Construction Law/Security

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Question
Dear Sir

What is the difference between the Performance Bond and Parent Company Guarantee.

What is the advantage of Parent Company Guarantee instead of Performance Bond for the Employer.

Br

Sudantha

Answer
dear sir.
very briefly,I understand as follows
1.Both are guarantees, one issued by an independent bank/financial setup while PCG is from the group of which the contracting party is a part or associate.
2.in parent company guarantee there is no premium to pay nor any period specified normally as it is within corporate responsibility of the group whereas it is altogether opposite.It may however be understood that a lone party cannot avail PCG.
Regards-liaqat hayat

Construction Law

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Liaqat Hayat

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I can answer questions based on FIDIC 4 and FIDIC 1999 [design-build] with particular reference to time extension , price adjustment and disputes. I am in particular more inclined for response to points pertaining to how claims should be framed and put up in case of technical or other contractual shortcomings. Regarding procurement matters I have spent over 5 years as procurement specialist for highway authority and dealt with numerous claims and disputes in the capacity of "The Engineer" .

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