New Delhi: The Delhi government has directed the Public Works Department (PWD) to prepare a fresh, comprehensive proposal for Cabinet approval to accommodate cost overruns in the long-delayed Barapullah Phase-3 project, officials said on Wednesday.

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

At a meeting of the expenditure and finance committee held on July 28, Chief Minister Rekha Gupta approved this proposal along with a proposal for payment of arbitration award.

"The PWD shall prepare a comprehensive proposal for the Cabinet by taking into account all the pending liabilities, including therein arbitration awards, etc., for seeking the approval of the lieutenant governor for the revised project cost, as the project was earlier sanctioned with the approval of the L-G," the minutes of the meeting read.

The government is also planning to take the opinion of the law department with regard to the arbitration award in the project and then take a final decision.

"The PWD shall take the opinion of the law department as to whether the case of the grant of the arbitration award was fit for approval and whether an appeal can be filed now," officials said.

According to the government, 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, plus GST, totalling up to Rs 175 crore. When the payment was withheld, the company approached the Delhi High Court to enforce the award," the minutes read.

According to officials, the project is currently around 87 per cent complete.

For the financial year 2025–26, Rs 150 crore has been allocated, of which Rs 86.43 crore had been spent by June.

The chief minister has also been informed that currently the project is 87 percent complete, and due to the hindrance of tree-felling permission pending with the forest department, the work is stalled.