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Delays in key Central sector projects have led to steep cost over-runs, which have been pegged at ₹1 lakh crore, according to industry chamber Assocham’s estimates.
“Till March 2013, the cost over-runs had been worked out at ₹94,800 crore in about 285 Central projects. Assuming about 8-10 per cent annual accretion, the over-runs would easily exceed ₹1 lakh crore by March, 2014,” the industry chamber said in a report released on Wednesday.
Among the various sectors, the Railways is estimated to have been most affected with maximum escalation in costs which were up nearly three times to ₹73,500 crore, from the original estimates of ₹27,900 crore in March 2013, the report said.
Other sectors such as power, petroleum and steel have also witnessed steep rise in costs due to delays. “We would urge Prime Minister Narendra Modi to personally take note of such projects while the PMO should regularly monitor these projects. As there is a demand slowdown in the economy, revival in the investment cycle should be led by Central sector projects,” Assocham President Rana Kapoor said.
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