As many as 470 infrastructure projects, each worth Rs 150 crore or more, have been hit by cost overruns totalling more than Rs 4.38 lakh crore, according to a report.
The Ministry of Statistics and Programme Implementation monitors infrastructure projects worth Rs 150 crore and above. Of the 1,737 such projects, 470 reported cost overruns and 525 were delayed.
“Total original cost of implementation of the 1,737 projects was Rs 22,33,409.53 crore and their anticipated completion cost is likely to be 26,71,440.77 crore, which reflects overall cost overruns of 4,38,031.24 crore (19.61 per cent of original cost), ” the ministry’s latest report for April 2021 said.
According to the report, the expenditure incurred on these projects till April 2021 is Rs 13,16,032.62 crore, which is 49.26 per cent of the anticipated cost of the projects.
However, the report said that the number of delayed projects decreases to 375 if the delay is calculated on the basis of the latest schedule of completion.
Further, for 988 projects neither the year of commissioning nor the tentative gestation period has been reported.
Out of 525 delayed projects, 106 projects have an overall delay in the range of 1-12 months, 123 projects (13-24 months), 179 projects (25-60 months) and 117 projects (61 months and above).
The average time overrun in these 525 delayed projects is 45.63 months.
Reasons for time overruns as reported by various project implementing agencies include delay in land acquisition, delay in obtaining forest and environment clearances, and lack of infrastructure support and linkages.
Delay in tie-up for project financing, delay in finalisation of detailed engineering, change in scope, delay in tendering, ordering and equipment supply, and law and order problems, among others, are the other reasons, the report said.
The report also cited ‘state-wise lockdown due to COVID-19’ as a reason for the delay in implementation of these projects.
It has also been observed that project agencies are not reporting revised cost estimates and commissioning schedules for many projects, which suggests that time/cost overrun figures are underreported, it added.
News source- Economic Times