As many as 408 infrastructure projects, each entailing an investment of Rs 150 crore or more, have been hit by cost overruns of more than Rs 4.80 lakh crore in May 2023, an official report said.
According to the Ministry of Statistics and Programme Implementation, which monitors infrastructure projects worth Rs 150 crore and above, out of 1,681 projects, 408 reported cost overruns and as many as 814 projects were delayed.
”Total original cost of implementation of the 1,681 projects was Rs 24,16,872.28 crore and their anticipated completion cost is likely to be Rs 28,96,947.15 crore, which reflects overall cost overruns of Rs 4,80,074.87 crore (19.86 per cent of original cost),” the ministry’s latest report for May 2023 said.
According to the report, the expenditure incurred on these projects till May 2023 was Rs 15,23,957.33 crore, which was 52.61 per cent of the anticipated cost of the projects.
However, it stated that the number of delayed projects decreased to 607 if delay was calculated on the basis of the latest schedule of completion.
Further, it stated for 419 projects neither the year of commissioning nor the tentative gestation period has been reported. Out of the 814 delayed projects, 200 have overall delays in the range of 1-12 months, 183 have been delayed for 13-24 months, 300 projects for 25-60 months and 131 projects have been delayed for more than 60 months.
The average time overrun in these 814 delayed projects is 37.04 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, 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.
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!
