Sitharaman announces 6 months extension for construction contracts

Union Finance Minister Nirmala Sitharaman on Wednesday (May 13) announced up to six months extension for completion of obligations under highways, railways and other contracts.

The move will provide relief to contractors impacted by the COVID-19 crisis. “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 and Highways and Central Public Works Department,” Sitharaman said.

“Registration and completion date is to be extended suo-moto by six months for all registered projects expiring on or after March 25, 2020 without individual applications,” the Finance Minister 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.

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“Treat COVID-19 as an event of ‘Force Majeure’ under the Real Estate Regulatory Authority (RERA) Act,” she added.

Union Finance Minister Nirmala Sitharaman, while addressing a press conference on Wednesday (May 13), spoke on a variety of schemes and measures implemented for different sectors under the ‘Atmanirbhar Bharat’ initiative, including the development of Micro, Small and Medium Enterprises (MSMEs), tax deductions, real estate, liquidity injection for Power Distribution Companies (DISCOMS) and many more.

In a series of media briefings over the next few days, the Finance Minister will provide further details about the economic stimulus package announced by Prime Minister Narendra Modi on Tuesday (May 12) during his address to the nation.

The stimulus package is intended to facilitate the revival of the economy, considering the impact of the nationwide lockdown on the economic growth of the country.

(With inputs from agencies)