NHAI's Bengaluru-Chennai package stalls at 53%

The National Highways Authority of India (NHAI) now carries a completion risk it cannot unilaterally resolve. The Arakkonam-Kanchipuram package of the Bengaluru-Chennai Expressway has been frozen at 53% physical progress since May 2025, when the concessionaire stopped work citing financial constraints.

Union Minister for Road Transport and Highways Nitin Gadkari confirmed the status in the Lok Sabha, replying to Bengaluru Central MP PC Mohan, even as the rest of the 262-km greenfield corridor sits in its final stretch.

Legal and Financial Freeze

NHAI has moved to terminate the contract, but the Madras High Court has directed status quo, with orders reserved. The matter is sub judice, and senior lenders are working to replace the concessionaire — a lender-led substitution that is becoming the de facto resolution route for stressed hybrid annuity assets.

The commercial reality is that termination is legally frozen while the asset continues to erode value.

The Utility Clearance Bottleneck

The physical blocker is equally instructive. Shifting of high-tension transmission towers owned by Power Grid Corporation of India Ltd and Tamil Nadu Transmission Corporation Ltd (TANTRANSCO) remains pending for want of a line-closure approval from TANTRANSCO.

NHAI has escalated the issue to the Tamil Nadu Government. Land acquisition, railway power blocks and utility relocation have largely been cleared, leaving an institutional approval — not civil works — as the binding constraint.

Corridor Progress and Sector Implications

The rest of the corridor tells a different story:

- Karnataka: Three packages are complete.
- Andhra Pradesh: Byreddypalli-Bangarupalem package is at 93%, due by October 30, 2026.
- Tamil Nadu: Other packages are at 90–99%, targeted between August 31 and October 31, 2026.

Gadkari reiterated that the project is being implemented with 100% Central Government funding — though the distress is playing out through a private concessionaire and senior lenders, a reminder that central funding and private delivery coexist in hybrid annuity structures.

For the sector, the signal is structural. A single stressed special-purpose vehicle can hold an otherwise complete corridor hostage, and resolution is shifting from the authority to lenders exercising substitution rights.

The Bengaluru-Chennai experience shows that in package-based hybrid annuity delivery, end-to-end commissioning is only as strong as the weakest concessionaire — and that utility coordination, not contractor capability, is now the last-mile risk.