A construction site in India (Photographer: Prashanth Vishwanathan/Bloomberg) 

340 Infrastructure Projects Show Cost Overruns Of Rs 3.3 Lakh Crore, Says Government 

As many as 340 infrastructure projects, each worth at least Rs 150 crore, have shown cost overruns to the tune of over Rs 3.3 lakh crore owing to delays and other reasons, a report said.

“Total original cost of implementation of the 1,405 projects was Rs 18,09,681.47 crore and their anticipated completion cost is likely to be Rs 21,39,924.38 crore, which reflects overall cost overruns of Rs 3,30,242.91 crore (18.25 percent of original cost),” according to the Ministry of Statistics and Programme Implementation’s latest report for March 2019.

The ministry monitors infrastructure projects worth Rs 150 crore and above. Of these 1,405 projects, 340 reported cost overruns, while time escalations were reported in 381.

According to the report, the expenditure incurred on these projects till March 2019 is Rs 8,53,680.47 crore, which is 39.89 percent of the anticipated cost of the projects.

However, it said the number of delayed projects falls to 300 if delay is calculated on the basis of latest schedule of completion.

For 705 projects, neither the year of commissioning nor the tentative gestation period has been reported.

Out of 381 delayed projects, 117 projects have overall delay in the range of 1 to 12 months, 63 are delayed by 13 to 24 months, 103 reflect delay of 25 to 60 months and 98 projects show 61 months and above delay.

The average time overrun in these 381 delayed projects is 43.17 months.

Reasons For Delays

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

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, 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, which suggests that time/cost overrun figures are under-reported.

Bloomberg Quint

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