Delays, other issues push up cost of 355 infra projects by Rs 3.88 trillion

As many as 355 infrastructure projects, each worth Rs 150 crore or more, have shown cost overruns to the tune of over Rs 3.88 trillion owing to delays and other reasons, according to a report.

The Ministry of Statistics and Programme Implementation monitors infrastructure projects worth Rs 150 crore and above. Of these 1,623 projects, 355 reported cost overruns and 552 time escalation.

"Total original cost of implementation of the 1,623 projects was Rs 19,33,390.22 crore and their anticipated completion cost is likely to be Rs 23,21,502.84 crore, which reflects overall cost overruns of Rs 3,88,112.62 crore (20.07 per cent of original cost)," the ministry's latest report for July 2019 said.

According to the report, expenditure incurred on these projects till July 2019 stood at Rs 9,47,571.45 crore, which is 40.82 per cent of the anticipated cost of the projects.

However, it said, the number of delayed projects decreased to 451 if delay is calculated on the basis of latest schedule of completion.

Further, it said that for 670 projects neither the year of commissioning nor the tentative gestation period has been reported.

Out of 552 delayed projects, 187 projects have overall delay in the range of 1 to 12 months, 121 projects 13 to 24 months, 132 projects reflect delay in the range of 25 to 60 months and 112 show delay of 61 months and above.

The average time overrun in these 552 delayed projects is 29.07 months.

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

Besides, there are other reasons like fund constraints, geological surprises, geo-mining conditions, slow progress in civil works, shortage of labour, inadequate mobilisation by the contractor, Maoist problems, court cases, contractual issues, ROU/ROW (right of use/right of way) problems, law and order situation, among others, the report said.

It also observed that project agencies are not reporting revised cost estimates and commissioning schedules for many projects, which suggests that time/cost overrun figures are under-reported.