Transformers & Rectifiers (India) Ltd [TRIL] expects to get substantial relief in bank guarantees for existing and upcoming contracts from Power Grid Corporation of India Ltd, the transformer manufacturer said in a stock exchange filing.
TRIL, in the communication, said that Power Grid Corporation of India has issued guidelines for reduction in performance security from the existing 10 per cent to 3 per cent for existing contracts as well as upcoming contracts. TRIL added that upcoming contracts refer to those on which work is expected to start by December 31, 2021.
These guidelines issued by PGCIL are in line with the 12 measures that were announced by Union finance minister, under AatmaNirbhar Bharat 3.0, on November 12, 2020.
TRIL said that it would get relief in the form of bank-guarantee value reduction of around Rs.68 crore from PGCIL. This will reduce bank guarantees outstanding with banks and will also result in further reduction in contingent liability, TRIL said.
Support to infrastructure
It may be recalled that one of the 12 measures announced by the finance minister was towards support to construction and infrastructure. Accordingly, to provide ease of doing business and relief to contractors whose money otherwise remains locked up, performance security on contracts was reduced from 5-10 per cent to 3 per cent. It will also extend to ongoing contracts and public sector enterprises. EMD for tenders will be replaced by Bid Security Declaration. The relaxations in the General Financial Rules will be in force till December 31, 2021.
Featured photograph shows inside view of TRIL’s transformer manufacturing facility at Changodar in Gujarat.
