Common use of Performance Guarantee/Security Clause in Contracts

Performance Guarantee/Security. 7.1 The Operation and Maintenance Performance Security: The Successful Bidder shall, at the time of issuance of Letter of Award from the Authority, has to submit the O&M Performance Security in form of the Bank Guarantee. The O&M performance security shall be for an amount of Rs. 1.25 crores (Rs One Crore and Twenty-Five Lakhs) for an initial period as defined in this section. It is hereby clarified that the Operator will supplement/enhance the O&M Performance Security at the time of Handover Date of the Project if the actual project cost (as determined and informed by the Authority to the Operator) exceeds the Estimated Project Cost so that the O&M Performance Security is at least 5% of the actual project cost. The Performance Security will be 5% of the actual project cost or 1.25 crores (whichever is higher) for the initial 6.5 (Six and a Half) years from date of issuance of Letter of Award from the Authority and the same will be reduced to 2% of the actual project cost or 50 Lakhs (whichever is higher) for remaining period of the Term. Once the Operator submits Performance Security of 2% of the actual project cost before the completion of 6.5 years of period, the initial Performance Security of 5% will be released back to the Operator by the Authority. All charges, fees, costs and expenses related to the Bank Guarantee shall be borne and paid by the Operator.

Performance Guarantee/Security. 7.1 The Operation and Maintenance Performance Security: The Successful Bidder shall, at the time of issuance of Letter of Award from the Authority, has to submit the O&M Performance Security in form of the Bank Guarantee. The O&M performance security shall be for an amount of Rs. 1.25 crores 62 lakhs (Rs One Crore and TwentySixty-Five Two Lakhs) for an initial period as defined in this section. It is hereby clarified that the Operator will supplement/enhance the O&M Performance Security at the time of Handover Date of the Project if the actual project cost (as determined and informed by the Authority to the Operator) exceeds the Estimated Project Cost so that the O&M Performance Security is at least 5% of the actual project cost. The Performance Security will be 5% of the actual project cost or 1.25 crores 62 lakhs (whichever is higher) for the initial 6.5 13 (Six and a HalfThirteen) years from date of issuance of Letter of Award from the Authority and the same will be reduced to 2% of the actual project cost or 50 25 Lakhs (whichever is higher) for remaining period of the Term. Once the Operator submits Performance Security of 2% of the actual project cost before the completion of 6.5 13 (Thirteen) years of period, the initial Performance Security of 5% will be released back to the Operator by the Authority. All charges, fees, costs and expenses related to the Bank Guarantee shall be borne and paid by the Operator.