431 Infra Projects Hit By Cost Overrun Of ₹4.80 Lakh Cr In January

431 Infra Projects Hit By Cost Overrun Of ₹4.80 Lakh Cr In January

Out of the 1,821 projects, 431 reported cost overrun and 780 projects were delayed.

PTIUpdated: Sunday, February 25, 2024, 12:14 PM IST
article-image
Infra projects show cost overruns | Unsplash - Ricardo Gomez Angel

As many as 431 infrastructure projects, each entailing an investment of Rs 150 crore or above, were hit by cost overrun of more than Rs 4.80 lakh crore in January 2024, an official report stated.

According to Ministry of Statistics and Programme Implementation (MoSPI), which monitors infrastructure projects worth Rs 150 crore and above, out of 1,821 projects, 431 reported cost overrun and 780 projects were delayed.

"Total original cost of implementation of the 1,821 projects was Rs 26,09,679.38 crore and their anticipated completion cost is likely to be Rs 30,90,135.99 crore, which reflects overall cost overruns of Rs 4,80,456.61 crore (18.41 per cent of original cost)," the ministry's latest report for January 2024 said.

Crucial projects delayed

According to the report, the expenditure incurred on these projects till January 2024 is Rs 16,43,821.69 crore, which is 53.20 per cent of the anticipated cost of the projects.

However, it stated that the number of delayed projects decreases to 583 if delay is calculated on the basis of the latest schedule of completion.

Further, it said that for 373 projects, neither the year of commissioning nor the tentative gestation period has been reported.

Delay Range: 1 month to 3 years

Out of the 780 delayed projects, 194 have overall delays in the range of 1-12 months, 187 have been delayed for 13-24 months, 284 projects for 25-60 months, and 115 projects have been delayed for more than 60 months. The average time overrun in these projects is 36.13 months.

Reasons for time overrun, as reported by various project implementing agencies, include delay in land acquisition, in obtaining forest and environment clearances, and lack of infrastructure support and linkages. Delays in tie-up for project financing, finalisation of detailed engineering, change in scope, tendering, ordering and equipment supply, and law and order problems are among the other reasons.

The report also cited state-wise lockdowns due to COVID-19 (imposed in 2020 and 2021) as a reason for the delay in implementation of these projects.

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

RECENT STORIES

Getting A Grip On Inflation Dynamics

Getting A Grip On Inflation Dynamics

Global IT Crisis July 19: Flawed CrowdStrike Update Causes Widespread Disruptions In Microsoft...

Global IT Crisis July 19: Flawed CrowdStrike Update Causes Widespread Disruptions In Microsoft...

Streamlining The Rental Home Search: Nestaway's Answer To Tenant Challenges

Streamlining The Rental Home Search: Nestaway's Answer To Tenant Challenges

One app, endless possibilities-Manage bills, recharges and more with Bajaj Finserv

One app, endless possibilities-Manage bills, recharges and more with Bajaj Finserv

Microsoft Outage: From Airlines, Banks To Media Houses; Cloud Glitch Brings The World To A Grinding...

Microsoft Outage: From Airlines, Banks To Media Houses; Cloud Glitch Brings The World To A Grinding...