Over Rs 4.92 Lakh Crore Cost Overrun Plagues 443 Infrastructure Projects: MoSPI Report

A recent report from the Ministry of Statistics and Programme Implementation (MoSPI) has unveiled staggering cost overruns in the execution of infrastructure projects, highlighting significant challenges in project management and implementation.

According to the report, as many as 443 infrastructure projects, each requiring an investment of Rs 150 crore or more, have encountered cost overruns surpassing Rs 4.92 lakh crore in February 2024. The report underscores the magnitude of financial discrepancies plaguing the infrastructure development landscape.

Out of a total of 1,902 monitored projects, 443 projects have reported cost overruns, while 764 projects have faced delays, according to MoSPI. The original cost of implementing these projects was estimated at Rs 27,08,030.44 crore. However, the anticipated completion cost is projected to escalate to Rs 32,00,507.55 crore, reflecting an alarming cost overrun of Rs 4,92,477.11 crore, equivalent to 18.19 per cent of the initial cost.

Despite the substantial financial outlay, only 52.39 per cent of the anticipated project cost has been incurred as of February 2024, indicating significant expenditure gaps and operational inefficiencies.

The report further reveals that the delay in project completion is a pervasive issue, with 568 projects facing delays when assessed based on the latest schedule of completion. Additionally, 389 projects lack clarity on the commissioning year or gestation period, raising concerns about transparency and accountability in project planning and execution.

Among the delayed projects, 188 face delays ranging from 1 to 12 months, while 116 projects have been stalled for over 60 months. The average time overrun across the 764 delayed projects stands at 36.27 months, further exacerbating concerns regarding project timeline adherence.

Various factors contribute to the time and cost overruns, including delays in land acquisition, obtaining regulatory clearances, and inadequate infrastructure support. Issues such as project financing, engineering finalisation, scope changes, and supply chain disruptions have also impeded project progress.

The report highlights the impact of state-wise COVID-19 lockdowns imposed in 2020 and 2021, further exacerbating delays in project execution. Moreover, the absence of revised cost estimates and commissioning schedules from project executing agencies suggests potential under-reporting of time and cost overruns, indicative of systemic challenges in project monitoring and reporting.

As India grapples with the imperative of robust infrastructure development, the MoSPI report underscores the urgent need for systemic reforms, enhanced transparency, and proactive measures to address the underlying issues hampering efficient project implementation.