373 projects show cost overruns of Rs 3.89 trillion
ECONOMY & POLICY

373 projects show cost overruns of Rs 3.89 trillion

The Ministry of Statistics and Programme Implementation (MoSPI), charged with the responsibility of monitoring infrastructure projects worth Rs 1.5 billion or more, has released a report for August 2019, according to which, out of a total 1,634 projects, around 373 have shown cost overruns to the tune of Rs 3.89 trillion.

The report states that the original estimated cost of all the projects is approximately Rs 19.40 trillion. Completion cost is now expected to be around Rs 23.29 trillion. This amounts to cost overruns of around 20.05 per cent from the original cost – of around Rs 3.89 trillion. Till August 2019, the expenses incurred by these projects amounts to Rs 9.75 trillion, which is 41.85 per cent of the expected cost of the projects.

Additionally, the report included the number of projects that had crossed their deadlines; these amounted to 552. The average time overrun for all 552 projects was reported to be 38.89 months.

Reportedly, out of all the 552 projects showing time overruns, 181 projects are showing an overall delay in the range of 1 to 12 months, 128 projects have delay of 13 to 24 months, 127 projects show delay in the range of 25 to 60 months and 116 projects reflect delay of 61 months and above. However, as per the report, the number of delayed projects decreases to 489 if the delay is calculated on the basis of latest schedule of completion. Moreover, for 687 projects neither the year of commissioning nor the tentative gestation period has been reported.

Escalations in time could be caused by issues relating to obtaining forest clearances, acquiring required land and supply of equipment. According to the report, developers also face additional constraints because of funding, geographical conditions, labour issues and court cases, among other reasons. Reportedly, it is possible that the time and cost overrun figures have been under-reported since project agencies have not reported revised cost estimates and commissioning schedules for numerous projects.

The Ministry of Statistics and Programme Implementation (MoSPI), charged with the responsibility of monitoring infrastructure projects worth Rs 1.5 billion or more, has released a report for August 2019, according to which, out of a total 1,634 projects, around 373 have shown cost overruns to the tune of Rs 3.89 trillion. The report states that the original estimated cost of all the projects is approximately Rs 19.40 trillion. Completion cost is now expected to be around Rs 23.29 trillion. This amounts to cost overruns of around 20.05 per cent from the original cost – of around Rs 3.89 trillion. Till August 2019, the expenses incurred by these projects amounts to Rs 9.75 trillion, which is 41.85 per cent of the expected cost of the projects. Additionally, the report included the number of projects that had crossed their deadlines; these amounted to 552. The average time overrun for all 552 projects was reported to be 38.89 months. Reportedly, out of all the 552 projects showing time overruns, 181 projects are showing an overall delay in the range of 1 to 12 months, 128 projects have delay of 13 to 24 months, 127 projects show delay in the range of 25 to 60 months and 116 projects reflect delay of 61 months and above. However, as per the report, the number of delayed projects decreases to 489 if the delay is calculated on the basis of latest schedule of completion. Moreover, for 687 projects neither the year of commissioning nor the tentative gestation period has been reported. Escalations in time could be caused by issues relating to obtaining forest clearances, acquiring required land and supply of equipment. According to the report, developers also face additional constraints because of funding, geographical conditions, labour issues and court cases, among other reasons. Reportedly, it is possible that the time and cost overrun figures have been under-reported since project agencies have not reported revised cost estimates and commissioning schedules for numerous projects.

Next Story
Real Estate

Tata Gets Land for Staff Housing at Dholera Semiconductor Site

As Tata Electronics Pvt Ltd’s (TEPL) first semiconductor fabrication plant takes shape in the Dholera Special Investment Region (SIR), the Gujarat government has allotted 10 acres of land to the Tata Group for constructing residential apartments for its workforce. Dholera SIR, a greenfield smart city project about 110 km from Ahmedabad, is being developed with a strong focus on integrated social infrastructure.According to Mona Khandhar, Principal Secretary, Science and Technology Department, Government of Gujarat, “The government has given 10 acres to Tata Group for developing their own h..

Next Story
Infrastructure Urban

ZF India Appoints Paramjit Chadha as New MD

ZF Commercial Vehicle Control Systems India Ltd has appointed Paramjit Singh Chadha as its new Managing Director. With a career spanning nearly four decades in the automotive industry, Chadha brings deep sectoral knowledge and leadership experience to his new role.He began his professional journey with Maruti Suzuki and has since held senior roles in several leading automotive and component firms, including Kalyani Brakes, Bosch Chassis Systems, Continental Brakes, and Knorr-Bremse. His core expertise lies in safety-critical vehicle components, particularly brake systems, across various segmen..

Next Story
Technology

AirBrick Infra Sets Rs 1 billion Target, Expands to Dubai and Tier-II Cities

AirBrick Infra, one of India’s fastest-growing AI-led commercial interior design and build firms, has announced a sales order target of Rs 1 billion for FY 2025–26. The projection represents a 50 per cent growth over the previous fiscal year and reflects rising demand, increased repeat business, and the company's robust tech-first delivery model.  Now in its third year of operations, AirBrick continues its rapid scale-up, having successfully delivered over 70 projects spanning 3 lakh sq ft in FY 2023–24. FY 2024–25 witnessed the onboarding of several Fortune 500 clients, sett..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?