Overrun cost of government\'s infra projects

New Delhi: As many as 343 infrastructure projects worth investment of over Rs 150 crore each have been hit by cost overruns of more than Rs 4.5 lakh crore. However, the cost of expenditure incurred on these projects till December 2022 was over Rs 13.45 lakh crore, or 54.13 per cent of the anticipated cost of the projects, according to a government report.

“Out of 1,438 projects, 343 reported cost overruns and as many as 835 projects were delayed for implementation. The total original cost of implementation of the 1438 projects was Rs 20,35,794.75 crore and their anticipated completion cost is likely to be Rs 24,86,069.52 crore with the overall cost overruns of Rs 4,50,274.77 crore or 22.12 per cent of original cost,” the ministry of statistics and programme implementation said in its latest report for December 2022.

The ministry, however, monitors all the infrastructure projects of Rs 150 crore and above and the expenditure incurred on these projects till December 2022 was Rs 13,45,794.16 crore, or 54.13 per cent of the anticipated cost of the projects. “Whereas the number of delayed projects decreases to 673 if delay is calculated on the basis of the latest schedule of completion,” it said.

What has been also observed by the ministry is that almost all project agencies are not reporting revised cost estimates and commissioning schedules for many projects, which suggests that the time as well as the cost overrun figures are under-reported.

Further, the report also showed that for 342 projects neither the year of commissioning nor the tentative gestation period has been reported. Out of the 835 delayed projects, 160 have overall delays in the range of 1-12 months, almost 134 projects have been delayed for 13-24 months, 411 for 25-60 months and 130 have been delayed for 61 months and above,” it showed.

The ministry also said the average time overrun in these 835 delayed projects is 40.5 months. “The 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,” it said.

“Delay in tie-up for project financing, finalisation of detailed engineering, change in scope, tendering, ordering and equipment supply, and law and order problems were among the other reasons. Besides, the state-wise lockdowns due to COVID-19, imposed in 2020 and 2021, are a reason for the delay in implementation of these projects,” it added.