As many as 412 infrastructure projects, each worth Rs 150 crore or more, have been hit by cost overruns of over Rs 4.11 lakh crore owing to delays and other reasons, according to a report. The Ministry of Statistics and Programme Implementation monitors infrastructure projects worth Rs 150 crore and above.
Of the 1,683 such projects, 412 reported cost overruns and 471 time escalation. "Total original cost of implementation of the 1,683 projects was Rs 20,65,336.20 crore and their anticipated completion cost is likely to be Rs 24,77,167.67 crore, which reflects overall cost overruns of Rs 4,11,831.47 crore (19.94 per cent of original cost)," the ministry's latest report for June 2020 said.
The expenditure incurred on these projects till June 2020 is Rs 11,21,435.29 crore, which is 45.27 per cent of the anticipated cost. However, it said that the number of delayed projects decreases to 418 if delay is calculated on the basis of latest schedule of completion.
Further, it said that for 979 projects neither the year of commissioning nor the tentative gestation period has been reported. Out of 471 delayed projects, 127 have overall delay in the range of one to 12 months, 112 have delay of 13 to 24 months, 127 reflect delay in the range of 25 to 60 months and 105 projects show delay of 61 months and above.
The average time overrun in these 471 delayed projects is 43.34 months. The brief reasons for time overruns as reported by various project implementing agencies are delay in land acquisition, delay in obtaining forest/environment clearances and lack of infrastructure support and linkages.
Besides, there are other reasons like delay in tie-up of project financing, delay in finalisation of detailed engineering, change in scope, delay in tendering, ordering and equipment supply, law and order problems, geological surprises, pre-commissioning teething troubles and contractual issues, among others, the report said.
It also observed that project agencies are not reporting revised cost estimates and commissioning schedules for many projects, indicating that time or cost overrun figures are under-reported.