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Policy issues, fund shortage paralyse central projects

Dilasha Seth  |  New Delhi 

As many as 42 per cent of 555 central projects, each costing over Rs 150, have seen delays and 34 per cent are witnessing cost overruns, amid issues of land acquisition, environment complexities and resource crunch. The (Mospi) monitors these projects.

“We cannot compare the previous year’s data on project delays. Till April 2011, Mospi used to monitor projects with cost of over Rs 20 crore, as against Rs 150 crore now,” officials added. There are thousands of projects below Rs 150 crore, which are also facing severe delays and cost overruns, they said.

Heading the list are the railways, road transport and highways. At least 60 per cent of central roads and highway projects costing over Rs 150 crore have been delayed by up to nine years. Some rail projects are seeing time overruns up to 17 years.

As many as 233 central sector projects have been delayed of the 555 being monitored. Besides, 190 have cost overruns. Within this category, 13 projects have reported both. Mospi officials also attribute these delays and cost overruns to disputes in court cases, law and order and inadequate infrastructure support.

Time overruns, apart from upsetting the Plan targets, lead to cost overrun on account of inflationary increase, exchange rate variation and higher interest and administrative cost, they said.

Of the 131 projects of the railways, 101 have cost overruns. On an average, the cost excess was 106.9 per cent in the rail projects, from Rs 64,906 crore to Rs 1.34 lakh crore. A Mospi official said the approve many projects without allocating committed resources, while over-allocating funds in other projects. In 50-60 projects, the do not even have a date of commissioning, he said. Mospi has suggested to the that it allocate resources in order of priority.

In the case of time overruns, projects of the topped the list, followed by power and railways. Of the 127 roads and highway projects, 78 have reported delays by up to nine years. Three major factors responsible are land acquisition, environmental clearances and law and order problems.

In roads, 68 of the 78 delayed projects have time delays of up to five. Ten are delayed by over five years.

State-wise, six of the 10 projects in Jammu and Kashmir have recorded a total of 250 per cent cost overrun. Haryana, Punjab and Uttar Pradesh are states where projects have faced cost overrun of over 100 per cent.

In J&K, the Udhampur-Srinagar-Baramulla rail project has 700 per cent cost overrun and nearly 17 years time overrun due to geological factors, land acquisition, forest clearance problems, etc. The Guna-Etawah line through Madhya Pradesh and UP has a 204.7 per cent cost overrun and an 18-year time overrun.

Differences between state governments and central public sector units or ministries also lead to delays on issues like water tax, concessional electricity rates, etc. Officials further said the railways and NHAI had been lax in furnishing timely information on projects to Mospi.

First Published: Thu, May 17 2012. 00:49 IST