Many infrastructure projects have been affected by cost overruns, a report claimed. According to the Ministry of Statistics and Programme Implementation’s latest report for July 2023, about 388 infrastructure projects have been affected by cost overruns worth more than Rs 4.65 lakh crore in July.
The infrastructure projects each include investment worth Rs 150 crore or more, reported PTI. Based on the ministry’s data, out of the total 1,646 projects, 388 reported cost overruns and about 809 projects faced delays.
The data further revealed that while the total original cost of implementing the 1,646 projects stood at Rs 23,92,837.89 crore, the anticipated completion cost is likely to be around Rs 28,58,394.39 crore due to the overall cost overruns worth Rs 4,65,556.50 crore. The cost overruns comprise almost 20 per cent of the original cost.
The report further added that expenses incurred on these projects stood at Rs 15,21,550.38 crore as of July 2023, almost 53 per cent of the anticipated project costs. Notably, the report stated that the delayed projects tally reduces to 602 if the delay is measured on the basis of the latest completion schedule.
The data noted that 345 projects didn’t record the year of commissioning or the tentative gestation period for them at all. Of the total 809 delayed projects, 177 reported delays in the range of 1-12 months, 192 reported delays ranging from 13-24 months, 318 recorded delays for 25-60 months and 122 projects were delayed by more than 60 months. The report noted that the average time overrun in the delayed projects came up to be 37.44 months.
The report further listed multiple reasons for the delays. These include delays in land acquisition, delays in getting forest and environment clearances, delays in tie-up for project financing, lack of infrastructure support and linkages, delays in finalisng detailed engineering, ordering and equipment supply, and many other factors.
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The ministry’s report also included the impact of the pandemic on the projects. It stated that state-wise lockdowns due to the pandemic in 2020 and 2021 added to the delays. Further, the report noted that project overseeing agencies are not reporting fully the changed cost estimates and commissioning schedules for projects, indicating that the time and cost overrun data is under-reported.