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.

Related Stories

Gold Stories

Next Story
Infrastructure Urban

PMC Approves Rs 5.78 bn Waste Processing Contract

The Pune Municipal Corporation approved a Rs 5.7796 billion (bn) fifteen-year contract to process 500 metric tonnes (t) of waste daily at the Devachi Uruli depot and allowed unauthorised overhead cables to remain temporarily for one year subject to a fee. The decision was taken by the civic body to appoint a private operator for an integrated waste facility covering about 12 acres. The approval frames the contract as an operational arrangement with a fixed base rate and annual adjustments. The contract was awarded to Bhoomi Green Energy Envirocare LLP, which quoted Rs 772 per t, compared with ..

Next Story
Infrastructure Urban

Kerala High Court to Inspect Brahmapuram Waste Plant

Two judges of the Kerala High Court, Justice Bechu Kurian Thomas and Justice Gopinath P, will inspect the Brahmapuram waste management plant on 11 September as part of the suo motu proceeding on the plant's maintenance. The inspection was scheduled to allow the bench to assess conditions on site and to verify representations made by municipal and state authorities. The court listed the site visit during a hearing and directed officials to prepare for an on-site review. The bench instructed authorities to file a detailed report on the plant's present functioning ahead of the visit. It said the ..

Next Story
Infrastructure Transport

Ahmedabad Geetamandir Bus Port Terminal Two Ready with Airport Facilities

Ahmedabad’s Geetamandir Bus Port has completed a separate Terminal Two, which is ready to serve passengers travelling to Saurashtra-Kutch and North Gujarat. The facility has been developed with airport like facilities to improve passenger comfort and ease of travel. Deputy Chief Minister Harsh Sanghvi is scheduled to inaugurate the new terminal today. Authorities say the design focuses on smoother boarding and reduced congestion. Terminal Two will become operational from 13 August and is expected to handle 1,091 buses daily servicing routes to Saurashtra-Kutch and North Gujarat. The new arra..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement