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 Urban

Vedanta Explores Biodiesel Use to Cut Emissions in Odisha

On World Environment Day, Indian mining and metals giant Vedanta Ltd announced plans to explore the use of biodiesel in its commercial vehicle fleet at the Jharsuguda township in Odisha.Vedanta Aluminium, a subsidiary of the group, said it has committed to decarbonising 100 per cent of its light motor vehicle fleet by 2030. As part of this initiative, the company is evaluating biodiesel following successful pilot runs to assess its viability in its commercial vehicles.In addition, Vedanta has started using biomass briquettes made from agricultural residue for co-firing at its Lanjigarh alumina..

Next Story
Infrastructure Transport

Delhi CM Announces Rs 240 Bn Infrastructure Overhaul

Delhi Chief Minister Rekha Gupta has unveiled a Rs 240 billion infrastructure overhaul aimed at transforming the Capital’s road network.Speaking at a press conference on Wednesday, Gupta announced that key arterial roads — Rohtak Road (Punjabi Bagh to Nangloi), Ashram to Badarpur, and MG Road — have now been transferred to the National Highways Authority of India (NHAI). These routes will be upgraded into signal-free corridors featuring comprehensive infrastructure upgrades, including drainage systems, side lanes, and real-time monitoring technologies.“Previously, multiple agencies res..

Next Story
Infrastructure Urban

PCMC Raises Rs 2 bn Via Maharashtra’s First Green Municipal Bond

Describing it as a landmark achievement, the Pimpri Chinchwad Municipal Corporation (PCMC) announced on Tuesday that it successfully raised Rs 2 billion through Maharashtra’s first Green Municipal Bond, drawing an overwhelming response from investors.The bond issue, launched on the BSE’s Electronic Bidding Platform via private placement, attracted bids totalling Rs 5.13 billion —more than five times the initial offer. The base issue of Rs 1 billion was fully subscribed within just one minute of opening, reflecting strong investor confidence, the civic administration said.Offered at a com..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?