483 infra projects show cost overruns of Rs 4.43 lakh crore

As many as 483 infrastructure projects, each worth Rs 150 crore or more, have been hit by cost overruns totalling more than Rs 4.43 lakh crore, according to a report.

The Ministry of Statistics and Programme Implementation monitors infrastructure projects worth Rs 150 crore and above.

Of the 1,781 such projects, 483 reported cost overruns and 504 were delayed.

“Total original cost of implementation of the 1781 projects was Rs 22,82,160.40 crore and their anticipated completion cost is likely to be Rs 27,25,408.00 crore, which reflects overall cost overruns of Rs 4,43,247.60 crore (19.42% of original cost),” the ministry’s latest report for July 2021 said.

According to the report, the expenditure incurred on these projects till July 2021 was Rs 13,22,515.87 crore, or 48.53 per cent of their anticipated cost.

However, the report said the number of delayed projects decreases to 369 if delay is calculated on the basis of the latest schedule of completion.

Further, for 1,001 projects neither the year of commissioning nor the tentative gestation period has been reported.

Out of the 504 delayed projects, 92 have overall delay in the range of 1-12 months, 118 have been delayed for 13-24 months, 178 for 25-60 months and 116 projects have delays of 61 months and above.

The average time overrun in these 504 delayed projects is 46.85 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 are among the other reasons.

The report also cited state-wise lockdowns 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.