Over 400 Mumbai infra projects hit by cost and time overruns

29 Dec 2020 Editorial Team

As many as 442 infrastructure projects in Mumbai, each worth Rs 150 crore or more, have taken a hit due to cost overruns of more than Rs 4.34 lakh crore.

All infrastructure projects that are worth Rs 150 crore or more are monitored by the Ministry of Statistics and Programme Implementation. Of a total of 1,671 projects, nearly 442 witnessed cost overruns and 536 have suffered postponement.

The total original cost of implementation of nearly 1,671 projects was calculated as Rs 21.21 lakh crore. The expected completion cost is Rs 25.56 lakh crore. It reflects the overall cost overruns of nearly Rs 4.34 lakh crore. It is 20.49% of its original cost.

During November 2020, the expenditure incurred on these projects was Rs 11.94 lakh crore, which is 46.71% of the anticipated costs.

If a delay is calculated based on the latest schedule of completion, then the number of delayed projects gets reduced to 412. For 942 projects, neither the year of commissioning nor the tentative gestation period has been reported.

Of 536 delayed projects, close to 120 have an overall delta of 1-12 months. Whereas, 13 projects are likely to see 13-24 months. Also, 162 indicate delay for 25-60 months and nearly 120 reflect a delay of 61 months and more. Hence, the average time overrun for 536 delayed projects is 44.15 months.

The reasons behind the time overruns:

Delay in tie-up for project financing
Delays in finalisation of detailed engineering
Change in scope
Delay in tendering
Ordering and equipment supply
Law and order issues
Delays in land acquisition
Delays in obtaining forest and environmental clearances
Lockdown in various states in the country

Various project agencies have not reported revisited cost estimates and commissioning schedules for projects. It indicates the time and cost overrun figures to be under-reported.

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As many as 442 infrastructure projects in Mumbai, each worth Rs 150 crore or more, have taken a hit due to cost overruns of more than Rs 4.34 lakh crore. All infrastructure projects that are worth Rs 150 crore or more are monitored by the Ministry of Statistics and Programme Implementation. Of a total of 1,671 projects, nearly 442 witnessed cost overruns and 536 have suffered postponement. The total original cost of implementation of nearly 1,671 projects was calculated as Rs 21.21 lakh crore. The expected completion cost is Rs 25.56 lakh crore. It reflects the overall cost overruns of nearly Rs 4.34 lakh crore. It is 20.49% of its original cost. During November 2020, the expenditure incurred on these projects was Rs 11.94 lakh crore, which is 46.71% of the anticipated costs. If a delay is calculated based on the latest schedule of completion, then the number of delayed projects gets reduced to 412. For 942 projects, neither the year of commissioning nor the tentative gestation period has been reported. Of 536 delayed projects, close to 120 have an overall delta of 1-12 months. Whereas, 13 projects are likely to see 13-24 months. Also, 162 indicate delay for 25-60 months and nearly 120 reflect a delay of 61 months and more. Hence, the average time overrun for 536 delayed projects is 44.15 months. The reasons behind the time overruns: Delay in tie-up for project financing Delays in finalisation of detailed engineering Change in scope Delay in tendering Ordering and equipment supply Law and order issues Delays in land acquisition Delays in obtaining forest and environmental clearances Lockdown in various states in the country Various project agencies have not reported revisited cost estimates and commissioning schedules for projects. It indicates the time and cost overrun figures to be under-reported. Image Source

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