Photo of Ajay Sawhney

Partner in the Projects and Financing Practice at the Delhi office of Cyril Amarchand Mangaldas,  Ajay focuses on projects and financing advising various business groups on their construction and development side of domestic and international projects, and has advised banks and financial institutions on lending in airport, road, power generation and other infrastructure projects throughout Asia Pacific region. Chambers Asia-Pacific, 2017 has recognized him as a ‘Notable Practitioner’ for Projects, Infrastructure & Energy. He can be reached at ajay.sawhney@cyrilshroff.com.

Bank Guarantee

A move that may prove to be a game-changer but the proof lies in the pudding

A government procurement contract (GPC) for goods and/ or services usually requires the elected counterparty (Contractor) to furnish a bank guarantee (BG) of upto 5-10% of the contract value as performance security, as per General Financial Rules 2017. Rising non-performing assets, in recent years, have prompted banks to exercise greater caution while issuing BGs, due to which, the cost of procuring a BG has gone up from 20-40 basis points to 50-130 basis points and the cash margin required for securing a BG has also increased from 15-20% to 40-100% of the amount of the BG. Owing to these factors, the procurement of a BG has become increasingly cumbersome for Contractors and they have been long-advocating the need for an alternative to BGs.Continue Reading Replacement of bank guarantees with surety bonds in government procurement: A welcome relief?

USHERING A NEW WAVE OF REFORMS IN PUBLIC PROCUREMENT AND PROJECT MANAGEMENT

INTRODUCTION

Cost and time overruns have long since plagued India’s infrastructure sector and given a bad name to public projects being executed in the country. According to a report[1] published by the Ministry of Statistics and Programme Implementation, as on November 1, 2021, 438 out of 1,681 central sector infrastructure projects have been affected by cost overruns, aggregating to Rs 4.34 lakh crore, and 539 projects are running behind their respective schedules. Such delays take a toll on the viability of projects. To mitigate this problem, the Central Vigilance Commission (“CVC”), Comptroller and Auditor General of India and NITI Aayog have long-advocated the need to revamp the procurement and project management procedures in India. The efforts of these premier institutions have culminated in the Ministry of Finance issuing the General Instructions on Procurement and Project Management on October 29, 2021 (“General Instructions”). By introducing provisions pertaining to additional methods of procurement, timely payment to contractors and reforms in the dispute resolution process, the General Instructions attempt to overhaul the manner in which projects are awarded and implemented by public authorities and project executing agencies (“PEA”).
Continue Reading Ushering a New Wave of Reforms in Public Procurement and Project Management

Interplay of Data Analytics, AI and Infrastructure Investment

Artificial Intelligence and Data Analytics

The global race to augment capabilities of artificial intelligence (AI) is intensifying in both advanced and emerging economies. From optimising power generation and transmission, diagnosis and drug discovery, improving learning environment, enhancing design and functionality, to automation in logistics, AI will not only continue to evolve but possibly surpass human intelligence in the near future. Today’s digital age is overflowing with valuable data which if appropriately analyzed can predict results, making data analytics an indispensable tool for any corporate to sustain in the economy.
Continue Reading Tomorrow’s Technology in Today’s Infrastructure: Interplay of Data Analytics, AI and Infrastructure Investment