PSU cost escalation numbers raise doubts
According to the latest report of the ministry which is in charge of monitoring major projects coming up in the central sector, in some cases, the project costs have remained the same even as the top management has rolled over several times.
Projects like Indian Oil Corporation’s Paradip Refinery, GAIL’s Jagdishpur-Haldia pipeline project and NTPC’s Bongaigaon thermal power project have seen delays of 30-75 months, but reported cost escalation below 20%.
According to an official in the ministry, the low cost escalation in central sector projects is largely on account of old and obsolete data provided by the administrative ministries of the PSEs. “The cost escalation will be 50-60% more than what is reflected in our report if we get authentic data from the ministries. The ministry artificially hold back any increase in cost of PSUs projects even though there may be delays of several years,” the official said on condition of anonymity.
As per statistics ministry report, the Bongaigaon project in Assam has faced a delay of over 40 months but its revised cost of completion has remain unchanged at R4,375.35 crore. The project cost was approved in 2008. The Barh project in Bihar faced a delay of
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