Lok Sabha Question No. 3451 (UNSTARRED), answered on 2021-12-20
Subject: Revival of Construction Sector
Ministry: FINANCE
Asked by: Andimuthu Raja

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFAIRS

LOK SABHA

UNSTARRED QUESTION No. 3451

TO BE ANSWERED ON: Monday, December 20, 2021/Agrahayana 29, 1943 (Saka)

## REVIVAL OF CONSTRUCTION SECTOR QUESTION

## 3451. SHRI A. RAJA:

Will the Minister of FINANCE be pleased to state:

- (a) whether the Cabinet Committee on Economic Affairs (CCEA) has approved initiatives to revive the construction sector in November, 2019;
- (b) if so, the salient features of the revival policy for the construction sector; and
- (c) the number of arbitration cases awarded by the courts which have been settled and the number of cases which are still pending as on 31.10.2021 on the new policy approved by CCEA in November, 2019?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)

- (a)  &  (b)  CCEA  in  its  meeting  held  on  20.11.2019  approved  certain  measures  for implementation of Initiatives to revive the Construction Sector which are as below:
- (i) With respect to arbitral awards decided in favour of the contractors/ concessionaires, the concerned Government Entity will take the decision to initiate proceedings for setting aside of the arbitral award, and any appeal(s) thereto, with the opinion of a Law Officer (AGI/SCI/ASGI) in consultation with D/o Legal Affairs as per the laid down procedure. D/o Legal Affairs to ensure that the process of soliciting & communicating the opinion of Law Officer is completed within 30 days of request.
- (ii) In cases where the Government Entity has challenged the arbitral award, and, as a result, the amount of the arbitral award has not been paid, 75% of such award will be paid  by  the  Government  Entity  to  the  contractor/concessionaire  against  a  bank guarantee only for the said 75% and not for its interest component. With respect to the interest payable to the Government Entity, should the subsequent court order require refund  of  the  said  75%,  payment  of  the  same  will  be  as  per  the  court  order,  noncompliance of which by the contractor / concessionaire would be a contempt of court. And, the concerned Government Entity will have the right to recover the said interest by way  of  legal/judicial  remedies.  In  cases  where  bank  guarantee  for  the  interest

component has already been submitted by the contractor / concessionaire, the same will be returned by the concerned Government Entity. Should the court order prescribe a rate of interest, the same will prevail.

(c) No such record is maintained by D/o Legal Affairs. However, number of cases wherein interim payment of 75% were given during the last two years by Ministries/departments are as below

|   S. N. | Ministry                               | Number of cases wherein interim payment of 75% were given during the last two years   |
|---------|----------------------------------------|---------------------------------------------------------------------------------------|
|       1 | Ministry of Railways                   | 5                                                                                     |
|       2 | Ministry of Road Transport & Highways  | 1                                                                                     |
|       3 | Ministry of Petroleum & Natural Gas    | 5                                                                                     |
|       4 | Ministry of Housing & Urban Affairs    | 3                                                                                     |
|       5 | Ministry of Steel                      | NIL                                                                                   |
|       6 | Ministry of Civil Aviation             | NIL                                                                                   |
|       7 | Ministry of Port, Shipping & Waterways | NIL                                                                                   |
|       8 | Ministry of Mines                      | NIL                                                                                   |
|       9 | Department of Commerce                 | NIL                                                                                   |
|      10 | Department of Telecommunications       | NIL                                                                                   |

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