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 Energy

Amazon Achieves 100% Renewable Energy

Amazon has achieved its goal of powering its global operations with 100% renewable energy, seven years ahead of its original target set for 2030, as reported. This significant milestone underscores Amazon's commitment to sustainability and its leadership in corporate renewable energy adoption. Amazon's journey towards 100% renewable energy began with a series of strategic investments in solar and wind projects around the world. These projects include large-scale wind farms and solar arrays that contribute substantial amounts of clean energy to the grid. By reaching this goal early, Amazon has ..

Next Story
Infrastructure Energy

Faster Renewable Expansion Needed: IRENA

The International Renewable Energy Agency (IRENA) has emphasized the urgent need for an accelerated expansion of renewable energy to meet global 2030 targets, as reported by the Economic Times. According to IRENA, current efforts are insufficient, and a substantial increase in the deployment of renewable energy technologies is crucial to achieving climate goals and ensuring sustainable development. IRENA's latest report highlights that despite progress in renewable energy adoption, the pace of growth must triple to align with the targets set in the Paris Agreement. The report stresses that ren..

Next Story
Infrastructure Energy

SECI Announces Green Hydrogen Tender

SECI's Green Hydrogen Tranche-II tender is designed to attract investments and partnerships in the green hydrogen sector. The tender aims to promote the development of green hydrogen projects across the country, leveraging India's vast renewable energy resources. This move aligns with the government's National Hydrogen Mission, which focuses on creating a sustainable hydrogen economy and reducing carbon emissions. The tender seeks proposals from companies and consortiums capable of establishing large-scale green hydrogen production facilities. These facilities will utilize renewable energy sou..

Hi There!

"Now get regular updates from CW Magazine on WhatsApp!

Join the CW WhatsApp channel for the latest news, industry events, expert insights, and project updates from the construction and infrastructure industry.

Click the link below to join"

+91 81086 03000

Join us Telegram