As many as 428 infrastructure projects, each entailing an investment of Rs 150 crore or more, have been hit by cost overruns of more than Rs 4.98 lakh crore, as per a report.
According to the Ministry of Statistics and Programme Implementation, which monitors infrastructure projects of Rs 150 crore and above, out of 1,559 projects, 428 projects reported cost overruns and as many as 647 projects were delayed.
”Total original cost of implementation of the 1559 projects was Rs 21,73,907.11 crore and their anticipated completion cost is likely to be Rs 26,72,201.26 crore, which reflects overall cost overruns of Rs 4,98,294.15 crore (22.92% of original cost),” the ministry’s latest report for April 2022 said.
According to the report, the expenditure incurred on these projects till April 2022 was Rs 13,50,610.98 crore, which was 50.54 per cent of their anticipated cost. However, the number of delayed projects decreases to 525 if the delay is calculated on the basis of latest schedule of completion.
Further, for 619 projects neither the year of commissioning nor the tentative gestation period has been reported. Out of the 647 delayed projects, 103 have overall delays in the range of 1-12 months, 111 have been delayed for 13-24 months, 314 projects for 25-60 months and 119 projects have been delayed for 61 months and above.
The average time overrun in these 647 delayed projects was 42.83 months. Reasons for time overruns as reported by various project implementing agencies include delay in land acquisition, delay in obtaining forest and environment clearances, and lack of infrastructure support and linkages.
Delay in tie-up for project financing, delay in finalisation of detailed engineering, change in scope, delay in tendering, ordering and equipment supply, and law and order problems are among the other reasons. The report also cited state-wise lockdowns due to COVID-19 as a reason for the delay in implementation of these projects.
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, it stated.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
