Stalled projects a tall order for CCI

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SummaryThe newly-formed Cabinet Commitment on Investment, floated by the government to fast-track big-ticket projects, has its task cut out.

The newly-formed Cabinet Commitment on Investment (CCI), floated by the government to fast-track big-ticket projects, has its task cut out.

Among the 198 mega central sector projects costing over R1,000 crore under implementation, nearly half, or 81, are running behind schedule. These include seven projects being executed by the railways that are delayed by more than a decade, according to the ministry of statistics and programme implementation’s latest project status estimate (updated till the end of July).

The key reasons for the time overruns, as reported by various project-implementing agencies, include delays in land acquisition and the lack of requisite clearances, especially the nod from the ministry of forests and environment. Other reasons include delay in award of works, lack of skilled manpower, termination of contract, high quoted price in tendering process, law and order issue and poor mobilisation of workers by the contractor. The CCI, cleared by the government on Thursday, seeks to iron out inter-ministerial wrangling and the delays in clearances.

Out the 81 projects hanging fire, 44 had overall delay in the range of 1 to 12 months, 18 projects had a delay in the range of 13 to 24 months, 16 projects were delayed between 25 and 60 months and three projects had recorded delays of 61 months or more, according to the status report.

On account of the delays faced by the projects, the original cost of implementation of the 198 projects on a cumulative basis, pegged at about R6.36 lakh crore, is anticipated to see completion costs surge to R7.38 lakh crore till end-July 2012, which translates into an overall cost overrun of R1.02 lakh crore (about 16% of the original cost).

On a sectoral basis, in the shipping and ports sector, of the five projects worth over R1,000 crore, three are delayed. In the steel sector, out of the six projects, four are delayed, while in the petroleum sector, out of 35 projects, 14 projects are delayed. In the case of railways, out of 40 projects of over R1,000 crore, 14 projects are delayed.

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