Tamil Nadu Cancels ₹2,100 Crore Highway Project Over Fraud Concerns, June 10

Tamil Nadu’s government has decided to cancel a ₹2,100 crore four-lane elevated highway project connecting Thiruvanmiyur to Uthandi after discovering contractor selection irregularities and inflated project costs. The 14.4-kilometre road was meant to reduce traffic congestion on the Chennai-Puducherry East Coast Road. Work began in August 2025 after the then-Chief Minister laid the foundation stone, but the government now faces a choice between scrapping the project entirely or issuing a new tender.

Why the Contract Was Cancelled

The Tamil Nadu government awarded the contract to Hyderabad-based KNR Constructions in August 2025. However, officials later raised concerns about how the contractor was selected and how the project cost was calculated. The State Highways Department confirmed that a detailed project report cost ₹52 lakh to prepare, and the final budget included expenses for land surveys, electrical poles, and water pipes, which increased the total amount. Opposition leader Anbu Mani Ramadoss alleged that a ₹1,400 crore project was inflated to ₹2,100 crore, suggesting ₹700 crore in potential corruption.

Government Weighs Next Steps

Senior officials are now deciding whether to abandon the project completely or invite fresh bids from contractors. The project is structured as a public-private partnership, with the government covering 40 percent of costs and the contractor covering 60 percent. State Highways Department officials stated that the cost increase reflected genuine project requirements, but the government is still evaluating alternatives. Ramadoss called for action against officials involved and demanded a CBI investigation into the matter.

Impact on Traffic Relief

The road was designed to cut travel time between Thiruvanmiyur and Uthandi from over one hour to 25 minutes. Residents have faced severe congestion on the East Coast Road for years. Infrastructure improvements in the region are critical for property values and economic growth. The cancellation delays relief for commuters, though the government may pursue the project through a transparent re-tendering process if it decides to proceed.

Broader Environmental and Infrastructure Concerns

The Uthandi area faces separate environmental challenges. A ₹91 crore flood mitigation drain project at nearby Uthandi has been suspended by the National Green Tribunal over concerns about sewage pollution and ecological damage. These overlapping infrastructure projects highlight the need for better planning and environmental review before government spending on major works.

Final Thoughts

Tamil Nadu’s decision to cancel the ₹2,100 crore highway contract signals stricter scrutiny of contractor selection and project costs. The government must now choose between re-tendering or shelving the project, with commuters waiting for relief from severe traffic congestion on the East Coast Road.

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