Sources said government was totally unhappy with the contractor for "unexplained delays" in the project which as per original agreement was to be completed before the commencement of the Commonwealth Games in October, 2010.
"The government is seriously considering slapping financial penalty on the contractor as it has missed series of deadlines in the last three years. We cannot tolerate any further delay," top sources said.
The indication of imposing penalty was also given to top officials of Engineers India Ltd (EIL) at a meeting presided by Chief Minister Sheila Dikshit who also expressed her "displeasure" about the delays in completing the project.
Dikshit told the officials to soon finish the remaining work as delay in the project was causing losses to traders and inconvenience to public.
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"The Chief Minister was very unhappy with the slow progress of work and told EIL to try and finish work as soon as possible," said an official, who attended the meeting.
The meeting was attended by a number of top officials of the government including Chief Secretary D M Spolia.
Top NDMC officials also expressed displeasure over the contractor extending the deadline at regular intervals.