Nearly 400 Infrastructure Projects Show Cost Overruns Of Rs 4.02 Lakh Crore
Traffic moves along National Highway 7 as road construction takes place in Bengaluru. (Photographer: Namas Bhojani/Bloomberg)

Nearly 400 Infrastructure Projects Show Cost Overruns Of Rs 4.02 Lakh Crore

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As many as 401 infrastructure projects, each worth Rs 150 crore or more, have been hit by cost overruns of more than Rs 4.02 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 1,692 such projects, 401 reported cost overruns and 552 time escalation.

"Total original cost of implementation of the 1,692 projects was Rs 20,75,212.70 crore and their anticipated completion cost is likely to be Rs 24,78,016.45 crore, which reflects overall cost overruns of Rs 4,02,803.75 crore (19.41% of original cost)," the ministry's latest report for January 2020 said.

The expenditure incurred on these projects till January 2020 is Rs 10,97,604.64 crore, which is 44.29% of the anticipated cost of the projects.

However, it said the number of delayed projects decreases to 451 if delay is calculated on the basis of the latest schedule of completion.

It also said for 824 projects neither the year of commissioning nor the tentative gestation period has been reported.

Out of the 552 delayed projects, 168 have overall delay in the range of 1 to 12 months, 125 with delay in the range of 13 to 24 months, 145 projects reflect delay in the range of 25 to 60 months and 114 projects show delay of 61 months and above.

The average time overrun in these 552 delayed projects is 39.71 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 also observed that project agencies are not reporting revised cost estimates and commissioning schedules for many projects, indicating that time or cost overrun figures are under-reported.

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