Economy

Infra projects’ cost overrun crosses ₹4-lakh crore mark

PTI New Delhi | Updated on January 01, 2020 Published on January 01, 2020

As many as 388 infrastructure projects, each worth ₹150 crore or more, have been hit by cost overruns of more than ₹4-lakh crore owing to delays and other reasons, according to a report.

The Ministry of Statistics and Programme Implementation monitors infrastructure projects worth ₹150 crore and above.

Of such 1,636 projects, 388 projects reported cost overruns and 563 projects time escalation.

“Total original cost of implementation of the 1,636 projects was ₹19,52,524.85 crore and their anticipated completion cost is likely to be ₹23,53,108.80 crore, which reflects overall cost overruns of ₹4,00,583.95 crore (20.52 per cent of original cost),” the Ministry’s latest report for October 2019 said.

According to the report, the expenditure incurred on these projects till October 2019 is ₹10.32-lakh crore, which is 43.86 per cent of the anticipated cost of the projects.

However, it said the number of delayed projects decreases to 490 if delay is calculated on the basis of the latest schedule of completion.

Further, it said that for 720 projects, neither the year of commissioning nor the tentative gestation period has been reported.

Out of the 563 delayed projects, 185 projects have overall delay in the range of 1 to 12 months, 123 projects in the range of 13 to 24 months, 136 projects reflect delay in the range of 25 to 60 months and 119 projects show delay of 61 months and above.

The average time overrun in these 563 delayed projects is 38.74 months.

The brief reasons for time overruns, as reported by various project implementing agencies, are delays in land acquisition, forest clearance and supply of equipment.

Besides, there are other reasons like fund constraints, geological surprises, geo-mining conditions, slow progress in civil works, shortage of labour, inadequate mobilisation by the contractor, Maoist problems, court cases, contractual issues, ROU/ROW (right of use/right of way) problems, law and order situation, among others, the report said.

It also observed that project agencies are not reporting revised cost estimates and commissioning schedules for many projects, indicating that time or cost overrun figures are under-reported.

Published on January 01, 2020
  1. Comments will be moderated by The Hindu Business Line editorial team.
  2. Comments that are abusive, personal, incendiary or irrelevant cannot be published.
  3. Please write complete sentences. Do not type comments in all capital letters, or in all lower case letters, or using abbreviated text. (example: u cannot substitute for you, d is not 'the', n is not 'and').
  4. We may remove hyperlinks within comments.
  5. Please use a genuine email ID and provide your name, to avoid rejection.