412 Infrastructure Projects Reflect Cost Overruns Worth Rs 4.77 Lakh Crore In August


Around 412 infrastructure projects, each requiring an investment exceeding Rs 150 crore, experienced cost overruns surpassing Rs 4.77 lakh crore in August this year, data from the Ministry of Statistics and Programme Implementation revealed. The report from the ministry noted that out of 1,762 infrastructure projects valued at Rs 150 crore or more, 412 exceeded their budgets, and 830 experienced delays. 

The initial cost of these projects was Rs 25,01,400.62 crore, but they are now projected to cost Rs 29,78,681.31 crore in total, indicating a substantial cost overrun of Rs 4,77,280.69 crore, equivalent to 19.08% of the original estimate, reported PTI. 

As per the report, the cumulative expenditure on these projects until August 2023 amounted to Rs 15,57,188.10 crore, representing 52.28% of the expected project costs. Interestingly, when calculating delays based on the most recent completion schedule, the number of projects experiencing delays decreased to 624.

Moreover, 339 projects didn’t provide information regarding their expected commissioning year or the tentative gestation period. Among the 830 projects facing delays, 194 experienced setbacks ranging from 1 to 12 months, while 190 projects were postponed by 13 to 24 months. 323 projects encountered delays spanning 25 to 60 months, while 123 projects grappled with extensive delays exceeding 60 months. The collective average time overrun for these 830 delayed projects stands at a substantial 36.96 months, highlighting the complexity of the challenges they face.

The reported reasons for time overruns in these projects included delays in land acquisition, environmental clearances, and lack of infrastructure support. Further challenges in securing tie-ups for project financing, finalising detailed engineering, scope changes, tendering, ordering, and equipment supply added to the delays. Additionally, law and order problems also extended the completion timelines. 

Delays caused by COVID-19-related state lockdowns in 2020 and 2021 further added to the problems in project implementation. The report noted that several project execution agencies didn’t provide revised cost estimates and commissioning schedules for multiple projects, indicating that time and cost overrun data could be under reported.

Based on the ministry’s report for July 2023, about 388 infrastructure projects were affected by cost overruns worth over Rs 4.65 lakh crore in the month.

Also Read : China’s New Foreign Relations, Anti-Espionage Laws ‘Great Concern’ For EU Businesses, Says Trade Commissioner


Source link

Leave a Reply