Mubasher: The Middle East's construction sector should get rid of construction bonds to spare itself many problems, a top official has said, describing construction bonds as being "archaic".
There are four types of construction bonds used in the region that should be eliminated, head of Laing O’Rourke’s Middle East business Mark Andrews told Construction Week Online, indicating that the construction bonds included: advanced payment bonds, performance bonds, retention bonds, and bid bonds,
"I would like to see the elimination of bonds, period. I see that going on in other parts of the world and for me, it is an archaic practice,” he stressed.
The presence of an “efficient” legal system would be a useful substitution of the usage of bonds to solve disputes, Andrews explained.
"In the UK market, for example, we have not seen a bond requirement from any of our clients for the best part of the past two years. In $6.4 billion (EUR 5 billion) of new work, there has not been a bond requirement," he added.