Infrastructure projects continue to show cost overruns: MoSPI


Nearly 432 infrastructure projects, each worth Rs 150 crore or more, have been hit by cost overruns of over Rs 4.29 lakh crore owing to delays and other reasons, according to a report.


The Ministry of Statistics and Programme Implementation monitors infrastructure projects worth Rs 150 crore and above. Of the 1,670 such projects, 432 reported cost overruns and 505 time escalation.


“Total original cost of implementation of the 1,670 projects was Rs 20,58,193.26 crore and their anticipated completion cost is likely to be Rs 24,87,361.54 crore, which reflects overall cost overruns of Rs 4,29,168.28 crore (20.85 percent of original cost),” the ministry’s latest report for July 2020 said.


The expenditure incurred on these projects till July 2020 is Rs 11,51,222.81 crore, which is 46.28 percent of the anticipated cost of the projects.


However, it said that the number of delayed projects decreased to 418 if delay is calculated on the basis of the latest schedule of completion.


Further, the report said that for 945 projects neither the year of commissioning nor the tentative gestation period has been reported.


Out of 505 delayed projects, 120 have overall delay in the range of 1 to 12 months, 118 have delays of 13 to 24 months, 157 reflect delay in the range of 25 to 60 months and 110 projects show delays of 61 months and above.


The average time overrun in these 505 delayed projects is 43.49 months.


The brief reasons for time overruns as reported by various project implementing agencies are delay in land acquisition, delay in obtaining forest/environment clearances and lack of infrastructure support and linkages.


Besides, there are other reasons like delay in tie-up of project financing, delay in finalisation of detailed engineering, change in scope, delay in tendering, ordering and equipment supply, law and order problems, geological surprises, pre-commissioning teething troubles and contractual issues, among others, the report said.


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 under-reported, the report stated.