441 Infrastructure Projects Show Cost Overruns Of Rs 4.35 Lakh Crore
Workers prepare reinforcing steel while working on a construction project in Ghaziabad, India. (Photographer: T. Narayan/Bloomberg)

441 Infrastructure Projects Show Cost Overruns Of Rs 4.35 Lakh Crore

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As many as 441 infrastructure projects, each worth Rs 150 crore or more, have been hit by cost overruns of over Rs 4.35 lakh crore owing to delays and other reasons, according to a report.

The Ministry of Statistics and Programme Implementation monitors infrastructure projects worth Rs 150 crore and above. Of the 1,661 such projects, 441 reported cost overruns and 539 time escalation.

"Total original cost of implementation of the 1,661 projects was Rs 20,90,931.27 crore and their anticipated completion cost is likely to be Rs 25,26,063.76 crore, which reflects overall cost overruns of Rs 4,35,132.49 crore (20.81% of original cost)," the ministry's latest report for August 2020 said.

The expenditure incurred on these projects till August 2020 is Rs 11,48,621.70 crore, which is 45.47% of the anticipated cost of the projects.

It, however, said the number of delayed projects decreases to 440 if delay is calculated on the basis of latest schedule of completion.

Further, the report said for 907 projects neither the year of commissioning nor the tentative gestation period has been reported.

Out of the 539 delayed projects, 128 have overall delay in the range of one to 12 months, 128 have delays of 13 to 24 months, 167 reflect delay in the range of 25 to 60 months and 116 projects show delays of 61 months and above.

The average time overrun in these 539 delayed projects is 43.18 months.

The brief reasons for time overruns as reported by various project implementing agencies are delay in land acquisition, delay in obtaining forest/environment clearances and lack of infrastructure support and linkages.

Besides, there are other reasons like delay in tie-up of project financing, delay in finalisation of detailed engineering, change in scope, delay in tendering, ordering and equipment supply, law and order problems, geological surprises, pre-commissioning teething troubles and contractual issues, among others, the report said.

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, the report stated.

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