Sep 2 2016 | India Opportunities
CCEA approves measures to revive the construction sector
With the aim to revive the ailing construction sector, the Cabinet Committee on Economic Affairs (CCEA) has approved various measures proposed by the NITI Aayog. It is proposed that the Government agencies would pay 75% of the arbitral award amount to an escrow account against margin free bank guarantee, in those cases where the award is challenged. The escrow account can be used to repay bank loans or to meet commitments in ongoing projects. This is a major step which will allow recovery of loans by banks and allow construction companies to speed up execution of ongoing projects. It will also increase the ability of construction companies to bid for new contracts and the resulting competition will be beneficial in containing the costs of public works.