The government?s ambitious Golden Quadrilateral (GQ) project to build 5,846 km of roads has so far seen the original project cost escalating by Rs 12,000 crore at 1999 prices. This works out to one-fifth of the total project cost. Some 233 km of the GQ is yet to be completed, two years behind the original deadline of December 2005.
The project was estimated to cost Rs 60,000 crore. The additional cost has been largely because of rising input costs and interest burden. The GQ was the flagship infrastructure project of the previous BJP-led NDA alliance administration at the Centre.
The last mile segment is still going to take some time yet as the rate of progress has really hit a snail?s pace. In September 2007, only 12 km of new roads was built under the project?that means a rate of progress of less than half a km a day. At the end of August, 5,601 km under the GQ was built and at the end of September, only 5,613 km was completed across various stretches
The GQ was launched in 1999 as the first phase of the National Highway Development Programme. It envisaged 5,846 km of four- and six-lane express highways connecting Delhi, Mumbai, Chennai and Kolkata.
While the time overrun is a major contributor to the escalation in prices, experts say that since 2005, input prices have also gone up by 20%. That estimate is a conservative figure, according to industry experts.
?The overall cost overrun has been 20% so far, with a small stretch yet to be completed. On certain stretches, the cost escalation has been 100%,? said a ministry of road transport & highways official. Stretches in Bihar and the Orissa-Andhra Pradesh border have also suffered setbacks due to Naxalism, the official said.
Harsh Shrivastava, senior VP, marketing, Feedback Ventures, explained that as projects were delayed, machinery was left idle with a recurring cost. Companies also have to bear wage increments, which are in turn realised from project costs.