State loses ₹100 crore as governmental lapses delay MC Road upgrade and trigger multi-crore payout to contractor.
Kottayam (Kerala): Lapses by two successive governments during the Main Central (MC) Road upgrade have resulted in a loss of over ₹100 crore to the state exchequer.
Initiated under the Left Democratic Front (LDF) government in 2000 as part of Kerala State Transport Project (KSTP) initiatives, the project degenerated into corruption across the Antony, Oommen Chandy and V S Achuthanandan administrations.
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The contract value to upgrade 127 kilometres of road was fixed at ₹215 crore. However, work remained incomplete by the initial deadline of December 2000. Despite a one-year extension, land acquisition stalled due to bureaucratic delays across the Public Works, Revenue and Finance departments.
The governments subsequently attempted to shift the blame onto the contractor, the PATI-BEL Consortium. In 2006, the Oommen Chandy government decided to seek compensation from PATI-BEL.
The VS Achuthanandan government continued these proceedings. Following the suicide of Lee See Been, Project Manager for the PATI-BEL Consortium, on November 13, 2006, the consortium issued a formal letter asserting that failures by various departments, including the Public Works Department, caused the land acquisition delays, and announced legal action.
The consortium demanded ₹96 crore in damages. By December 2007, legal reviews acknowledged merit in their claims, forcing the government to reach a compromise. The compensation was fixed at ₹35 crore. Current Chief Election Commissioner Gyanesh Kumar was serving as the Public Works Secretary at the time.
The government was also forced to renew the original contract and enter into a supplementary agreement, approving a 72.5 per cent cost escalation that added ₹55.96 crore to the project. Along with other expenses, a total of ₹60.75 crore was paid to the consortium. Consequently, completing the remaining work required an additional sum of nearly ₹100 crore.
Published: 06 Oct 2026, 11:48 am IST
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