Cost overruns to affect 411 infra projects in October: Report

In October 2023, an official report from the Ministry of Statistics and Programme Implementation revealed that 411 infrastructure projects, each requiring an investment of Rs 150 crore or more, experienced cost overruns exceeding Rs 4.31 lakh crore. Out of a total of 1,788 projects monitored by the ministry, 411 reported cost overruns, and 837 projects faced delays.

The original cost of implementing these 1,788 projects was Rs 24,78,446.60 crore, with an anticipated completion cost of Rs 29,09,526.63 crore, indicating an overall cost overrun of Rs 4,31,080.03 crore, equivalent to 17.39 per cent of the original cost.

As of October 2023, the expenditure incurred on these projects amounted to Rs 15,27,102.91 crore, representing 52.49 per cent of the anticipated project cost. However, the number of delayed projects decreases to 628 when considering the delay based on the latest schedule of completion.

The report highlighted that 290 projects did not report the year of commissioning or the tentative gestation period. Out of the 837 delayed projects, 202 experienced delays in the range of 1-12 months, 188 were delayed for 13-24 months, 324 faced delays of 25-60 months, and 123 projects were delayed for more than 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 environment clearances, and insufficient infrastructure support. Other contributing factors encompassed delays in project financing tie-ups, finalisation of detailed engineering, changes in scope, tendering, ordering and equipment supply, as well as law and order issues.

The report also identified state-wise COVID-19 lockdowns in 2020 and 2021 as a factor impeding project implementation. Moreover, it noted a lack of reporting on revised cost estimates and commissioning schedules for many projects, indicating potential underreporting of time and cost overrun figures by project executing agencies.

(With PTI inputs)