New Delhi: The Delhi government is expected to convene a Cabinet meeting on Tuesday to deliberate on the arbitration-related complications in the Barapullah Phase-3 elevated road project, which reportedly cost the exchequer a loss of ₹300 crore, according to senior government sources.
The issue assumes greater significance after Public Works Department (PWD) Minister Parvesh Verma, in June, announced the elimination of arbitration clauses from PWD’s future contracts. This pivotal decision mandates that any disputes between the department and private contractors will now be settled exclusively in courts, replacing the earlier arbitration route.
“One of the most significant cases, the Barapullah Phase-3 project, will likely be a key agenda item in the Cabinet,” a source said.
The original intent of arbitration clauses was to expedite dispute resolution and avoid prolonged litigation. However, officials say that in practice, arbitration has resulted in substantial financial losses for the government.
In the Barapullah Phase-3 dispute, the PWD did not challenge an arbitration award, which allowed the private contractor to walk away with ₹300 crore, Minister Verma said.
Adding to the controversy, Delhi Lt Governor V.K. Saxena had earlier stated that the government awarded ₹1,326.3 crore for the Barapullah Phase-3 project, despite the original tender being ₹964 crore, underscoring a massive cost overrun.
The project, already delayed, is now awaiting tree-felling permissions, after which PWD officials claim the remaining work could be completed within six months.
PWD has been embroiled in multiple legal disputes in recent years, mainly due to project delays and surging construction costs, which have often exceeded original estimates—adding further financial burden on the government.
The Cabinet’s deliberation may lay the groundwork for long-term reforms in contract structuring and legal recourse policies in Delhi’s public infrastructure sector.
