Around 425 infra projects note cost overruns worth Rs 4.83 lakh cr
ECONOMY & POLICY

Around 425 infra projects note cost overruns worth Rs 4.83 lakh cr

According to a report, around 425 infrastructure projects, each entailing a Rs 150 crore or more investment, have been hit by cost overruns of over Rs 4.83 lakh crore.

According to the Ministry of Statistics and Programme Implementation, which monitors infrastructure projects of Rs 150 crore and above, out of 1,579 projects, 425 projects declared cost overruns, and around 664 projects were delayed.

The ministry's latest report for March 2022 said, the total original cost of execution of the 1,579 projects was Rs 21,95,196.72 crore, and their expected completion cost is likely to be Rs 26,78,365.62 crore, which reflects total cost overruns of Rs 4,83,168.90 crore.

According to the report, the cost incurred on these projects till March 2022 stood at Rs 13,88,760.73 crore, which is 51.85 % of the expected cost of the projects.

However, the number of delayed projects is reduced to 561 if the delay is estimated based on the latest completion schedule.

Further, for 606 projects, neither the year of commissioning nor the tentative gestation period has been notified.

Out of the 664 delayed projects, 124 have been delayed for 13-24 months, 331 projects for 25-60 months, 94 for 1-12 months, 115 projects for 61 months, and more.

In these 664 delayed projects, the average time overrun was 42.41 months.

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

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

The report also mentioned state-wise lockdowns due to Covid-19 as a reason for the delay in execution of these projects.

It has also been observed that project agencies are not reporting revised cost estimations and commissioning schedules for many projects, which indicates that time and cost overrun figures are under-reported.

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Also read: 443 infra projects hits cost overruns of Rs 4.45 lakh crore: Report

According to a report, around 425 infrastructure projects, each entailing a Rs 150 crore or more investment, have been hit by cost overruns of over Rs 4.83 lakh crore. According to the Ministry of Statistics and Programme Implementation, which monitors infrastructure projects of Rs 150 crore and above, out of 1,579 projects, 425 projects declared cost overruns, and around 664 projects were delayed. The ministry's latest report for March 2022 said, the total original cost of execution of the 1,579 projects was Rs 21,95,196.72 crore, and their expected completion cost is likely to be Rs 26,78,365.62 crore, which reflects total cost overruns of Rs 4,83,168.90 crore. According to the report, the cost incurred on these projects till March 2022 stood at Rs 13,88,760.73 crore, which is 51.85 % of the expected cost of the projects. However, the number of delayed projects is reduced to 561 if the delay is estimated based on the latest completion schedule. Further, for 606 projects, neither the year of commissioning nor the tentative gestation period has been notified. Out of the 664 delayed projects, 124 have been delayed for 13-24 months, 331 projects for 25-60 months, 94 for 1-12 months, 115 projects for 61 months, and more. In these 664 delayed projects, the average time overrun was 42.41 months. Reasons for time overruns as informed by various project executing agencies include delay in land acquisition, lack of infrastructure support and linkages, and delay in obtaining forest and environment clearances. Delay in tendering, ordering, and equipment supply, delay in tie-up for project financing, change in scope, delay in finalisation of detailed engineering, and law and order problems are among the other reasons. The report also mentioned state-wise lockdowns due to Covid-19 as a reason for the delay in execution of these projects. It has also been observed that project agencies are not reporting revised cost estimations and commissioning schedules for many projects, which indicates that time and cost overrun figures are under-reported. Image Source Also read: 443 infra projects hits cost overruns of Rs 4.45 lakh crore: Report

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