Economy

1 out of 5 infra projects faces delay of over 5 years

Shishir Sinha New Delhi | Updated on October 25, 2021

Centre warns of ₹4.30-lakh cr cost-overrun amounting to 78% of capital expenditure

Flagging delays in infrastructure projects, the Centre has issued a strict advisory to different ministries and departments to reduce delays and cost overruns that have reached a staggering ₹4.30-lakh crore in 1,670 central sector projects.

The original cost of implementation of these projects was about ₹21.66-lakh crore, while the present anticipated completion cost is around ₹26-lakh crore, reflecting a cost overrun that amounts to almost 78 per cent of capital expenditure proposed this fiscal.

Key sectors hit

A flash report by Ministry of Statistics and Programme Implementation (MOSPI) says one out of every five infrastructure projects has a delay of over five years. The 1,670 projects pertain to 25 sectors, including road, railways, petroleum, power, coal, telecom, fertiliser and others. “Of 1,670 projects, 563 projects are delayed with respect to their original schedules and 72 have reported additional delays vis-à-vis their date of completion reported in the previous month,” the report said, adding that of the 72 projects, 20 are mega ones costing ₹1,000 crore and above.

While the implementation of PM Gatishakti-National Master plan is expected to expedite the projects, the Ministry has not minced words while cautioning different departments to cut out the delays. “The administrative ministry concerned may like to review the projects to avoid further cost and time overruns, firm-up milestones and revised cost estimates and commissioning schedule, if the same have not been revised and lapsed,” the report said, noting that project agencies are not reporting the revised cost estimates and commissioning schedules for many projects.

Reasons for delays

The report listed 15 reasons for the delay which include lockdowns in States due to Covid, law and order problems, delays in land acquisition, obtaining forest/environment clearance, contractual issues and inadequate manpower among others. Another main reason is lack of co-ordination among various central ministries and departments and with State governments and local bodies.

It also highlighted problems in preparing the progress report. “The Online Computerised Monitoring System (OCMS) of this (Statistics) Ministry envisages monitoring of milestones of the various infrastructure projects. The project authorities have been regularly requested to enter the list of milestones for each project, to facilitate better monitoring. However, not all the project agencies are reporting/providing the list of milestones,” it said.

 

Published on October 25, 2021

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