373 infrastructure projects hit cost overruns of over Rs 3.39 lakh crore: Report

According to the MoSPI report, of the 1,634 infrastructure projects in the country, 373 projects reported cost overruns, while 552 projects saw time escalation.

Published: 09th December 2019 05:31 AM  |   Last Updated: 09th December 2019 12:06 PM   |  A+A-

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By Express News Service

The cost overruns of around 373 infrastructure projects in the country has crossed Rs 3.89 lakh crore, the Ministry of Statistics and Programme Implementation (MoSPI), which monitors infrastructure projects worth Rs 150 crore and above, said in a report. It attributed the cost overruns to delays in case of some of these projects.

According to the MoSPI report, of the 1,634 infrastructure projects in the country, 373 projects reported cost overruns, while 552 projects saw time escalation.

“Total original cost of implementation of the 1,634 projects was Rs 19,40,699.03 crore and their anticipated completion cost is likely to be Rs 23,29,746.02 crore, which reflects overall cost overruns of Rs 3,89,046.99 crore (20.05 per cent of original cost),” the ministry’s latest report for August 2019 said.

According to the report, the expenditure incurred on these projects till August 2019 is Rs 9,75,180.06 crore, which is 41.85 per cent of the anticipated cost of the projects. However, it said, the number of delayed projects decreased to 489 if the delay is calculated on the basis of latest schedule of completion.
Further, it said that for 687 projects, neither the year of commissioning nor the tentative gestation period has been reported.

Out of 552 delayed projects, 181 projects have overall delay in the range of 1-12 months, 128 projects 13-24 months, 127 projects reflect delay in the range of 25-60 months and 116 projects show delay of 61 months and above.

The average time overrun in these 552 delayed projects is 38.89 months.The brief reasons for time overruns, as reported by various project implementing agencies, are delays in land acquisition, forest clearance and supply of equipment.

Besides, there are other reasons like fund constraints, geological surprises, geo-mining conditions, slow progress in civil works, shortage of labour, inadequate mobilisation by the contractor, Maoist problems, court cases, contractual issues, ROU/ROW (right of use/right of way) problems, law and order situation, among others, the report said. It also observed that project agencies are not reporting revised cost estimates and commissioning schedules for many projects, which suggests that time/cost overrun figures are under-reported. (With PTI inputs)

How costs escalated:

  • Delays in land acquisition, forest clearance and supply of equipment

  • Fund constraints

  • Geological suprises

  • Geo-mining conditions

  • Labour shortage

  • Maoist problems

  • Court cases

  • Contractual issues

  • Problems related to ROU/ROW


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