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Projects in Railways, Roads, Power, Urban Development facing a lag

January 2019

Of a total of 371 projects – each amounting to Rs 10 billion or more – delayed across four sectors, the railways takes the lead with 174 delayed projects, followed by road transport and highways at 127 projects; power at 56; and urban development at 14 projects. 

The September 2018 Flash Report clearly indicates these numbers with time and cost overruns compared to the original schedule. The report also analyses sectoral delays with projects amounting to Rs 1.50 billion and above. 

In case of the railways, the total original cost of implementation of 375 projects when sanctioned was Rs 4,783.59 billion but this subsequently increased to Rs 7,253.43 billion, implying a staggering cost overrun of 51.6 per cent.

The expenditure incurred on these projects till September 2018 is Rs 1,723.61 billion, which is 23.8 per cent of the anticipated project cost. Some major projects that faced delay and cost overruns included the Western Dedicated Freight Corridor. The project, worth Rs 165 billion, which commenced in 2007 is now facing an additional cost overrun of Rs 345 billion. The current project cost is around Rs 511 billion. Similarly, the Eastern Dedicated Freight Corridor Project, which was inaugurated with much fanfare in 2006, is facing an additional cost overrun of Rs 165 billion from its original cost of Rs 115.89 billion. The total cost of the project is Rs 281.81 billion.

Over the years, the power sector witnessed an overall cost overrun of 21.3 per cent to Rs 3,725.25 billion as against the original cost of Rs 3,072.23 billion for 105 projects. The expenditure incurred on these projects till September 2018 is Rs 2,345.28 billion, which is 63 per cent of the anticipated project cost. By far, the power sector has seen the maximum cost incurred on projects (percentage-wise) as against other sectors.

In the roads sector, out of 574 projects, two projects are ahead of schedule, 81 projects are on schedule and 90 projects are delayed. Surprisingly, 368 projects do not have fixed dates of commissioning and 33 projects were sanctioned without any commissioning date but subsequently dates of completion were finalised. The total original cost of implementation of 574 projects when sanctioned was around Rs 3,869.25 billion, but this was increased to Rs 4,011.59 billion implying a cost overrun of 3.7 per cent. The expenditure incurred on these projects till September 2018 is Rs 1,326.43 billion, which is 33 per cent of the anticipated cost of the projects.

Urban development, too, was privy to project delays and cost overruns. The total original cost of implementation of 61 projects, when sanctioned, was Rs 1, 717.44 billion, but this was subsequently increased to Rs 1,794.53 billion, implying a cost overrun of 4.5 per cent. 

The expenditure incurred on these projects till September 2018 is Rs 736 billion, which is 41 per cent of the anticipated cost of the projects.

SHRIYAL SETHUMADHAVAN and RAHUL KAMAT

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