The Hindu Business Line : 274 Central sector projects suffer cost, time overruns

AS many as 274 projects currently under implementation in the Central sector are suffering serious cost and time overruns that are delaying the benefits to be realised from these works that have employment and income generation implications.

According to a flash report prepared for the Prime Minister's Office (PMO), 65 of these projects are being monitored on a regular basis.

Some 43 projects are mega projects costing Rs 1,000 crore and above, while the rest cost Rs 100-1,000 crore.

For the 274 projects, the sanctioned outlay amounted to Rs 2,08,503.55 crore and the anticipated outlay is Rs 2,21,884.19 crore as on January 2004, with the cost overrun increasing by 6.4 per cent.

The biggest cost overrun is accounted for by projects in the power sector where the original cost estimates for 37 power projects estimated at Rs 55,254.39 crore is anticipated to rise up to Rs 70,679.03 crore.

The range of delay with respect to original date of commissioning is up to 164 months, according to the official document.

In the power sector, commissioning of the Dulhasti hydroelectric project of NHPC has reported additional slippage of seven months, with the delay being attributed to law and order problems.

The original cost of the project - Rs 183.45 crore when it was originally drawn in November 1990 - has shot up to Rs 4,227.92 crore when the project would be formally competed by July 2004.

The report said that in the petroleum sector, 30 projects had suffered cost escalation from the original sanctioned amount of Rs 38,250.58 crore to Rs 40,590.56 crore now.

The commissioning of three projects - `Refinery expansion-cum-modernisation of Chennai Petroleum Corporation Ltd', MS Quality Upgradation Facilities, Gujarat IOCL and IOR Scheme, Neelam of ONGC - have slipped by one, nine and eleven months respectively.

In the case of urban development projects, the biggest single project that has sustained massive cost overrun is the Delhi Metro Rapid Transit System Phase I, from a sanctioned sum of Rs 4,860 crore to a now-anticipated Rs 10,571 crore.

The project completion date has been extended from March 2005 to September 2005.

In the case of road transport and highways, 83 projects with a sanctioned outlay of Rs 21,399.66 crore now stand to suffer cost and time overrun with the anticipated outlay amounting to Rs 22,195.87 crore.

Similarly, in shipping and ports, six projects with a sanctioned outlay of Rs 1,882.03 crore suffer a revised cost estimate of Rs 1,929.38 crore.

The date of commissioning with respect to three packages in the road sector has slipped in the range of 1-3 months due to "unspecified reasons", the report said.

It added that two Golden Quadrilateral package - Satara-Kaigal, km 725-km 592.24 (NH-4), and Katraj Realignment, km 825- km 30 (NH-4) - have slipped by three months each.

In the Railways sector, 95 programmes with an initial sanctioned outlay of Rs 27,175.76 crore have a revised outlay of Rs 40,982.73 crore.

The Deoghar-Dumka New BG (Line doubling) project of Eastern Railway and Kharagpur-Bhubaneswar (Eastern Region) project have slipped by three months and nine months respectively.