Total cost overruns on infrastructure projects currently at Rs4.7 lakh crore

29 Aug 2022 , 07:28 AM

Cost overruns of more than Rs4.7 lakh crore have affected 386 infrastructure projects, each requiring an expenditure of at least Rs150 crore.

Out of 1,505 projects, 386 reported cost overruns, and as many as 661 projects were delayed, according to the Ministry of Statistics and Programme Implementation, which oversees infrastructure projects costing Rs150 crore and above.

According to the ministry’s most recent report for July 2022, “Total original cost of implementation of the 1505 projects was Rs21,21,793.23 crore and their anticipated completion cost is likely to be Rs25,92,537.79 crore, which reflects overall cost overruns of Rs4,70,744.56 crore (22.19% of original cost).

The study states that the amount spent on these projects up till July 2022 was Rs13,50,275.69 crore or 52.08% of the project’s estimated costs.

If the number of projects is reduced based on the most recent completion timetable, the number of projects that are delayed drops to 511.

Additionally, research revealed that neither the tentative gestation length nor the commissioning year had been disclosed for 581 projects.

Out of the 661 projects that have been postponed, 134 have overall delays between 1 and 12 months, 114 have delays between 13 and 24 months, 289 have delays between 25 and 60 months, and 124 have delays of 61 months or more.

These 661 projects are behind schedule on average by 41.83 months.

Time overruns have been attributed to a number of factors, including a delay in land acquisition, a delay in securing environmental and forest clearances, and a lack of infrastructure support and connections.

Among the additional causes are issues with law and order, the completion of technical engineering, scope changes, tendering, ordering, and equipment delivery.

The report also attributed the delay in the execution of these projects to state-wide lockdowns brought on by COVID-19.

Further evidence that time/cost overrun figures are underreported, it was noted, comes from the fact that many project agencies fail to publish revised cost estimates and commissioning timelines.

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