541 infra projects delayed, 479 show cost overruns worth Rs 4.4 lakh crore

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As many as 479 infrastructure projects, each worth Rs 150 crore or more, have been hit by cost overruns totalling more than Rs 4.4 lakh crore, according to a report by the Ministry of Statistics and Programme Implementation. The report also cited ‘state-wise lockdown due to Covid-19 as a reason for the delay in implementation of these projects.

Delayed projects and increasing costs

Of the 1,770 such projects, 479 reported cost overruns and 541 were delayed, as per the report. Delay in land acquisition, obtaining forest and environment clearances, and lack of infrastructure support and linkages are among the top reasons cited by various project implementation agencies.

“Total original cost of implementation of the 1,770 projects was Rs 22,78,368.23 crore and their anticipated completion cost is likely to be Rs 27,19,218.09 crore, which reflects overall cost overruns of Rs 4,40,849.86 crore (19.35 per cent of original cost),” the ministry’s latest report for June 2021 said. According to the report, the expenditure incurred on these projects till June 2021 is Rs 13,22,374.82 crore, which is 48.63% of the anticipated cost of the projects.

Further, for 979 projects neither the year of commissioning nor the tentative gestation period has been reported. However, the report said the number of delayed projects decreases to 396 if delay is calculated on the basis of latest schedule of completion.

Out of 541 delayed projects, 109 projects have overall delay in the range of 1-12 months, 119 (13-24 months), 192 (25-26 months) and 121 projects (61 months and above). The average time overrun in these 541 delayed projects is 45.76 months.

It has also been observed that project agencies are not reporting revised cost estimates and commissioning schedules for many projects, which suggests that time/cost overrun figures are underreported, it added.