News Brief
Infrastructure Projects In India Face Rs 4.31 Lakh Crore Cost Overruns: Official Report
Several infrastructure projects have experienced cost overruns. Representative Image/(Twitter)
An official report has revealed that in October of this year, 411 infrastructure projects, each requiring an investment of Rs 150 crore or more, have experienced cost overruns exceeding Rs 4.31 lakh crore.
The Ministry of Statistics and Programme Implementation, overseeing projects valued at Rs 150 crore and above, reported that out of 1,788 projects, 411 faced cost overruns, and 837 suffered delays.
The original cost of implementing these 1,788 projects was Rs 24,78,446.60 crore, with the anticipated completion cost now expected to be Rs 29,09,526.63 crore.
This indicates an overall cost overrun of Rs 4,31,080.03 crore, equivalent to 17.39 per cent of the original cost, as per the ministry's October 2023 report.
Expenditure on these projects until October 2023 amounted to Rs 15,27,102.91 crore, representing 52.49 per cent of the anticipated cost.
The report notes a decrease in the number of delayed projects to 628, when calculated based on the latest completion schedule.
Additionally, it highlights that 290 projects lack reported commissioning years or tentative gestation periods.
Among the 837 delayed projects, 202 experienced delays of 1-12 months, 188 were delayed for 13-24 months, 324 faced delays of 25-60 months, and 123 projects were delayed for over 60 months.
The average time overrun for these 837 delayed projects was 36.94 months.
Various project implementing agencies cited reasons for time overruns, including delays in land acquisition, obtaining forest and environmental clearances, and insufficient infrastructure support.
Other factors included delays in securing project financing, finalising detailed engineering, changes in scope, tendering, ordering and equipment supply, and law and order issues.
The report also identified state-wise COVID-19 lockdowns in 2020 and 2021 as contributing to project implementation delays.
Furthermore, the report noted a lack of reporting revised cost estimates and commissioning schedules for many projects by project executing agencies, suggesting potential underreporting of time/cost overrun figures.
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