360 projects report cost overruns of Rs 3.88 tn
PORTS & SHIPPING

360 projects report cost overruns of Rs 3.88 tn

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 June 2019, according to which, out of a total 1,608 projects, more than 360 have shown cost overruns to the tune of Rs 3.88 trillion.

The report states that the original estimated cost of all the projects is approximately Rs 19.18 trillion. Completion cost is now expected to be around Rs 23.05 trillion. This amounts to cost overruns of around 20.23 per cent from the original cost. Additionally, the report included the number of projects that had crossed their deadlines; these amounted to 550. The average time overrun for all 550 projects was reported to be 39.24 months.

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.

“Project implementation in certain infrastructure sectors continues to remain challenging, with many projects witnessing significant time and cost overruns,” says Shubham Jain, Group Head & Senior Vice-President, Corporate Ratings, ICRA. “As per the recent data available, the aggregate cost overrun for all major ongoing infrastructure projects as a percentage of original cost had increased to over 20 per cent—the highest in about eight years. Two key sectors—railways and power—have contributed to the majority of the cost overruns. This is despite the various reform measures undertaken by the Government. Delays in land acquisition, the difficulty faced in project financing, and increasing cost of land acquisition have been some of the key reasons behind the time and cost overruns.”

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 June 2019, according to which, out of a total 1,608 projects, more than 360 have shown cost overruns to the tune of Rs 3.88 trillion. The report states that the original estimated cost of all the projects is approximately Rs 19.18 trillion. Completion cost is now expected to be around Rs 23.05 trillion. This amounts to cost overruns of around 20.23 per cent from the original cost. Additionally, the report included the number of projects that had crossed their deadlines; these amounted to 550. The average time overrun for all 550 projects was reported to be 39.24 months. 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. “Project implementation in certain infrastructure sectors continues to remain challenging, with many projects witnessing significant time and cost overruns,” says Shubham Jain, Group Head & Senior Vice-President, Corporate Ratings, ICRA. “As per the recent data available, the aggregate cost overrun for all major ongoing infrastructure projects as a percentage of original cost had increased to over 20 per cent—the highest in about eight years. Two key sectors—railways and power—have contributed to the majority of the cost overruns. This is despite the various reform measures undertaken by the Government. Delays in land acquisition, the difficulty faced in project financing, and increasing cost of land acquisition have been some of the key reasons behind the time and cost overruns.”

Next Story
Infrastructure Transport

Metro Line 2B Phase 1 to Boost Realty in Mumbai’s Eastern Suburbs

Mumbai’s real estate sector is set for a major boost as Phase 1 of Metro Line 2B, between Mandale and Diamond Garden, nears completion. The Mumbai Metropolitan Region Development Authority (MMRDA) has confirmed that mandatory rectifications are done, and inspections by the Commissioner of Metro Railway Safety (CMRS) have been carried out. The 5.39-km stretch with five stations forms part of the larger DN Nagar–Mandale corridor, designed to ease congestion and improve east–west connectivity. Passenger operations are expected by December 2025, with the full line slated for 2027. ..

Next Story
Resources

WattPower wins Best Inverter award at Global Solar Expo 2025

WattPower, a leading renewable energy solutions provider, has won the award for “Best Inverter in the Utility Segment” at the Global Solar Expo 2025. The recognition underscores the company’s commitment to delivering reliable, high-performance and future-ready solar solutions for large-scale projects. At the forefront of utility-scale solar, WattPower manufactures advanced string inverters that directly feed power into the Indian grid. With robust technology, high-quality components and comprehensive product lifecycle support, its solutions stand among the most sophisticated in the ..

Next Story
Real Estate

Awfis delivers 67,000 sq. ft. innovation hub for eBay in Bengaluru

Awfis Space Solutions, India’s largest flexible workspace provider and the first publicly listed workspace solutions platform, has partnered with eBay to establish a 67,000 sq. ft. innovation hub at Embassy Tech Village, Bengaluru. The mandate covers design, build and management of the new office, which will act as a strategic hub supporting diverse functions and accelerating eBay’s AI-first commerce strategy. The centre will focus on artificial intelligence, engineering, product development and applied research, strengthening eBay’s growth in India. Embassy Tech Village, North Beng..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?