360 Infrastructure Projects Show Cost Overruns Of Rs 3.8 Lakh Crore
Traffic moves along National Highway 7 as road construction takes place in Bangalore, India, (Photographer: Namas Bhojani/Bloomberg)

360 Infrastructure Projects Show Cost Overruns Of Rs 3.8 Lakh Crore

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As many as 360 infrastructure projects, each worth Rs 150 crore or more, have shown cost overruns to the tune of over Rs 3.88 lakh crore owing to delays and other reasons, government data showed.

The Ministry of Statistics and Programme Implementation monitors infrastructure projects worth Rs 150 crore and above. Of these 1,608 projects, 360 reported cost overruns and 550 time escalation.

"Total original cost of implementation of the 1608 projects was Rs 19,17,796.07 crore and their anticipated completion cost is likely to be Rs 23,05,860.33 crore, which reflects overall cost overruns of Rs 3,88,064.26 crore (20.23 percent of original cost)," the ministry's latest report for June 2019 said.

According to the report, expenditure incurred on these projects till June 2019 stood at Rs 9.35 lakh crore, which is 40.55 percent of the anticipated cost of the projects.

However, it said the number of delayed projects decreases to 474 if delay is calculated on the basis of latest schedule of completion.

Further, it said that for 644 projects neither the year of commissioning nor the tentative gestation period has been reported.

Out of 550 delayed projects, 182 projects have overall delay in the range of 1 to 12 months, 119 projects 13 to 24 months, 133 projects reflect delay in the range of 25 to 60 months and 116 projects show delay of 61 months and above.

The average time overrun in these 550 delayed projects is 39.24 months.

The brief 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/cost overrun figures are under-reported.

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