Baalu is one of the prominent leaders to work towards the implementation of Sethusamudram Shipping Canal Project. He was handling it during his tenure as the minister of Shipping, Road Transport and Highways. The project proposes linking the Palk Bay and the Gulf of Mannar between India and Sri Lanka by creating a shipping canal through the shallow sea sometimes called Setu Samudram, and through the chain of islands variously known as Ram Sethu or the Adam's Bridge. A few organisations are opposing the dredging of Ramasethu on religious, environmental and economical grounds. Many of these parties and organisations support implementation of this project using one of the five alternative alignments considered earlier without damaging the structure considered sacred by Hindus. During 2006, the Supreme Court Baalu quashed a case requesting a ban on the project and issues notices to Baalu and the environment ministry. With 22 km of dredging remaining, the project is held from March 2010 by a Supreme Court order seeking the Central Government to clarify the status of the bridge as a national monument. He was recruited as a minister in 2009 during the second term on UPA coalition government as it was reported that the Prime Minister was unhappy with Baalu over the corruption charges in Sethusamudram project. But he continued as the head of the DMK parliamentary party and also part of various central committees.