448 infrastructure projects in India show cost overruns

Of the 1,739 projects worth Rs 150 crore and above, 448 reported cost overruns and 539 were delayed, according to a report

New Delhi: As many as 448 infrastructure projects, each worth Rs 150 crore or more, have been hit by cost overruns totalling more than Rs 4.02 lakh crore, according to a report.
The Ministry of Statistics and Programme Implementation monitors infrastructure projects worth Rs 150 crore and above. Of the 1,739 such projects, 448 reported cost overruns and 539 were delayed.

“Total original cost of implementation of the 1,739 projects was Rs 22,18,210.29 crore and their anticipated completion cost is likely to be Rs 26,20,618.44 crore, which reflects overall cost overruns of Rs 4,02,408.15 crore (18.14 per cent of original cost),” the ministry’s latest report for January 2021 said.

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The expenditure incurred on these projects till January 2021 is Rs 12,29,517.04 crore, which is 46.92 per cent of the anticipated cost of the projects. However, the report said the number of delayed projects decreased to 401 if delay is calculated on the basis of latest schedule of completion.

Further, for 941 projects neither the year of commissioning nor the tentative gestation period has been reported. Out of 539 delayed projects, 106 projects have overall delays in the range of 1-12 months, 131 projects have delays of 13-24 months, 187 projects reflect delays in the range of 25-60 months and 115 projects show delays of 61 months and above.

The average time overrun in these 539 delayed projects is 44.65 months. Reasons for time overruns as reported by various project implementing agencies include delay in land acquisition, delay in obtaining forest and environment clearances, and lack of infrastructure support and linkages.

Delay in tie-up for project financing, delay in finalisation of detailed engineering, change in scope, delay in tendering, ordering and equipment supply, and law and order problems, among others, are the other reasons, the report said.

The report also cited ‘state-wise lockdown due to COVID-19’ as a reason for delay in implementation of these projects. It has also been observed that project 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.