In August of this year, a report by the Ministry of Statistics and Programme Implementation unveiled the grim reality of India’s infrastructure projects. A staggering 412 initiatives, each requiring an investment of Rs 150 crore or more, are plagued by massive cost overruns exceeding Rs 4.77 lakh crore. The ministry is responsible for overseeing projects with budgets of Rs 150 crore and beyond.
Out of a total of 1,762 infrastructure projects scrutinized, a disconcerting 412 projects reported cost overruns, while an additional 830 projects suffered from significant delays. The original projected cost of executing all 1,762 projects amounted to Rs 25,01,400.62 crore. However, the anticipated completion cost has ballooned to approximately Rs 29,78,681.31 crore, resulting in an alarming overall cost overrun of Rs 4,77,280.69 crore, equivalent to a staggering 19.08% of the initial cost.
Escalating costs and anticipated completion
The report also highlighted that the expenditure incurred on these projects until August 2023 stood at Rs 15,57,188.10 crore, representing 52.28% of the expected project costs. Nevertheless, the number of delayed projects reduced to 624 when assessed based on the latest scheduled completion dates.
Further analysis in the report revealed that for 339 projects, neither the year of commissioning nor the tentative gestation period had been reported. Among the 830 delayed projects, 194 experienced delays ranging from 1 to 12 months, 190 were delayed for 13 to 24 months, 323 projects faced delays of 25 to 60 months, and 123 projects suffered delays exceeding a substantial 60 months. The average time overrun for these 830 delayed projects amounted to a disheartening 36.96 months.
Diverse reasons behind delays
The report delved into the reasons behind these time and cost overruns, as reported by various project implementing agencies. Causes cited included delays in land acquisition, protracted processes for securing forest and environmental clearances, and inadequate infrastructure support and linkages. Additionally, hindrances such as delays in securing project financing, finalizing detailed engineering plans, alterations in project scope, issues with tendering, ordering, equipment supply, and law and order problems contributed to the delays.
COVID-19 and reporting lapses
Furthermore, the report attributed delays to state-wise lockdowns imposed due to COVID-19 in 2020 and 2021. Alarmingly, it highlighted lapses in reporting revised cost estimates and commissioning schedules by project executing agencies, suggesting that time and cost overrun figures might be underreported. These findings underscore the pressing need for improved project management and execution to address the complexities afflicting India’s infrastructure development initiatives.