Nearly 450 infrastructure projects face cost overrun in India

Infrastructure projects face cost overrun: An official report revealed that 449 infrastructure projects in India, each requiring an investment of Rs 150 crore or more, are experiencing a cost overrun exceeding Rs 5.01 lakh crore as of March 2024. The Ministry of Statistics and Programme Implementation (MoSPI), responsible for monitoring such projects, reported that out of 1,873 projects being tracked, 449 have reported cost overruns and 779 are facing delays.

The original cost of these 1,873 projects was Rs 26,87,535.69 crore, but their anticipated completion cost is now estimated to be Rs 31,88,859.02 crore, indicating an overall cost overrun of Rs 5,01,323.33 crore, which is 18.65 per cent of the original cost. The report also noted that as of March 2024, Rs 17,11,648.99 crore has already been spent on these projects, accounting for 53.68 per cent of the anticipated cost.

Despite the high number of delayed projects, the report highlighted a decrease in the total number of delayed projects to 567 when calculated based on the latest schedule of completion. It also noted that for 393 projects, neither the year of commissioning nor the tentative gestation period has been reported.

Among the delayed projects, 202 are delayed by 1-12 months, 181 by 13-24 months, 277 by 25-60 months, and 119 projects have been delayed for over 60 months. The average time overrun for these 779 delayed projects is 36.04 months.

The report cited various reasons for the delays, including issues related to land acquisition, obtaining forest and environment clearances, and lack of infrastructure support and linkages. Other reasons include delays in securing project financing, finalization of detailed engineering, changes in scope, tendering, ordering and equipment supply, as well as law and order problems.

Additionally, the report mentioned that state-wise lockdowns due to COVID-19, imposed in 2020 and 2021, have also contributed to delays in project implementation. It raised concerns that project executing agencies are not reporting revised cost estimates and commissioning schedules for many projects, indicating that the time/cost overrun figures could be under-reported.

(with PTI inputs)