401 infrastructure projects show cost overrun of Rs 4.06 trillion: Report

Of the 1,701 such projects, 401 projects reported cost overruns and 583 projects time escalation
As many as 401 infrastructure projects, each worth Rs 150 crore or more, have been hit by cost overruns of over Rs 4.06 trillion owing to delays and other reasons, according to a report.

The Ministry of Statistics and Programme Implementation monitors infrastructure projects worth Rs 150 crore and above.

Of the 1,701 such projects, 401 projects reported cost overruns and 583 projects time escalation.

"Total original cost of implementation of the 1701 projects was Rs 20,65,739.00 crore and their anticipated completion cost is likely to be Rs 24,71,954.78 crore, which reflects overall cost overruns of Rs 4,06,215.78 crore (19.66 per cent of original cost)," the ministry's latest report for December 2019 said.

The expenditure incurred on these projects till December 2019 was Rs 10,89,178.11 crore, which is 44.06 per cent of the anticipated cost of the projects.

However, it said the number of delayed projects decreases to 483 if delay is calculated on the basis of latest schedule of completion.

Further, it said that for 748 projects neither the year of commissioning nor the tentative gestation period has been reported.

Out of 583 delayed projects, 183 have overall delay in the range of 1 to 12 months, 129 in the range of 13 to 24 months, 146 reflect delay in the range of 25 to 60 months and 125 projects show delay of 61 months and above.

The average time overrun in these 583 delayed projects is 39.40 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, indicating that time or cost overrun figures are under-reported.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel