Delhi L-G orders ACB probe into delay, cost overruns, arbitration penalty in Barapullah project

New Delhi, Oct 7 (PTI) Delhi Lieutenant-Governor V K Saxena has ordered a probe by the Anti-Corruption Branch (ACB) into "delay, cost overruns and arbitration payment" allegedly made to a private contractor in the Barapullah extension project, Raj Niwas officials said on Tuesday.

The role of previous ministers as well as officers of the Public Works Department (PWD) and Revenue and Delhi Transco Limited (DTL) is under the scanner, they said.

The L-G's order comes on the recommendations of Chief Minister Rekha Gupta, the officials said.

"The L-G has ordered an ACB probe into the more-than-a-decade delay in construction of the Barapullah flyover. This delay caused a loss of hundreds of crores of rupees to the Delhi government exchequer by way of cost overruns and payment of arbitration penalty to the private contractor Larsen & Toubro (L&T)," said an official of the L-G Office.

The L&T, when approached for its reaction over the issue, refused to comment.

A proposal for the probe was made by the Directorate of Vigilance, following a decision of the Expenditure Finance Committee headed by the Delhi chief minister.

The L-G, while approving the proposal, noted on file that the "extraordinary delay" in the project has raised some "fundamental policy issues" that must be addressed, the official said.

"The cascading impact of lapses of various agencies resulted in arbitration proceedings, forcing the government's hand to pay an additional Rs 255 crore on account of arbitration award, which was accepted by the department. The High Court, in fact, attached the account of PWD to enforce execution of the payment," the L-G noted.

The project, which was started in 2015 during the previous Aam Aadmi Party (AAP) government's tenure, is expected to be completed by June next year.

The issues related to the project were discussed at a meeting of the Expenditure Finance Committee on July 28 this year.

In the meeting, it was decided that a "thorough inquiry" by the ACB should be conducted regarding 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 and individuals, the official said.

In August, the BJP-led Delhi government directed the PWD to prepare a fresh and comprehensive proposal for cabinet approval to accommodate cost overruns in the Barapullah Phase-3 project.

The project, sanctioned in 2015 and initially estimated at Rs 1,260.63 crore, has already used up Rs 1,238.68 crore, and is expected to exceed its original budget. Hence, a fresh approval will be required, taking into account all the pending liabilities.

Officials said that the elevated road scheduled for completion in October 2017 was repeatedly delayed, and eventually the matter went into arbitration.

"The arbitration ruling favoured the contractor with an award of Rs 120 crore plus interest in addition to GST, totalling up to Rs 175 crore," a Delhi government official said.

When the payment was withheld, the private contractor approached the Delhi High Court to enforce the award.

The project got delayed over the years mainly due to issues related to land acquisition and tree-cutting permissions. Acquisition of private land for the project was delayed by eight years and it was finalised by mid-2024. The tree-cutting permission was also pending since 2023 that halted the progress of work in some sections.

An enquiry committee of PWD, in its report in November 2023, claimed that the delays were mainly due to factors outside PWD's control, as they were related to local administration and land acquisition process.

Meanwhile, the L&T invoked three arbitration proceedings for cost escalation due to delays, officials said.

The first and second arbitration awards to the tune of Rs 44.31 crore and Rs 36.42 crore, respectively, were passed and duly paid by the PWD in 2023, they said.

In the third arbitration, against a claim of Rs 384 crore, an award of Rs 121 crore plus GST and interest was passed on May 8, 2023, they said.

The then government accepted the award. Several communications were held between PWD and the finance department but to no avail with regard to the payment.

The L&T filed a petition before Delhi High Court that ordered to submit the award amount by August 28, 2024. The court attached three PWD bank accounts when the amount was not submitted by due date.

Later, an amount of Rs 170.27 crore was deposited with the court registry, officials added. PTI VIT VIT RUK RUK