361 infra projects show cost overruns of over Rs 3.77 trillion, says report

Representative Image

As many as 361 infrastructure projects, each worth Rs 150 crore or more, have shown cost overruns to the tune of over Rs 3.77 trillion owing to delays and other reasons, a report said.

The Ministry of Statistics and Programme Implementation monitors infrastructure projects worth Rs 150 crore and above. Of these 1,623 projects, 361 reported cost overruns and 496 time escalation.

"Total original cost of implementation of the 1623 projects was Rs 19,25,107.47 crore and their anticipated completion cost is likely to be Rs 23,02,230.50 crore, which reflects overall cost overruns of Rs 3,77,123.03 crore (19.59% of original cost)," the ministry's latest report for May 2019 said.

According to the report, the expenditure incurred on these projects till May 2019 was Rs 8,91,512.91 crore, which is 38.72 per cent of the anticipated cost of the projects. However, it said the number of delayed projects decreases to 399 if delay is calculated on the basis of the latest schedule of completion.

For 684 projects, neither the year of commissioning nor the tentative gestation period has been reported. Out of 496 delayed projects, 166 projects have overall delay in the range of 1 to 12 months, 105 projects 13 to 24 months, 128 projects reflect delay in the range of 25 to 60 months and 97 projects show 61 months and above delay.

The average time overrun in these 496 delayed projects is 36.98 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.



Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

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