On May 26, a reporter learned from the Sichuan Provincial Department of Housing and Urban-Rural Development that Sichuan will carry out a review of various types of deposits in the construction sector and plans to abolish 12 of the existing 16 types of deposits, in order to reduce the occupation of construction enterprises' working capital and ease their burden.
The 12 types of deposits to be abolished are: differential performance deposit, work safety risk mortgage, non-lending of qualifications deposit, project deposit, safe and civilized construction measures fee, living reserve land deposit, land lease deposit, natural gas connection deposit, electricity connection deposit, demolition deposit, advance payment deposit, and letter of guarantee deposit. The 4 types of deposits to be retained are: bid deposit, performance deposit, quality deposit, and migrant workers' wage payment deposit.
A responsible person from the Provincial Department of Housing and Urban-Rural Development said that the 4 types of deposits are retained because they play an important role in binding construction units to perform contracts in good faith and safeguarding the legitimate rights and interests of tenderers, construction units, and the broad masses of migrant workers. It is being considered to allow enterprises to pay the above deposits by means of bank guarantees and insurance guarantees, so as to reduce the occupation of funds.
Industry insiders said that the 16 types of deposits usually account for about 30% of the estimated price of construction bidding projects, and after the review this can be reduced to about 20%.