273 infrastructure projects cause cost overrun of Rs 1.77 lakh crore

Reasons for time overruns as reported by various project implementing agencies are delays in land acquisition, forest clearance & supply of equipment

As many as 273 infrastructure projects, including those delayed due to land acquisition, forest clearances and other reasons, have led to a cost overrun of Rs 1.77 lakh crore, as per official data.

In August 2016, the Ministry of Statistics and Programme Implementation monitored 1,167 infrastructure projects, each worth Rs 150 crore or more across sectors such as power, railways and roads.

The ministry said in its flash report that out of the 1,167 projects, 282 are on schedule, 337 are delayed, 273 projects reported cost overrun and 85 projects reported both time and cost overrun with respect to their original project implementation schedules.

"Total original cost of implementation of the 1,167 projects was Rs 14,33,476.53 crore and their anticipated completion cost is likely to be Rs 16,10,504.54 crore, which reflects overall cost overrun of Rs 1,77,028.01 crore (12.35% of the original cost)," it said.

As per the report, the expenditure incurred on these projects till August 2016 is Rs 6,30,581.41 crore, which is 39.15% of the anticipated cost of the projects.

However, the report stated that the number of delayed projects decreases to 283 if the delay is calculated on the basis of the latest schedule of completion.

Further, 81 projects have been sanctioned without original commissioning date and for 460 projects neither the year of commissioning nor the tentative gestation period has been reported, it added.

Out of 337 delayed projects, 68 projects have an overall delay in the range of 1 to 12 months, 54 projects have a delay in the range of 13 to 24 months, 138 projects have delay in the range of 25 to 60 months and 77 projects have delay of 61 months and above, it said.

According to the report of April 2016, out of 1,061 projects on the monitor of this Ministry, 241 projects reported cost overruns and 326 projects reported time overruns, while during August 2016, out of 1,167 projects, 273 projects reported cost overruns and 337 projects reported time overruns.

In comparison to April 2016, the number of projects reporting cost overruns has increased from 22.71% to 23.39% whereas projects reporting time overruns have decreased from 30.73% to 28.88% (in August 2016).

As per the report, reasons for time overruns as reported by various project implementing agencies are delays in land acquisition, forest clearance and supply of equipment.

Other factors responsible for such delays are fund constraints, geological surprises, problems in equipment erection, geo-mining conditions, slow progress in civil works, shortage of labour, inadequate mobilisation by contractor, Maoist problems, court cases, contractual issues, ROU/ROW problems, law and order situation etc.

Speedy implementation of projects assumes significance in view of government's push to move towards high growth trajectory of over 8% and touch double-digit mark in few years.