New Delhi: Flagging cost escalations in medical infrastructure projects, the Delhi government’s expenditure finance committee (EFC) has ordered a vigilance inquiry into an arbitration award linked to the Lok Nayak Jaya Prakash (LNJP) Hospital expansion, according to July 22 minutes of the meeting, seen by HT.
During the meeting chaired by chief minister Rekha Gupta, the committee alleged that the payment of an arbitration award worth ₹94.61 crore—including ₹82.44 crore as the award amount and ₹12.17 crore as interest—was one of the major reasons for the sharp escalation in project cost.
It directed the health department to submit a comprehensive report to the competent authority detailing the background of the dispute, the chronology of events, a legal opinion, the financial implications, and the approvals granted at different stages.
The EFC also ordered a vigilance inquiry to examine the decision-making process that led to acceptance of the arbitration award and release of the payment.
Construction on the new 25-floor Lok Nayak wing — three levels below the ground, and 22 above — began in November 2020 during the previous Aam Aadmi Party government with May 2023 deadline. However, the project missed multiple deadlines, with cost escalations as one of the reasons.
Meanwhile, the committee recommended that the revised proposal for the construction of a new medicine, maternity, and advanced paediatric centre at LNJP hospital, with a revised estimated cost of ₹1,268.85 crore, be placed before the cabinet. The project was originally sanctioned at ₹533.91 crore, while the revised proposal seeks ₹682.75 crore for the balance work.
{{/usCountry}}Meanwhile, the committee recommended that the revised proposal for the construction of a new medicine, maternity, and advanced paediatric centre at LNJP hospital, with a revised estimated cost of ₹1,268.85 crore, be placed before the cabinet. The project was originally sanctioned at ₹533.91 crore, while the revised proposal seeks ₹682.75 crore for the balance work.
{{/usCountry}}The EFC also approved revised estimates for projects in two other hospitals—Madipur Hospital at ₹466.50 crore and Jwalapuri Hospital at ₹484.04 crore. The balance work for the two projects is estimated at ₹203.60 crore and ₹223.53 crore, respectively. Both hospitals are around 65% complete, with more than ₹260 crore already spent on each project.
The EFC also approved revised estimates for two other hospital projects—Madipur Hospital at ₹466.50 crore and Jwalapuri Hospital at ₹484.04 crore.
The construction work in both the hospitals is around 65% complete, with more than ₹260 crore already spent on each project.
It made it clear that no further cost escalation would be considered for these projects.