360 projects report cost overruns of Rs 3.88 tn

01 Nov 2019 CW Team

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.”

Infrastructure Transport

15 Sep 2025

Cabinet Approves Key Highway and Rail Projects in Bihar Region

The Union Cabinet on Wednesday approved the four-laning of the 84.2-km Mokama-Munger section of the Buxar-Bhagalpur high-speed corridor, a key industrial region in poll-bound Bihar. The Cabinet also sanctioned the doubling of the 177-km Bhagalpur-Dumka-Rampurhat railway line, which passes through Bihar, Jharkhand, and West Bengal, at a cost of Rs 31.7 billion.The Rs 44.5 billion highway project will be constructed under the hybrid annuity model, a variant of public-private partnership. The Mokama-Munger stretch was the only remaining two-lane section of the 363-km Buxar-Bhagalpur corridor. Fou..

Infrastructure Transport

15 Sep 2025

NGT Issues Notice on Bengaluru Twin Tunnel Project

The National Green Tribunal (NGT) on Wednesday issued notices in response to a petition filed by Bengaluru Praja Vedike and others, challenging the Bengaluru twin tunnel road project. Petitioners claim the project was “hastily announced” and bypassed mandatory environmental impact assessment procedures.Notices have been served to the Karnataka Government, Greater Bengaluru Authority, State Environment Impact Assessment Authority (SEIAA), Bengaluru Smart Infrastructure Ltd (B-SMILE), the Union Ministry of Environment, Forest and Climate Change, and project consultants.The 16.74-km twin-tube..

Real Estate

15 Sep 2025

India’s Residential Sales to Dip Slightly in FY26

Residential sales in India’s seven major cities are projected to decline by up to 3 per cent year-on-year in FY26 to 620–640 million square feet (msf), amid a moderation in sales velocity, according to ratings agency Icra.In FY25, sales stood at 643 msf, down 8 per cent YoY, following a sharp contraction in new launches and moderated demand in the affordable and mid-income segments. This slowdown came after the sector posted a robust compound annual growth rate of 26 per cent in area sales between FY22 and FY24.Icra noted: “Having seen a strong upcycle, the sector entered an equilibrium ..