Economy

Stalled infrastructure projects will need ₹5.7 lakh crore more

Shishir Sinha New Delhi | Updated on November 25, 2017 Published on November 17, 2014

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83% projects face delays: Plan panel



The Planning Commission has told Prime Minister Narendra Modi that additional funds of ₹5.7 lakh crore will be required to complete 738 central projects in various infrastructure sectors. Almost ₹5.6 lakh crore has already been expended on these projects.

Making a presentation on Infrastructure Targets & Performance for the current fiscal year to the Prime Minister on November 5, the Commission painted a dismal picture, stating that that 83 per cent of the 738 projects monitored face delays of three months to 12 years. This has resulted in cost overruns of ₹1.89 lakh crore.

The worst affected sector is the Railways, with 274 out of 289 projects delayed due to funds constraints (see table). Road, power, petroleum, coal and shipping projects, among others, also face delays and cost overruns.

While 252 of these 738 central projects are of ₹1,000 crore or more, the rest are in the ₹150 crore-₹1,000 crore range.

The Commission has cited specific and generic causes for the delay, including land acquisition, environment, law and order issues, as well as inadequate diligence in project preparation.

To overcome the delays and cost overruns, the Commission has proposed efficiency parameters, including having a matrix based on key operational indices, outlining the performance in 2013-14 and targets for 2014-15.

“Even 10 per cent efficiency would mean savings of ₹57,000 crore,” it said. The panel has also suggested more rigorous monitoring of projects.

The Government has already started work on easing land acquisition. On Monday, while speaking at the Citi Investor Summit, Finance Minister Arun Jaitley termed the Land Acquisition Law as the ‘best bottleneck’ for infrastructure. Jaitley added that he is in discussions with the Congress party and has made some suggestions on bringing about changes in that law.

“I have no difficulty in terms of compensating farmers for loss of land, but the procedures … are extremely prolonged and are going to delay acquisition. It will be quite nightmarish for infrastructure. Those procedures have to be taken care of,” he declared.

The Commission says that the performance of the infrastructure sectors in the April-October period presents a mixed picture. Coal production has achieved half of its annual target of 630.25 mt, and the power sector managed to add 54 per cent of its annual capacity (17,830 MW) and 61 per cent of its generation targets (1,023 billion units).

But in the roads sector, only 40 per cent of the target in awarding road lengths was achieved and only 31 per cent project completion has been achieved.

Published on November 17, 2014
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