According to the Ministry of Statistics and Programme Implementation (MOSPI), from among 835 delayed projects, more than 400 were delayed by 25-60 months and 130 projects have been under process for over 61 months. This means that over 63 per cent of projects are delayed for over two years and up to five years. The December 2022 report cited a cost overrun of Rs.4.5 trillion or 22 per cent of original cost. This delay and the resultant cost escalation deprives utilisation of resources for much-needed social and economic interventions in a populous economy like ours. The various reasons cited include a delay in tie-up for project financing, change in scope and finalisation of detailed engineering. These reasons indicate ill-preparedness or amount to an excuse for nonfulfilment of project execution.Recently, Virendra Mhaiskar, Managing Director, IRB Developers, expressed the view that tender conditions ought to be made more stringent. He added that the Government needs to tighten its qualification criteria in the award of tenders for road projects as companies who put in bids often complain of cost overruns, which result in projects getting delayed. Issuing of a tender and its withdrawal or delay in awarding it are the first steps in tinkering with project costs. Bidding aggressively and then finding various reasons to change the scope of the project are the traditional ways by which several contractors managed to ward off competitive bidders. The Bandra-Worli Sealink project was originally set to be constructed at Rs.4 billion in 2004 and went on to be constructed at `16 billion five years later. The contract was awarded to the lowest bidder and then when the awardee sought changes in the scope of the project, the developer, instead of putting the project up for a rebid, which would have kept the cost at reasonable levels of escalation, ended up taxing the state budget by 400 per cent. A developer can well estimate the cost of implementing a project and can lay a bare minimum cost. Based upon variousbenefits available to them, such as having building materials in stock for which prices have risen, an inhouse equipment bank, cash reserves, skilled team, technology, etc, contractors may have an inherent cost advantage. But offering the contract on a cost-plus basis would ensure that based upon the specifications provided, there is a basic cost that the developer would reimburse the contractor and would also be willing to pay a percentage as a margin for the contracting services. This being so, the process of evaluation between one contractor and another would be the assessment of the bidder in qualitative terms, i.e. the ability of the contractor to deliver in time, to deliver quality, as per design, and within budget. Aggressive bidding by nature has the objective of bagging the contract ‘at any cost’ and is therefore self-defeating. Having won a contract at any cost, the contractor would be forced to explore questionable tactics in its execution. Project delays are costing Rs.4.5 trillion, which is equal to 1.5 per cent of GDP, and savings from this could potentially be used to triple the rural development budget from Rs.1.6 trillion or double the railway budget from Rs.2.4 trillion or increase the budget for roads by 50 per cent from Rs.2.7 trillion. Completions by the private sector in 2022-23 have slowed down too. In 2022-23, it is highly unlikely that it would manage to close over the Rs.2.6 trillion worth of completions seen during 2021-22, as per a CMIE report. The reasons for slow execution by the private sector should be a cause for worry.Founder & Editor-in-Chief Pratap Padode