Are Projects facing a 90 percent barrier?
ECONOMY & POLICY

Are Projects facing a 90 percent barrier?

How come we manage to plan such that we always have projects that are 90% complete questions PRATAP PADODE, Founder & President, FIRST Construction Council

We know that we lose nearly Rs 1 trillion a year on account of delays in projects. But keeping mega projects lingering on and on is a complete financial disaster.

As per CMIE, completion of investment projects suffered a steep fall in the quarter ended June 2024. Only 316 projects with a combined investment of Rs.353 billion were completed during this quarter. Even announcements on setting up factories, building roads, and other new projects fell below the Rs 1 trillion mark, according to data for the April-June quarter (Q1) of 2024-25. The Q1 figure of Rs 60,000 crore is 92 per cent lower than the Rs 7.9 trillion recorded in the year-ago quarter, shows CMIE data. However, project announcements suffered mainly due to the code of conduct and general elections.

But, in general, our projects seem to hit a wall as soon as they close in on 90% completion. Sample this:
As per latest reports from the government, more than 90% of the total projects (7,244 projects amounting to ₹1,45,312 crore) undertaken under the Smart Cities Mission have been completed.

The Western Dedicated Freight Corridor (WDFC) that connects JNPT Mumbai to Dadri in Haryana is 93.2 percent complete and is likely to be completed by December 2025.

The Maha Samruddhi Marg is likely to be completed by next month as it closes in on its last lap of 76 km. The Coastal Road in Mumbai is likely to be completed by December 2024. So also, Mumbai Metro Line 3 which is also likely to be completed by December 2024. The Ram Mandir in Ayodhya too is likely to be finally completed by December 2024.

The Delhi-Mumbai Industrial Corridor (DMIC) is strategically built around the Western Dedicated Freight Corridor (WDFC). The WDFC serves as a backbone for the DMIC, facilitating efficient transportation of goods between the industrial hubs along the corridor and major ports in Mumbai. But both the Dedicated Freight Corridor and the DMIC “are over 90% complete”! The fruits of this development will remain unutilised and provide sub-optimal results for our investments until this project attains 100% completion.

Prime Minister Narendra Modi and the Cabinet recently approved 12 new project proposals last month, under the National Industrial Corridor Development Programme (NICDP). This decision entails an estimated investment of ₹28,602 crore and aims to establish a network of industrial nodes and cities. These 12 industrial areas, located across 10 states and planned along six major corridors, are expected to support India's manufacturing capabilities and contribute to economic growth.

But it is time we ensure that we do complete the existing ones and realise full value before we keep other projects idling.

The 14th RAHSTA Expo, part of the India Construction Festival, will be held on October 9 and 10, 2024, at the Jio Convention Centre in Mumbai. For more details, visit: https://rahstaexpo.com

How come we manage to plan such that we always have projects that are 90% complete questions PRATAP PADODE, Founder & President, FIRST Construction CouncilWe know that we lose nearly Rs 1 trillion a year on account of delays in projects. But keeping mega projects lingering on and on is a complete financial disaster. As per CMIE, completion of investment projects suffered a steep fall in the quarter ended June 2024. Only 316 projects with a combined investment of Rs.353 billion were completed during this quarter. Even announcements on setting up factories, building roads, and other new projects fell below the Rs 1 trillion mark, according to data for the April-June quarter (Q1) of 2024-25. The Q1 figure of Rs 60,000 crore is 92 per cent lower than the Rs 7.9 trillion recorded in the year-ago quarter, shows CMIE data. However, project announcements suffered mainly due to the code of conduct and general elections. But, in general, our projects seem to hit a wall as soon as they close in on 90% completion. Sample this: As per latest reports from the government, more than 90% of the total projects (7,244 projects amounting to ₹1,45,312 crore) undertaken under the Smart Cities Mission have been completed. The Western Dedicated Freight Corridor (WDFC) that connects JNPT Mumbai to Dadri in Haryana is 93.2 percent complete and is likely to be completed by December 2025. The Maha Samruddhi Marg is likely to be completed by next month as it closes in on its last lap of 76 km. The Coastal Road in Mumbai is likely to be completed by December 2024. So also, Mumbai Metro Line 3 which is also likely to be completed by December 2024. The Ram Mandir in Ayodhya too is likely to be finally completed by December 2024. The Delhi-Mumbai Industrial Corridor (DMIC) is strategically built around the Western Dedicated Freight Corridor (WDFC). The WDFC serves as a backbone for the DMIC, facilitating efficient transportation of goods between the industrial hubs along the corridor and major ports in Mumbai. But both the Dedicated Freight Corridor and the DMIC “are over 90% complete”! The fruits of this development will remain unutilised and provide sub-optimal results for our investments until this project attains 100% completion. Prime Minister Narendra Modi and the Cabinet recently approved 12 new project proposals last month, under the National Industrial Corridor Development Programme (NICDP). This decision entails an estimated investment of ₹28,602 crore and aims to establish a network of industrial nodes and cities. These 12 industrial areas, located across 10 states and planned along six major corridors, are expected to support India's manufacturing capabilities and contribute to economic growth. But it is time we ensure that we do complete the existing ones and realise full value before we keep other projects idling.

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