443 infra projects hit by cost overrun of ₹4.92 lakh crore in Feb

As many as 443 infrastructure projects, each entailing an investment of ₹150 crore or above, were hit by a cost overrun of more than ₹4.92 lakh crore in February 2024, an official report stated.

According to the Ministry of Statistics and Programme Implementation (MoSPI), which monitors infrastructure projects worth ₹150 crore and above, out of 1,902 projects, 443 reported cost overruns and 764 projects were delayed.

"Total original cost of implementation of the 1,902 projects was ₹27,08,030.44 crore, and their anticipated completion cost is likely to be ₹32,00,507.55 crore, which reflects overall cost overruns of ₹4,92,477.11 crore (18.19 per cent of original cost)," the Ministry's latest report for February 2024 said.

According to the report, the expenditure incurred on these projects till February 2024 is ₹16,76,739 crore, which is 52.39 per cent of the anticipated cost of the projects.

“However, the number of delayed projects decreases to 568 if the delay is calculated on the basis of the latest schedule of completion,” it added.

Further, it said that for 389 projects, neither the year of commissioning nor the tentative gestation period has been reported.

Out of the 764 delayed projects, 188 have overall delays in the range of 1-12 months, 185 have been delayed for 13-24 months, 275 projects for 25-60 months, and 116 projects have been delayed for more than 60 months.

The average time overrun in these 764 delayed projects is 36.27 months.

Reasons for time overrun, as reported by project implementing agencies, include delay in land acquisition, obtaining forest and environment clearances, and lack of infrastructure support and linkages.

Delays in tie-up for project financing, finalisation of detailed engineering, change in scope, tendering, ordering and equipment supply, and law and order problems are among other reasons.

The report also cited state-wise lockdowns due to Covid-19 (imposed in 2020 and 2021) as a reason for the delay in implementation of these projects.

“It has also been observed that project executing agencies are not reporting revised cost estimates and commissioning schedules for many projects, which suggests that time/cost overrun figures are under-reported,” it added.

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