A letter from the Prime Minister’s office has prompted the urban development ministry to ask the Bengal government why it allowed a 70 per cent rise in cost for setting up the Parama flyover, casting a shadow on the project.

Work on the flyover, which will connect the Bypass with Park Circus once ready, started in 2010. The project has already missed two deadlines.

“Now there is fresh trouble.... As it is a JNNURM project, the Centre will not release funds unless it is satisfied with the explanation on cost escalation,” said an official in the state urban development department.

The Centre, acting on a letter from Trinamul MP Somen Mitra, has pulled up the Bengal government for allowing the rise in cost bypassing a “no cost-escalation clause” in the tender document, the official pointed out.

The original cost of the project — approved under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) — was Rs 317 crore.

Earlier this year, the urban development department approved a cost escalation of about Rs 226 crore on the grounds that the company executing the project — HCC — was finding it difficult to carry out work because of a rise in the prices of steel and other construction materials.

Sources said the Calcutta Metropolitan Development Authority, which is supervising the project on behalf of the government, approved the escalation despite objections from several officials (see chart).

“The proposal (for escalation) will have to be cleared by the state cabinet before it is forwarded to the finance department,” said a source.

While the process is pending, the letter from the director of the urban development ministry, Dinesh Kumar, has caught the state government unawares.

“We had written to the Bengal chief secretary on May 31, seeking a detailed report on the issue. We are yet to get a reply. A reminder was sent a fortnight ago, a reply is still awaited,” an urban development ministry official in Delhi told The Telegraph.

According to him, the PMO has sought a reply from the ministry based on a letter written by the Trinamul MP, Somen Mitra, alleging that the urban development department was trying to extend “undue favour” to the agency carrying out the project.

“The Centre has every right to know about the escalation in the project cost, as the Centre bears 35 per cent of the cost for JNNURM projects,” the official added.

The question mark over cost escalation will hit the project hard at a time the Centre is holding back the fourth instalment of its share, nearly Rs 28 crore.

The flyover between Park Circus and Parama island is critical for smooth flow of traffic between the eastern part of the city – which has witnessed exponential growth in population -- and its centre. Over the last three years, since the project started, Calcuttans have borne the pain – due to work-in-progress at the stretch – hoping for a better future.

“There is little hope that the Centre will allow the huge cost escalation, which means there is uncertainty over the project,” said another official.

According to officials, the tug of war for cost escalation between HCC and KMDA started during the Left regime, but the demand was turned down. The proposal resurfaced at KMDA office again after the change of guard in Writers’, but the then CEO of the agency, Vivek Bhardwaj, refused to consider it citing the government rules.

“The same proposal was approved in January this year soon after Bhardwaj was removed from KMDA,” said an official, while adding that the meeting to give a go ahead to cost escalation was held a day after Bhardwaj’s last day in office.

Though some officers said that the demand for cost escalation may have been justified, its extent -- 70 per cent – raised several questions, which resulted in the missive from Delhi and created uncertainty over the future of the project.