In October, 411 Infrastructure Projects Exhibit Cost Overruns Exceeding Rs 4.31 Lakh Crore
In October of this year, 411 infrastructure projects, each requiring an investment of Rs 150 crore or more, have encountered cost overruns exceeding Rs 4.31 lakh crore. According to a report by the Ministry of Statistics and Programme Implementation, which is responsible for monitoring projects valued at Rs 150 crore and above, out of a total of 1,788 projects, 411 have experienced cost overruns, and 837 projects are facing delays.
The original cost for implementing the 1,788 projects was Rs 24,78,446.60 crore. However, their anticipated completion cost is now projected to be Rs 29,09,526.63 crore, indicating an overall cost overrun of Rs 4,31,080.03 crore, which accounts for 17.39 percent of the original cost, as per the ministry's October 2023 report.
Expenditure incurred on these projects until October 2023 amounted to Rs 15,27,102.91 crore, representing 52.49 percent of the projects' anticipated cost. The report notes that the number of delayed projects decreases to 628 if the delay is assessed based on the latest completion schedule.
Moreover, the report highlights that 290 projects lack information on the year of commissioning or the tentative gestation period.
Among the 837 delayed projects, 202 have delays ranging from 1 to 12 months, 188 have been delayed for 13 to 24 months, 324 projects for 25 to 60 months, and 123 projects have been delayed for more than 60 months. The average time overrun in these 837 delayed projects is 36.94 months.
Various reasons for time overruns have been cited by project implementing agencies. These include delays in land acquisition, obtaining forest and environment clearances, insufficient infrastructure support, and linkages. Other contributing factors encompass delays in securing project financing, finalising detailed engineering, changes in scope, tendering, ordering and equipment supply, and law and order issues.
The report also attributes state-wise lockdowns due to COVID-19, imposed in 2020 and 2021, as a factor causing delays in project implementation. It notes that project executing agencies often do not report revised cost estimates and commissioning schedules, suggesting that time/cost overrun figures may be underreported.
