In a concerning revelation, as many as 417 major infrastructure projects, each with an investment of Rs 150 crore or more, have encountered cost overruns totaling more than Rs 4.77 lakh crore in September this year, as reported by the Ministry of Statistics and Programme Implementation.
Cost overruns plague 417 infrastructure projects
The ministry, responsible for monitoring infrastructure projects exceeding Rs 150 crore, disclosed that out of a total of 1,763 projects under scrutiny, 417 projects have experienced cost overruns, while 842 projects faced delays in their scheduled completion.
“Total original cost of implementation of the 1,763 projects was Rs 24,86,402.70 crore and their anticipated completion cost is likely to be Rs 29,64,345.13 crore, which reflects overall cost overruns of Rs 4,77,942.43 crore (19.22 per cent of original cost),” the ministry’s latest report for September 2023 said.
As of September 2023, the expenditure incurred on these projects amounts to Rs 15,44,600.67 crore, which represents 52.11 percent of the anticipated cost.
The report highlighted that the number of delayed projects reduced to 617 when calculated based on the latest schedule of completion. Additionally, it noted that for 298 projects, neither the year of commissioning nor the tentative gestation period has been reported.
Out of the 842 delayed projects, 194 are facing delays in the range of 1-12 months, 190 have been delayed for 13-24 months, 323 projects for 25-60 months, and 123 projects have been delayed for more than 60 months. The average time overrun in these delayed projects is reported to be 36.94 months.
Multiple reasons contribute to project delays
Various project implementing agencies attributed the time overruns to factors such as delays in land acquisition, obtaining forest and environment clearances, lack of infrastructure support and linkages, and state-wise lockdowns due to COVID-19 imposed in 2020 and 2021.
Other reasons cited for the delays include complications in tying up project financing, finalisation of detailed engineering, changes in scope, tendering, ordering and equipment supply, as well as law and order problems.
The report also raised concerns about under-reporting, stating that project executing agencies are not consistently reporting revised cost estimates and commissioning schedules for many projects, suggesting that time/cost overrun figures may not accurately reflect the true extent of the issue.