Infra Projects Saw Rs 4.82 Lakh Crore Of Cost Overrun In December: Official Report

A recent report from the Ministry of Statistics and Programme Implementation (MoSPI) indicated that 431 infrastructure projects, each with an investment exceeding Rs 150 crore, are grappling with a cost overrun of over Rs 4.82 lakh crore as of December 2023. 

The report, which monitors 1,820 projects, unveiled a grim scenario with 23.7 per cent of the monitored projects reporting cost overruns, highlighting the challenges faced by major ventures in India.

The total original cost for the 1,820 projects was estimated at Rs 25,87,066.08 crore, but their anticipated completion cost is projected to surge to Rs 30,69,595.88 crore, signaling an alarming 18.6 per cent deviation from the initial projections. The report further disclosed that the expenditure incurred on these projects until December 2023 stands at Rs 16,26,813.80 crore, constituting 53 per cent of the anticipated cost.

Project delays also loom large, with 848 out of the 1,820 projects experiencing setbacks. Although the number of delayed projects decreased to 638 when calculated based on the latest completion schedules, the average time overrun for the 848 delayed projects is a significant 36.59 months. 

A concerning aspect highlighted in the report is the lack of information for 298 projects, where neither the year of commissioning nor the tentative gestation period has been reported. This opacity raises questions about the transparency and completeness of the data, potentially masking the true extent of challenges faced by these projects.

The reasons behind these setbacks are diverse, ranging from delays in land acquisition and obtaining environmental clearances to insufficient infrastructure support. Additionally, issues such as delays in securing project financing, finalising detailed engineering, changes in project scope and law and order problems have contributed to the quagmire.

The report underlined the impact of state-wise lockdowns imposed due to the COVID-19 pandemic in 2020 and 2021, further exacerbating the delays in project implementation. It also pointed out a disconcerting trend where project executing agencies fail to report revised cost estimates and commissioning schedules for numerous projects, hinting at potential underreporting of time and cost overruns.