Delays Cost Core Projects Rs 22,834 Cr

Cost overruns due to delay in implementation of 215 major projects will cost the Centre Rs 42, 389 crore, according to the latest evaluation by the ministry of planning and programme implementation.

The ministry evaluates projects costing over Rs 100 crore, most of which are in the infrastructure sectors of power, civil aviation, railways, telecommunications and surface transport.

Almost all the projects have overshot deadlines, with delays ranging from one to 72 months. The original cost estimate, made when these public sector projects were first conceived, was Rs 111,871 crore. These 215 projects will now cost Rs 154,260 crore.

The sanctioned cost of these projects, at Rs 131,426 crore, was higher than the original cost because of delays in conceiving the projects and obtaining financial sanctions.

The difference between sanctioned costs and anticipated cost of the projects is Rs 22,834 crore.

The average cost overrun over the sanctioned cost works out to 17.4 per cent. Rs 65,355 crore, accounting for 42.4 per cent of costs, has already been spent on these projects, the report shows.

The report notes that 14 projects have shown additional delays in April-May 1998, resulting in further increases in costs. These include six projects in the coal sector, one in fertilisers, two each in the petroleum, power and railway sectors and one in surface transport.

In three sectors _ power, fertiliser and atomic energy _ the cost of the projects has nearly doubled.

The cost of three fertiliser projects has shot up from Rs 918 crore to Rs 1,644 crore and that of six atomic energy projects from Rs 5,902 crore to Rs 11,462 crore. The cost of 32 projects in the power sector have shot up from an estimated Rs 23,482 crore to Rs 41,366 crore.

The cost of 21 projects under the surface transport ministry has gone up from Rs 3,766 crore to Rs 6,172 crore.

Two projects under the civil aviation ministry have also suffered, with their cost going up from Rs 294 crore to Rs 566 crore.

Three sectors _ coal, petroleum, and petrochemicals _ have been able to implement projects at a faster pace and keep cost overruns under control. The cost of 21 coal projects has gone up from Rs 9,391 crore to Rs 10,644 crore. The rise is marginal in the petroleum sector, which has 34 projects under implementation, the cost going up from Rs 30,055 crore to Rs 31,588 crore. In the petrochemical sector, the cost of three projects has risen from Rs 3,820 crore to Rs 3,852 crore.