LG Saxena questioned why contracts included clauses letting erring firms claim compensation, citing similar lapses in the Bharat Mandapam underpass.
BY PC Bureau
New Delhi, October 7, 2025 —Delhi Lieutenant Governor VK Saxena has ordered a comprehensive probe by the Anti-Corruption Branch (ACB) into the inordinate delay, cost escalation, and questionable arbitration payments linked to the Barapulla flyover extension project, a key infrastructure corridor connecting South and East Delhi that has remained incomplete for more than a decade.
The decision, taken on the recommendation of Chief Minister Rekha Gupta and the Expenditure Finance Committee (EFC) of the Delhi Cabinet, comes amid growing scrutiny over the financial and procedural irregularities surrounding the project, which was originally conceived to ease traffic congestion from Sarai Kale Khan to Mayur Vihar.
Decade-Long Delay Raises Red Flags
The Barapulla project, first launched under the previous Kejriwal government, has been delayed by over ten years, turning what was envisioned as a critical urban mobility lifeline into a case study of bureaucratic inertia and mismanagement.
During this period, the project’s cost has ballooned by hundreds of crores, while the Delhi government has had to pay arbitration penalties to private contractor Larsen & Toubro (L&T), despite prolonged non-completion of works.
Officials said that the ACB inquiry will examine why the project was allowed to drift for so long, who approved arbitration settlements without competence, and whether any officials or departments colluded or acted negligently in causing financial losses to the exchequer.
LG Flags ‘Fundamental Policy Issues’
In his written note approving the probe, LG Saxena observed that such extraordinary delays not only point to administrative lapses but also raise “fundamental policy concerns” in the way large public projects are contracted and monitored.
He questioned whether the inclusion of arbitration clauses in large government contracts was inadvertently giving private companies a legal mechanism to profit from delays — even when the fault lay with the contractor itself.
“The Barapulla case should prompt a relook at how arbitration clauses are drafted. Contractors must not be rewarded for their own inefficiency,” the LG reportedly noted.
Saxena also drew parallels with another project handled by the same contractor — the Bharat Mandapam underpass, which faced serious structural defects shortly before the G20 Summit. He remarked that the lapses in that case “could have caused national embarrassment” had they not been rectified in time.
Chief Minister’s Push for Accountability
The issue came up during an Expenditure Finance Committee (EFC) meeting held on July 28, 2025, chaired by Chief Minister and Finance Minister Rekha Gupta. The committee had unanimously concluded that the Barapulla project merited a thorough vigilance and anti-corruption inquiry.
The EFC’s resolution read:
“A thorough inquiry be initiated by the Anti-Corruption Branch, Directorate of Vigilance, GNCT of Delhi, for approval and acceptance of arbitration awards by authorities not competent to accept; delay in execution of the project and fixing responsibility of the erring officers/persons.”
Following this, the Public Works Department (PWD) referred the matter to the Directorate of Vigilance (DoV) for further action. Chief Minister Gupta later endorsed the move, remarking that “action may be taken as per the EFC’s decision.”
Subsequently, the DoV submitted a formal proposal to the Lt. Governor’s office, seeking approval to involve the ACB. The LG gave his assent and instructed the PWD to furnish all relevant files and documentation to the investigating agency.
Government Departments Under the Scanner
Sources indicated that several departments — including PWD, Revenue, and the Delhi Transport and Infrastructure Development Corporation (DTL) — may now come under scrutiny for procedural lapses and potential misuse of powers. Senior officials who handled arbitration approvals and project oversight during the period of delay could also face questioning.
“The focus will be on fixing accountability at every level — from project engineers and finance officers to higher departmental authorities who ignored red flags,” said a senior official familiar with the developments.
Policy Reforms on the Horizon
The LG has also instructed the Delhi government to review and tighten contractual and regulatory mechanisms for large-scale public projects. Departments have been directed to ensure that all regulatory and environmental clearances are in place before tendering construction work — a step meant to prevent legal disputes and time overruns.
“The Barapulla project has become symbolic of what goes wrong when approvals lag, accountability weakens, and oversight falters,” an EFC member said.
The ACB’s findings are expected to shape future guidelines on infrastructure governance, especially in preventing arbitration-linked financial drains on public resources.
