344 Infrastructure Projects Show Cost Overruns Of Rs 3.16 Lakh Crore
Pedestrians walk past as one of two towers stands under construction at Lodha The Park, a luxury residential project developed by Lodha Developers Ltd., in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

344 Infrastructure Projects Show Cost Overruns Of Rs 3.16 Lakh Crore


As many as 344 infrastructure projects, each worth Rs 150 crore or more, have shown cost overruns to the tune of over Rs 3.16 lakh crore owing to delays and other reasons, a report said.

The total original cost of implementation of the 1,424 projects was about Rs 18.17 lakh crore and their anticipated completion cost is likely to be Rs 21.34 lakh crore, the Ministry of Statistics and Programme Implementation’s latest report for December 2018 said. That reflects overall cost overruns of about Rs 3.16 lakh crore or 17.40 percent of the original cost.

The ministry monitors infrastructure projects worth Rs 150 crore and above. Of these 1,424 projects, 344 reported cost overruns and 384 time escalation.

According to the report, the expenditure incurred on these projects till December 2018 was Rs 8.01 lakh crore, which is 37.82 percent of the anticipated cost.

The number of delayed projects decreased to 326 if delay is calculated on the basis of latest schedule of completion, it said.

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For 686 projects, neither the year of commissioning nor the tentative gestation period has been reported.

Out of 384 delayed projects, 113 projects have overall delay in the range of 1 to 12 months, 61 are delayed by 13 to 24 months, 101 reflect delay of 25 to 60 months and 109 projects show 61 months and above delay. The average time overrun in these 384 delayed projects is 44.78 months.

The 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, which suggests that time and cost overrun figures are underreported.

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