470 infra projects show cost overruns worth Rs 4.38 lakh cr
ECONOMY & POLICY

470 infra projects show cost overruns worth Rs 4.38 lakh cr

According to a report by the Ministry of Statistics and Programme Implementation (MoSPI), as many as 470 infrastructure projects, each worth over Rs 150 crore have shown cost overruns of over Rs 4.38 lakh crore.

The report said the total original cost of implementation of 1,773 infrastructure projects was Rs 22,33,409.53 crore, however, the anticipated cost is likely to be around Rs 26,71,440.77 crore, indicating an overall cost overrun of 4,38,031.24 crore, 19.61% of the original cost.

An expenditure of 13,16,032.62 crore was incurred on these projects till April 2021, which is 49.26% of the expected cost of the projects.

The report also mentioned that the number of delayed projects would drop to 375 if the delay is estimated as per the latest schedule of completion. For 988 projects, neither the year of commissioning nor the tentative gestation period has been reported.

Out of 525 delayed projects, an overall delay has been noted for 106 projects in a range of 1-12 months, 123 projects in 13-24 months, 179 projects in 25-60 months and 117 projects in more than 61 months.

In these 525 delayed projects, the average time overrun is 45.63 months.

Various project implementing agencies have concluded that the reasons for time overruns are delay in -- land acquisition, obtaining forest, tie-up for project financing, finalisation of detailed engineering, tendering, ordering, equipment supply, environment clearances.

The reasons also include lack of infrastructure support and linkages, change in scope, and law and order problems.

Reports have also pointed to lockdowns due to Covid-19 as one of the reasons for the delay in the implementation of projects.

Many project agencies have also been found not disclosing revised cost estimates and commissioning timelines, implying that time/cost overrun statistics are underreported.

Image Source


Also read: 449 infra projects’ cost overruns total Rs 4 lakh cr

Also read: List of the companies that were able to bag some of the major infrastructural projects in May

According to a report by the Ministry of Statistics and Programme Implementation (MoSPI), as many as 470 infrastructure projects, each worth over Rs 150 crore have shown cost overruns of over Rs 4.38 lakh crore. The report said the total original cost of implementation of 1,773 infrastructure projects was Rs 22,33,409.53 crore, however, the anticipated cost is likely to be around Rs 26,71,440.77 crore, indicating an overall cost overrun of 4,38,031.24 crore, 19.61% of the original cost. An expenditure of 13,16,032.62 crore was incurred on these projects till April 2021, which is 49.26% of the expected cost of the projects. The report also mentioned that the number of delayed projects would drop to 375 if the delay is estimated as per the latest schedule of completion. For 988 projects, neither the year of commissioning nor the tentative gestation period has been reported. Out of 525 delayed projects, an overall delay has been noted for 106 projects in a range of 1-12 months, 123 projects in 13-24 months, 179 projects in 25-60 months and 117 projects in more than 61 months. In these 525 delayed projects, the average time overrun is 45.63 months. Various project implementing agencies have concluded that the reasons for time overruns are delay in -- land acquisition, obtaining forest, tie-up for project financing, finalisation of detailed engineering, tendering, ordering, equipment supply, environment clearances. The reasons also include lack of infrastructure support and linkages, change in scope, and law and order problems. Reports have also pointed to lockdowns due to Covid-19 as one of the reasons for the delay in the implementation of projects. Many project agencies have also been found not disclosing revised cost estimates and commissioning timelines, implying that time/cost overrun statistics are underreported. Image SourceAlso read: 449 infra projects’ cost overruns total Rs 4 lakh cr Also read: List of the companies that were able to bag some of the major infrastructural projects in May

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