335 Infrastructure Projects Show Cost Overruns Of Rs 4.46 Lakh Crore

As many as 335 infrastructure projects, each entailing an investment of Rs 150 crore or more, have been hit by cost overruns of more than Rs 4.46 lakh crore, as per an official report.

According to the Ministry of Statistics and Programme Implementation, which monitors infrastructure projects worth Rs 150 crore and above, out of 1,454 projects, 335 reported cost overruns and as many as 871 projects were delayed.

"Total original cost of implementation of the 1,454 projects was Rs 20,59,065.57 crore and their anticipated completion cost is likely to be Rs 25,05,248.43 crore, which reflects overall cost overruns of Rs 4,46,182.86 crore (21.67 per cent of original cost)," the ministry's latest report for January 2023 said.

According to the report, the expenditure incurred on these projects till January 2023 was Rs 13,53,875.70 crore, which is 54.04 per cent of the anticipated cost of the projects.

However, the number of delayed projects decreased to 703 if delay is calculated on the basis of the latest schedule of completion.

Further, it showed that for 309 projects neither the year of commissioning nor the tentative gestation period has been reported.

Out of the 871 delayed projects, 169 have overall delays in the range of 1-12 months, 157 have been delayed for 13-24 months, 414 projects for 25-60 months and 131 projects have been delayed for more than 60 months.

The average time overrun in these 871 delayed projects was 39.69 months.

Reasons for time overruns as reported by various project implementing agencies include delay in land acquisition, delay in obtaining forest and environment clearances, and lack of infrastructure support and linkages.

Delay in tie-up for project financing, finalisation of detailed engineering, change in scope, tendering, ordering and equipment supply, and law and order problems were among the other reasons.

The report also cited state-wise lockdowns due to COVID-19 (imposed in 2020 and 2021) as a reason for the delay in implementation of these projects.

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