer Himanshu Chaturvedi said: The Government's Atmanirbhar Bharat initiative has recognised 'Infrastructure' as one of the five pillars. This is an acknowledgement of the sector's key role in India's development and large scale employment generation."
Arindam Guha, Partner, Leader Government and Public Services, Deloitte India said,"For road sector contractors and PPP concessionaires, a standstill period of six months has been announced with no associated penalties for not meeting project milestones, automatic extesnion of contract period etc."
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