CMDA Seeks Reimbursement of ₹930 Crore Spent on Chennai Outer Ring Road Land Acquisition

The Chennai Metropolitan Development Authority has escalated its long-pending demand for reimbursement of nearly ₹930 crore spent on land acquisition for the city’s Outer Ring Road project, highlighting growing financial strain on its urban development plans. The issue has now been formally taken up with the Housing and Urban Development Department after years of inconclusive discussions with the state highways department.

The dispute dates back several decades. The 62 km Outer Ring Road was first envisioned in the 1975 Master Plan as part of a three ring road system for the then Madras city. Initially planned under a build operate transfer model, the project was expected to be executed by private concessionaires who would recover costs through toll collections. However, the BOT model failed to take off.

In the 1990s, CMDA stepped in to acquire land for the project, supported by multiple government orders issued between 1993 and 1998. These orders allowed CMDA to recover acquisition costs from the eventual project operator. Over time, the project came under the control of the Highways department, with the Tamil Nadu Road Development Company appointed as managing associate and tolling introduced on the corridor.

Despite this transition, CMDA’s expenditure on land acquisition was never factored into the tolling or repayment framework. By 2016, the authority had already spent about ₹452 crore. This figure rose sharply to nearly ₹930 crore by June 2025, according to official records. Sources indicate that ongoing litigation over compensation, including cases pending before the Supreme Court, could eventually push total liabilities beyond ₹2,100 crore.

Multiple empowered committee meetings held between 2016 and 2022 recommended that CMDA transfer the acquired land and formally submit reimbursement claims. However, officials say the Highways department has been reluctant to act, particularly after the enactment of the Tamil Nadu State Highways Authority Act in 2024 and the transfer of the ORR asset to TANSHA in April 2025, reportedly without CMDA’s consultation.

The financial dispute comes at a critical time as the state accelerates monetisation and densification along the ORR corridor. TIDEL Park Limited has already received entry permission for IT park projects at Malayambakkam, Mannivakkam and Vandalur, while CMDA is finalising a detailed development plan for a 126 sq km influence zone along the corridor.