An official report has stated that in July 2023, a total of 388 infrastructure projects, each involving investments exceeding Rs 150 crore, have experienced cost overruns totaling more than Rs 4.65 lakh crore.
The report is responsible for overseeing projects with a budget of Rs 150 crore or more and is issued by the Ministry of Statistics and Programme Implementation. It reveals that out of a pool of 1,646 projects, 388 have encountered cost overruns, while 809 projects have suffered delays.
Estimated Completion Cost
The initial estimated cost for these 1,646 infra projects stood at Rs 23,92,837.89 crore, but their anticipated completion costs are now projected to reach Rs 28,58,394.39 crore. This translates to an overall cost overrun of Rs 4,65,556.50 crore, equivalent to 19.46% of the original estimate, as detailed in the ministry’s latest report for July 2023.
Up until the month of July, a total expenditure of Rs 15,21,550.38 crore had been incurred on these projects, representing 53.23% of the anticipated costs. However, the report indicates that the number of delayed projects dropped to 602 when delays were assessed based on the most recent completion schedules.
Moreover, the report highlights that for 345 projects, neither the year of commissioning nor the tentative gestation period has been reported. Among the 809 delayed projects, 177 have experienced delays ranging from 1 to 12 months, 192 have been behind schedule for 13 to 24 months, 318 projects have been delayed for 25 to 60 months, and 122 projects have experienced delays exceeding 60 months. The average delay across these 809 projects amounts to 37.44 months.
Why the delay?
Various reasons for these delays have been cited by the project implementing agencies, including setbacks related to land acquisition, the process of securing forest and environmental clearances, and the absence of necessary infrastructure support and connections. Other contributing factors encompass difficulties in securing project financing, finalizing detailed engineering plans, scope alterations, delays in tendering, ordering, and equipment supply, as well as law and order issues.
Additionally, the report identifies state-wise lockdowns due to COVID-19, imposed in 2020 and 2021, as an additional factor impacting project implementation schedules. It further notes that project executing agencies are often not reporting revised cost estimates and commissioning schedules for many projects, which implies that the figures related to time and cost overruns may be underreported.
(With PTI Inputs)