Around 423 infra projects hit cost overruns of Rs 4.95 lakh cr

28 Jun 2022 CW Team

As per a report, around 423 infrastructure projects, each entailing an investment of Rs 150 crore or more, have been hit by cost overruns of over Rs 4.95 lakh crore.

As per the Ministry of Statistics and Programme Implementation, which monitors infrastructure projects of Rs 150 crore and more, out of 1,568 projects, 423 registered cost overruns, and around 721 projects were delayed.

The ministry's latest report for May 2022 said the total original cost of execution of the 1,568 projects was Rs 21,59,802.67 crore and their expected completion cost is Rs 26,54,818.05 crore, which shows overall cost overruns of Rs 4,95,015.38 crore.

As per the report, the expense incurred on these projects till May 2022 is Rs 13,42,535.22 crore, which is 50.57% of the expected cost of the projects.

However, the number of delayed projects drops to 563 if the delay is calculated based on the latest plan of completion.

Further, it revealed that for 569 projects, neither the year of commissioning nor the tentative gestation time has been registered.

Out of the 721 delayed projects, 113 projects have overall delays in the 1-12 months range, 121 projects have been delayed for 13-24 months, 350 projects for 25-60 months, and 137 projects have been delayed for 61 months and more.

In these 721 delayed projects, the average time overrun is 43.34 months.

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

Delay in tie-up for project financing, delay in tendering, change in scope, delay in finalisation of detailed engineering, ordering and equipment supply, and law and order issues are among the other reasons.

The report also noted state-wise lockdowns due to Covid-19 as a reason for the delay in these projects' implementation.

Image Source

Also read: As many as 428 infra projects hit cost overruns of Rs 4.98 lakh cr

As per a report, around 423 infrastructure projects, each entailing an investment of Rs 150 crore or more, have been hit by cost overruns of over Rs 4.95 lakh crore. As per the Ministry of Statistics and Programme Implementation, which monitors infrastructure projects of Rs 150 crore and more, out of 1,568 projects, 423 registered cost overruns, and around 721 projects were delayed. The ministry's latest report for May 2022 said the total original cost of execution of the 1,568 projects was Rs 21,59,802.67 crore and their expected completion cost is Rs 26,54,818.05 crore, which shows overall cost overruns of Rs 4,95,015.38 crore. As per the report, the expense incurred on these projects till May 2022 is Rs 13,42,535.22 crore, which is 50.57% of the expected cost of the projects. However, the number of delayed projects drops to 563 if the delay is calculated based on the latest plan of completion. Further, it revealed that for 569 projects, neither the year of commissioning nor the tentative gestation time has been registered. Out of the 721 delayed projects, 113 projects have overall delays in the 1-12 months range, 121 projects have been delayed for 13-24 months, 350 projects for 25-60 months, and 137 projects have been delayed for 61 months and more. In these 721 delayed projects, the average time overrun is 43.34 months. Causes for time overruns as reported by various project executing agencies include delay in obtaining forest and environment clearances, land acquisition, and lack of infrastructure support and linkages. Delay in tie-up for project financing, delay in tendering, change in scope, delay in finalisation of detailed engineering, ordering and equipment supply, and law and order issues are among the other reasons. The report also noted state-wise lockdowns due to Covid-19 as a reason for the delay in these projects' implementation. Image Source Also read: As many as 428 infra projects hit cost overruns of Rs 4.98 lakh cr

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