Chennai-Bengaluru Expressway: NHAI's HAM Contract Crisis

The Missing Link: One Package Halts a 262‑km Corridor

The Chennai–Bengaluru Expressway is more than 90% physically complete. Yet the 262.4‑km greenfield corridor cannot open as an integrated system, and the reason is not an engineering failure. It is a contract failure concentrated in one 25.5‑km Hybrid Annuity Mode package between Arakkonam and Kancheepuram in Tamil Nadu.

The Financial Unraveling and Legal Standoff

Construction on that package stopped in May 2025 after the concessionaire—DP Jain Bangalore–Chennai Expressways Pvt. Ltd., a special‑purpose vehicle—encountered financial constraints.

The National Highways Authority of India (NHAI) issued an intention‑to‑terminate notice on November 10, 2025. A lender consortium comprising Bank of Maharashtra, UCO Bank, and Central Bank of India then moved to exercise its contractual right to substitute the concessionaire.

DP Jain challenged the termination in the Madras High Court, which has directed status quo and reserved its order.

HAM’s Lender‑Substitution Mechanism Faces Its Biggest Test

What is unfolding is not an ordinary project delay. It is a live stress test of HAM’s lender‑substitution mechanism—a recovery pathway designed to preserve project continuity without discarding the entire concession agreement, NHAI’s construction grants already disbursed, and the banks’ outstanding debt exposure.

The mechanism has never been tested at this scale on a corridor of such strategic importance.

Two Parallel Critical Paths: Legal and Physical

Any completion timeline now depends on two unresolved paths.

The legal path: the Madras High Court must rule on whether NHAI can terminate or must permit substitution. A replacement concessionaire would then need to be identified, financed, and mobilised.

The physical path: extra‑high‑tension tower relocation still requires coordinated line closures involving Power Grid Corporation of India (PGCIL) and Tantransco—a matter already raised with the Tamil Nadu government.

Neither path can be bypassed, and neither is yet resolved.

Murky Progress Data Compounds the Uncertainty

Progress reporting is inconsistent. Parliamentary data places the package at 53% completion, while a lender bid‑process document from June 2026 records 69.66%.

NHAI has not published a component‑level breakdown—earthwork, structures, pavement, utilities, toll systems—that would allow independent verification of what has actually been built, what has deteriorated during the stoppage, and what remains.

A Conditional Six‑Month Estimate and a History of Missed Deadlines

NHAI estimates the package could be finished within six months once legal clearance permits work to resume. That estimate hinges on:

- Court resolution
- Concessionaire substitution
- Utility clearance
- Site access
- Independent condition surveying

None of these have occurred. Assigning a new opening date by adding six months to the calendar would repeat the pattern of four missed deadlines between March 2024 and July 2026.

The Broader Stakes: HAM’s Credibility and Unreconciled Costs

The commercial impact reaches far beyond this one package. NHAI has deployed HAM as its dominant contracting mode. If the substitution mechanism cannot recover a strategically critical corridor efficiently—bogged down between court proceedings, utility coordination gaps, and unreconciled cost data—the model’s credibility for future private participation weakens.

The stalled package’s cost itself appears under three different figures, sourced differently and none reconciled publicly:

- ₹1,155.49 crore (Lok Sabha)
- ₹1,057.01 crore (lender document)
- ₹855.86 crore (NHAI estimate)

A Precedent in the Making

For contractors and lenders watching this case, the precedent being set will influence risk pricing across India’s highway programme. Lender substitution was supposed to be the safety valve. The Madras High Court’s pending order will determine whether it works as designed.