These type of bonds are normally in favour of Local Authorities/Councils/Water companies to ensure that the Contractor has fulfilled his obligations in relation to the construction and maintenance of roads or sewers.
A Local Authority/Council/Water Companies agrees to adopt the road/sewers once the construction work has been completed and the bond is normally required by the Developer as part of the planning permission.
These bonds guarantee the completion of roads/sewers and if they are not completed to a certain timescale and standard the Local Authories/Council/Water Companies can call in the bonds to complete them properly.
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