MoSPI says 421 infra projects hit by cost overrun of Rs 4.40 lakh crore in Nov

According to an official data, 421 infrastructure projects with investments of Rs 150 crore or more face cost overruns of Rs 4.40 lakh crore in November.

As many as 421 infrastructure projects, each entailing an investment of Rs 150 crore or more, were hit by cost overrun of more than Rs 4.40 lakh crore in November this year, an official report said.

According to Ministry of Statistics and Programme Implementation (MoSPI), which monitors infrastructure projects worth Rs 150 crore and above, out of 1,831 projects, 421 reported cost overrun and 845 projects were delayed.

”Total original cost of implementation of the 1,831 projects was Rs 25,10,577.59 crore and their anticipated completion cost was…Rs 29,50,997.33 crore, which reflects overall cost overruns of Rs 4,40,419.74 crore (17.54 per cent of original cost),” the ministry’s latest report for November 2023 said.

According to the report, the expenditure incurred on these projects till November 2023 was Rs 15,58,038.07 crore, which is 52.80 per cent of the anticipated cost of the projects. However, it stated that the number of delayed projects decreases to 629 if the delay is calculated on the basis of latest schedule of completion.

Further, it said that for 308 projects neither the year of commissioning nor the tentative gestation period were reported. Out of the 845 delayed projects, 204 have overall delays in the range of 1-12 months, 198 have been delayed for 13-24 months, 322 projects for 25-60 months, and 121 projects have been delayed for more than 60 months.

The average time overrun in these 845 delayed projects is 36.64 months. Reasons for time overrun, as reported by various project implementing agencies, include delay in land acquisition, in obtaining forest and environment clearances, and lack of infrastructure support and linkages.

Delays in tie-up 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. The report also cited state-wise lockdowns due to COVID-19 (imposed in 2020 and 2021) as a reason for the delay in implementation of these projects.

It has also been observed that project executing agencies are not reporting revised cost estimates and commissioning schedules for many projects, which suggests that time/cost overrun figures are under-reported, it added.