May sees Rs 4.8 trillion cost overruns in 408 projects
ECONOMY & POLICY

May sees Rs 4.8 trillion cost overruns in 408 projects

A total of 408 infrastructure projects, each requiring an investment of Rs 1.5 billion or more, had experienced cost overruns exceeding Rs 4.8 trillion in May 2023. The Ministry of Statistics and Programme Implementation, responsible for monitoring infrastructure projects valued at Rs 1.5 billion and above, reported that out of a total of 1,681 projects, 408 projects had cost overruns and 814 projects had faced delays.

The Ministry's latest report for May 2023 revealed that the initial cost of implementing the 1,681 projects was Rs 24.16 trillion. However, the anticipated completion cost was estimated to be Rs 28.96 trillion, indicating an overall cost overrun of Rs 4.8 trillion, which accounted for 19.86% of the original cost. As of May 2023, the total expenditure incurred on these projects amounted to Rs 15.23 trillion, which was 52.61% of the anticipated project cost.

In the March quarter, a total of 384 infrastructure projects encountered cost overruns amounting to Rs 4.6 trillion crore. However, the number of delayed projects decreased to 607 when considering the latest completion schedule. Additionally, the report noted that for 419 projects, neither the year of commissioning nor the estimated gestation period had been reported.

Out of the 814 projects that experienced delays, 200 projects faced delays ranging from 1 to 12 months, 183 projects were delayed for 13 to 24 months, 300 projects were delayed for 25 to 60 months, and 131 projects were delayed for more than 60 months. The average time overrun for these 814 delayed projects was 37.04 months. Project implementing agencies cited various reasons for the time overruns, including delays in land acquisition, obtaining forest and environment clearances, and inadequate infrastructure support and linkages. Other factors contributing to delays included delays in securing project financing, finalising detailed engineering, changes in project scope, tendering, ordering and equipment supply, as well as law and order issues.

The report also highlighted that the implementation of these projects was hindered by state-wise lockdowns imposed due to COVID-19 in 2020 and 2021.

Also read:
Amazon to Invest $15 Billion in India by 2030
L&T, DRDO ink deal for Scorpene submarines' AIP modules


A total of 408 infrastructure projects, each requiring an investment of Rs 1.5 billion or more, had experienced cost overruns exceeding Rs 4.8 trillion in May 2023. The Ministry of Statistics and Programme Implementation, responsible for monitoring infrastructure projects valued at Rs 1.5 billion and above, reported that out of a total of 1,681 projects, 408 projects had cost overruns and 814 projects had faced delays. The Ministry's latest report for May 2023 revealed that the initial cost of implementing the 1,681 projects was Rs 24.16 trillion. However, the anticipated completion cost was estimated to be Rs 28.96 trillion, indicating an overall cost overrun of Rs 4.8 trillion, which accounted for 19.86% of the original cost. As of May 2023, the total expenditure incurred on these projects amounted to Rs 15.23 trillion, which was 52.61% of the anticipated project cost. In the March quarter, a total of 384 infrastructure projects encountered cost overruns amounting to Rs 4.6 trillion crore. However, the number of delayed projects decreased to 607 when considering the latest completion schedule. Additionally, the report noted that for 419 projects, neither the year of commissioning nor the estimated gestation period had been reported. Out of the 814 projects that experienced delays, 200 projects faced delays ranging from 1 to 12 months, 183 projects were delayed for 13 to 24 months, 300 projects were delayed for 25 to 60 months, and 131 projects were delayed for more than 60 months. The average time overrun for these 814 delayed projects was 37.04 months. Project implementing agencies cited various reasons for the time overruns, including delays in land acquisition, obtaining forest and environment clearances, and inadequate infrastructure support and linkages. Other factors contributing to delays included delays in securing project financing, finalising detailed engineering, changes in project scope, tendering, ordering and equipment supply, as well as law and order issues. The report also highlighted that the implementation of these projects was hindered by state-wise lockdowns imposed due to COVID-19 in 2020 and 2021. Also read: Amazon to Invest $15 Billion in India by 2030L&T, DRDO ink deal for Scorpene submarines' AIP modules

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