READ: Bihar Poll Timing Puts Migrant Voters at Risk of Exclusion
Barapullah Elevated Road across river Yamuna (Phase-III) from Sarai Kale Khan to Mayur Vihar
Timeline
- Council of Ministers, GNCTD vide Cabinet Decision No. 1804 dated 06.09.2011 granted in- principal approval for extension of Barapullah Elevated Road across Yamuna (Phase-III) from Sarai Kale Khan to Mayur Vihar
- The proposal was subsequently approved in the 44th Governing Body Meeting of UTTIPEC, DDA chaired by Lt. Governor on 11.09.2013.
- Thereafter, Delhi Urban Art Commission & and Yamuna Standing Committee accepted the concept on 23.01.2014 and 27.05.2014 respectively.
- Administrative Approval & Expenditure Sanction of Rs. 1260.33 Cr. was accorded vide order dated 10.12.2014
- DDA also granted working permission on 27.04.2015
- The work was awarded to M/s Larsen & Toubro Ltd. The stipulated start date was 28.04.2015 with scheduled completion by 27.10.2015.
- However, as per departmental records, the overall progress till date is only 87% complete.
- The execution of project was delayed due to following reasons:
- Land Acquisition- Private land acquisition was delayed by over 8 years, possession of balance land handed over only by Mid-2024.
- Tree Cutting Permission- Forest clearance for tree cutting/transplantation was delayed since 2023, which halted progress of work in some sections and it took the LG to recall the file under ToBR 19(5) for grant of permission to cut trees.
READ: ‘No Regret’: Advocate Who Tried to Hurl Shoe at CJI Gavai Defends Action
The PWD vide order dated 03.11.2023 constituted an enquiry committee to explore the reasons for inordinate delay in completion of the project. The report was submitted by the Committee on 30.11.2023 with following findings:
PWD proactively pursued approvals and land acquisition
Delays mainly due to factors outside PWDs control (local administration and land acquisition process)
Land acquisition should ideally have taken 3 years; the extended delay was exceptional.
Tree cutting permission delays are also a significant issue after land possession.
- Meanwhile, M/s L&T Ltd. invoked three arbitration proceedings for cost escalation due to delays, raising claims totaling Rs. 750.02 Cr. Outcomes are as under:
First & second arbitration: Awards of Rs. 44.31 Cr. and Rs. 36.42 Cr. respectively were passed and duly paid by PWD (03.09.2021 and 31.03.2021–06.04.2021). L&T accepted the payments
Third arbitration (Case No. ARB/DK/85): Against a claim of Rs. 384 Cr., an award of Rs. 121.95 Cr. + interest + GST was passed on 08.05.2023. The Govt. Counsel and Arbitration Consultant recommended accepting the award. L&J Department also advised that there are no legal grounds to challenge the award. The Minister (PWD) approved action to be taken based on legal advice. The award was accepted by E-in Chief (PWD) on 26.03.2023. The deadline of payment was 06 days from the date of award i.e. 07.07.2023.
- A proposal was sent to FD on 12.06.2023 for budget allocation to make the payment. FD returned the file 18.07.2023 seeking clarifications from the Department, which was replied to by PWD on 20.08.23 & 18.10.2023. The FD returned the file with further observations on 08.09.2023 & 13.11.2023. The file was once again submitted to FD on 15.12.2023 however it was once again returned with other set of observations by FD on 01.02.2024. Further, several communications were held between PWD and FD but to no avail, w.r.t payment of amount of award in favour of M/s. Larsen & Toubro Ltd.
- M/s. L&T Ltd. filed an enforcement petition before Hon’ble High Court. Hon’ble High court ordered to submit the award amount by 28.08.2024. Due to non-payment of the amount by the due date Hon’ble High Court on 28.08.2024 attached three PWD Bank Accounts, halting payments and risking further project delays. State Bank of India transferred Rs. 170.27 Crore to Court Registry in compliance.
9 Thereafter, on the advice on FD a fresh Cabinet Note was approved on 01.11.2024 for acceptance of award i.e Rs. 121.925 Cr.+Interest+GST) and ex-post facto approval for payment of Rs. 170.27 Crore in compliance with court order.
