MoSPI says 449 Infra Projects hit by cost overrun of Rs 5.01 lakh crore in March

As many as 449 infrastructure projects, each entailing an investment of Rs 150 crore or above, were hit by cost overrun of more than Rs 5.01 lakh crore in March 2024, an official report stated.

According to Ministry of Statistics and Programme Implementation (MoSPI), which monitors infrastructure projects worth Rs 150 crore and above, out of 1,873 projects, 449 reported cost overrun and 779 projects were delayed.

"Total original cost of implementation of the 1,873 projects was Rs 26,87,535.69 crore and their anticipated completion cost is likely to be Rs 31,88,859.02 crore, which reflects overall cost overrun of Rs 5,01,323.33 crore (18.65 per cent of original cost)," the ministry's latest report for March 2024 said.

According to the report, the expenditure incurred on these projects till March 2024 is Rs 17,11,648.99 crore, which is 53.68 per cent of the anticipated cost of the projects. However, the number of delayed projects decreased to 567 if delay is calculated on the basis of the latest schedule of completion, it added.

Further, it said that for 393 projects neither the year of commissioning nor the tentative gestation period has been reported. Out of the 779 delayed projects, 202 have overall delays in the range of 1-12 months, 181 have been delayed for 13-24 months, 277 projects for 25-60 months, and 119 projects have been delayed for more than 60 months.

The average time overrun in these 779 delayed projects is 36.04 months.

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

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