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It is Time to Act Fast, Mr Modi

738 prime projects stuck with over Rs 2 lakh crore cost hikes threaten the PM’s development dream

Published: 03rd May 2015 06:00 AM  |   Last Updated: 03rd May 2015 09:02 AM   |  A+A-

mr modi

NEW DELHI:Narendra Modi may prefer the Girl lion to be the national animal of India, but the tortoise was the UPA’s symbol of governance. Racing it is the hare representing cost over-runs, which in a mixed bag of policy paralysis and cost escalation means that the taxpayer’s money is wasted by negligence, inaction and inefficiency of successive governments. Sectors most hit are infrastructure, roads, railways and power. The spend on 738 government projects budgeted at Rs 9,77, 589 crore has gone up to Rs 11,84,766 crore due to delays—an addition of Rs 2 lakh crore, which is more than the money involved in the 2G spectrum and coal block auctions scams. The Modi government has eased guidelines to speed up projects, but the tortoise is ahead of the hare.

In December 2003, NDA I, headed by Atal Bihari Vajpayee, gave approval to Haraganjo-Maibang project worth Rs 212 crore to transform the rural road infrastructure. After 12 years and a cost overrun of Rs 174 crore, it was finally commissioned in March 2015. At least 21 other projects worth Rs 4,142 crore, cleared by Vajpayee in 2003, are likely to be commissioned only in 2015. Data shows 315 big-ticket development projects are hit by policy paralysis, causing delays  from one to 10 years. The delay surpasses the total budget of the Agriculture, Rural Development, Internal Security and Health ministry’s put together for 2015-16. The bottlenecks threaten to overshadow Modi’s economic reform push.

Last week, Union Minister for Road Transport Nitin Gadkari announced projects worth Rs 15,000 crore to boost road connectivity in the Northeast. Vajpayee had approved a proposal for NH-54 in Assam-Mizoram for Rs 196 crore. Supposed to be completed in July 2009, it is now expected be commissioned in June 2015, adding  Rs 167 crore. Of 738 development projects of Rs 150 crore and above being monitored by the Centre, 224 projects hit by the delays are likely to drill bigger holes in the government pocket.

Just sample this: Patna-Ganga Bridge Costing Rs 624 crore was approved by Vajpayee in April 2001. Expected to be commissioned in October 2007, it is likely to get over in December 2015 at a cost of Rs 2921 crore—approximately a 367 per cent jump from the original cost with a delay of over eight years. The Rs 332 crore  Forbesganj to Simrahi project on National Highway-57 is delayed by almost seven years; cleared in 2003, it is scheduled to be completed in 2015 by spending Rs 550 crore. Another project of National Highway Authority of India (NHAI) at Surat-Hazira port section is delayed by almost three years. Agra Bypass (NS-1) NH-2, 3 is delayed by eight years while causing additional expenditure of Rs 110 crore. 134 NHAI projects under monitoring of the Centre, are either facing delays or cost overrun.

The impediments being faced by regulatory authorities at the Centre have not even spared construction of extension building to the Parliament House annexe. Approved in May 2009 it has been delayed for more than two years. Similarly, construction of additional complex for the Supreme Court near Pragati Maidan has been hit; approved in July 2012, it is delayed by 16 months.

Another CPWD project worth Rs 225 crore in West Bengal for academic-cum-residential campus was cleared in January 2009 by the UPA regime but has been delayed by three years. Ministry of Statistics and Programme Implementation (MoSPI) data says 16 projects of CPWD are either showing time or cost over-run.

Subansiri, the Assam-based National Hydroelectric Power Corporation (NHPC) project that was cleared in September 2003 during NDA I, is delayed by nine years. It is likely to be commissioned during the fag end of NDA II, costing Rs 15, 300 crore, more than double the original cost of Rs 6,285 crore. It is among the 26 power projects that have been stalled due to various inter-agency bottlenecks. National Thermal Power Corporation’s (NTPC) Tapovan-Vishnugad project cleared by UPA in November 2006 to be completed by March 2013 has been delayed by five years and is expected to be commissioned in May 2018 with a Rs 1,000 crore cost escalation.

 Prime Minister Modi recently launched the interactive platform PRAGATI to monitor and review important programmes and projects, besides directing Prime Minister’s Office (PMO) to monitor all big projects involving large investments. An official said projects cleared during the last one year of Modi government are monitored closely by PMO and delays in procedures are immediately flagged.  The Bankura-Damodar project of the South Eastern Railway cleared in March 1998 may be commissioned in December 2019, with a 14 year dealy and cost excess of 2,000 per cent. The original cost of Rs 111.90 crore is expected to reach Rs 2,371.85 crore.

The Nandyal-Yerraguntala rail project was approved in March 1996 to be ready by February 2009 but with a six year delay and a loss of over Rs 650 crore, it is likely to be ready this year. Similarly, Katihar-Jogbani project of Northeast Frontier Railway Zone, cleared in September 2001 by the Vajpayee government, is running late by eight years and may take off in March 2018 with a cost overrun of over Rs 1,200 crore.

MoSPI data suggests that even projects cleared during the UPA regime failed to take off on time. Development of B-193 cluster fields by Oil and Natural Gas Corporation (ONGC), cleared during the UPA I regime in June 2007, is delayed by five years with a cost overrun of approximately 74 per cent. Mumbai Urban Transport Project Phase-II, cleared in April 2008 by UPA I is delayed by five years and will cost an additional Rs 1,500 crore. Ramanagaram-Mysore doubling with electrification, approved by UPA, is delayed by three years with a cost overrun of approximately Rs 400 crore.

Underdeveloped states are bearing the brunt of regulatory bottlenecks. An analysis of 738 projects reveals that 17 in Andhra Pradesh are either facing time overrun or cost overruns. 29 projects in Assam are delayed with cost overrun running from Rs 100 crore to Rs 200 crore. Bihar is facing delays in 21 projects.

When NDA II came to power in May last year, it decided to tweak the rules and regulatory framework to ensure ease of doing business for both public and private projects. The PMO has directed a committee headed by Ajit Seth with secretaries of infrastructure ministries as members for monthly review of all the big-ticket projects. A committee in the respective ministries for fixing of responsibility for time and cost overruns and regular review of infrastructure projects is in place. The government has also formed Central Sector Projects Coordination Committees in the states under Chief Secretaries for removal of bottlenecks and for facilitating the speedy implementation of major projects.

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