FinMin asks ministries to evaluate delayed infra projects, come up with solutions by November

Another senior government official told Moneycontrol that MoRTH and the National Highways Authority of India (NHAI) have started holding regular calls to address stalled projects. Representational photo

The Ministry of Finance has asked all infrastructure-related ministries to evaluate delayed infrastructure projects under their departments and come up with solutions that can be implemented, multiple senior government officials told Moneycontrol.

The ministry has asked eight of its peers to prepare a status report by November on why infrastructure projects are facing delays and the steps the ministries concerned have taken to resolve these.

The eight ministries include the Ministry of Petroleum and Natural Gas, the Ministry of Road Transport and Highways of India (MoRTH), the Ministry of Jal Shakti, the Ministry of Railways (Railway Board), the Ministry of Power, the Ministry of Coal, the Ministry of Civil Aviation and the Ministry of Housing and Urban Affairs.

"Each ministry has been asked to reduce delays in their respective departments by around 20 percent by November," a senior official from the Ministry of Railways told Moneycontrol.

He added that the ministries have been asked to work with the Infrastructure and Project Monitoring Division (IPMD) to work on solutions to reduce delays in the execution of infrastructure projects.

A rail ministry official said the Railway Board has created an assessment team. "The Railway Board chairman has asked for fortnightly reports on the progress of all infrastructure projects, including station redevelopment projects, dedicated freight corridors, etc.," this official said.

He added that last week the Railway Board chairman had spoken to the general managers from across Indian Railways and its public sector utilities to emphasise the importance of speedy execution of infrastructure projects.

Another senior government official told Moneycontrol that MoRTH and the National Highways Authority of India (NHAI) have started holding regular calls to address stalled projects. "Senior officials from MoRTH, the NHAI chairman and officials from the IPMD have weekly meetings to monitor the progress of projects and address concerns of stuck projects," the official said.

He added that the NHAI chairman has personally reached out to different state and district officers on the issue.

As part of its July 2023 report, its latest, IPMD has said that 809 projects in India were delayed and 213 projects were running behind schedule even after being granted extensions. Given the time overruns, as many as 388 infrastructure projects have been hit by cost overruns too, of more than Rs 4.65 lakh crore up to July 2023, the official report said.

"Total original cost of implementation of the 1,646 projects was over Rs 23,92,837.89 crore and their anticipated completion cost is likely to be Rs 28,58,394.39 crore, which reflects overall cost overruns of Rs 4,65,556.50 crore (19.46 percent of original cost)," IPMD's July report said.

According to the report, the expenditure incurred on these projects till July 2023 was Rs 15,21,550.38 crore, which was 53.23 percent of the anticipated cost of the projects.

Further, it stated that for 345 projects, neither the year of commissioning nor the tentative gestation period had been reported.

The report also said that MoRTH had the most number of delayed infrastructure projects with 419 projects. Indian Railways and the Petroleum Ministry have 98 and 81 delayed projects, respectively..

Similarly, 55 projects under the power ministry and 51 projects under the coal ministry are facing delays.

Out of the 809 delayed projects, 177 have overall delays in the range of 1-12 months, 192 have been delayed for 13-24 months, 318 projects for 25-60 months and 122 have been delayed for more than 60 months.

The average time overrun in these 809 delayed projects is 37.44 months.

The 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.

Delays in tie-ups for project financing, finalisation of detailed engineering, change in scope, tendering, ordering and equipment supply, and law and order problems were among the other reasons.

IPMD is part of the Programme Implementation Wing under the Ministry of Statistics and Programme Implementation.

The Programme Implementation Wing has three divisions, namely, the Twenty Point Programme, IPMD and the Members of Parliament Local Area Development Scheme Division.

IPMD monitors the implementation status of 1,643 central sector projects costing more than Rs 150 crore in 16 infrastructure sectors and the performance of key 11 infrastructure sectors.