Paragraph 9 SecurityI1

prior to the commencement of each phase, the HE works within that phase must be secured by a bond from a bondsman first approved by Highways England drafted substantially as detailed in Form 1 contained in paragraph 17 of this Part of this Schedule, or such other form that may be agreed between the undertaker and Highways England, to indemnify Highways England against all losses, damages, costs or expenses arising from any breach of any one or more of the obligations of the undertaker in respect of that phase under the provisions of this Part of this Schedule, provided that the maximum liability of the bond does not exceed the bond sum relating to that phase; and

prior to the commencement of the HE works, the undertaker must provide the cash surety which may be utilised by Highways England in the event of the undertaker failing to meet its obligations to make payments under paragraph 5 of this Part of this Schedule or to carry out works the need for which arises from a breach of one or more of the obligations of the undertaker (which will be a single cash surety for the entirety of the HE works).

on receipt of written confirmation (including receipt of receipted invoices evidencing payments made by the undertaker to the contractors) from the undertaker of the payments made from time to time to the contractor, Highways England must, in writing, authorise the reduction of the bond sum by such proportion of the bond sum as amounts to 80% of those payments provided that an evaluation of the HE works completed and remaining has been carried out by the undertaker and audited and agreed by Highways England to ensure that the stage of completion of the works is relative to the payments made by the undertaker to the contractors. Highways England will only be required to provide the said authorisation if it is satisfied that the monies remaining secured by the bond sum will be sufficient to cover all remaining costs and liabilities anticipated to be incurred in completing the HE works plus an additional 20%;

within 20 working days of completion of each phase of the HE works (as evidenced by the issuing of the provisional certificate in respect of that phase in accordance with paragraph 6(1) of this Part of this Schedule) Highways England must, in writing, release the bond provider from its obligations in respect of 80% of the bond sum relating to that phase (“the revised bond sum”) save insofar as any claim or claims have been made against the bond and/or liability on its part has arisen prior to that date, in which case Highways England will retain a sufficient sum to meet all necessary costs; and

within 20 working days of the issue of the final certificate for each phase of the HE works referred to in paragraph 8 of this Part of this Schedule, Highways England must, in writing, release the bond provider from its obligations in respect of the revised bond sum relating to that phase and (in respect of the final phase) release the remainder of the cash surety to the undertaker save insofar as any claim or claims have been made against the bond or liability on its part has arisen prior to that date, in which case Highways England will retain a sufficient sum to meet all necessary costs.