Massive Cost Overruns Plague Infrastructure Projects, Rs 4.40 Lakh Crore Exceeds Budget
In a startling revelation, an official report from the Ministry of Statistics and Programme Implementation has exposed a dire situation in India's infrastructure landscape.
The report highlights that a staggering 421 infrastructure projects, each requiring an investment of Rs 150 crore or more, have encountered substantial cost overruns, collectively exceeding Rs 4.40 lakh crore as of November 2023.
As per the reports in the media that have quoted the report, out of a total of 1,831 monitored projects, 421 faced cost overruns, while 845 suffered delays.
The original cost projection for these ventures was Rs 25,10,577.59 crore, with an alarming 17.54 per cent overall cost overrun, projecting a completion cost of Rs 29,50,997.33 crore.
As of November 2023, the cumulative expenditure on these projects stands at Rs 15,58,038.07 crore, constituting 52.80 per cent of the anticipated cost. The report also discloses that when considering the latest completion schedule, the number of delayed projects drops to 629.
Breaking down the delays, 204 projects are behind schedule by 1-12 months, 198 projects are delayed by 13-24 months, 322 projects face delays of 25-60 months, and 121 projects have been delayed for over 60 months. The average time overrun across all these projects is a significant 36.64 months.
Various project implementing agencies have cited a multitude of reasons for these time overruns.
Delays in land acquisition, obtaining clearances, insufficient infrastructure support, and linkages are identified as primary culprits. Other contributing factors include delays in project financing, finalising detailed engineering, scope changes, tendering, ordering and equipment supply, law and order issues, and the lingering impact of state-wise COVID-19 lockdowns in 2020 and 2021.
The report underscores the urgent need for a comprehensive review and effective management of these projects to mitigate further escalations in both cost and time.
The scale of the issue emphasises the challenges faced by India in achieving timely and cost-effective infrastructure development, calling for concerted efforts and strategic interventions from relevant authorities.
