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Monday, July 22, 2024

Infrastructure Projects in India Face Rs 4.40 Lakh Crore Setback: Report Highlights Cost Overruns and Delays

An official report has brought to light the daunting challenges faced by 421 infrastructure projects in India, each requiring an investment of Rs 150 crore or more, with an alarming cost overrun exceeding Rs 4.40 lakh crore as of November 2023. The Ministry of Statistics and Programme Implementation oversees these projects, and the latest data underscores the magnitude of the issue.

Project Overview and Cost Overruns

Among the total of 1,831 projects, 421 encountered cost overruns, while 845 projects experienced delays. The initial implementation cost stood at Rs 25,10,577.59 crore, with a projected completion cost of Rs 29,50,997.33 crore, indicating a significant 17.54% overall cost overrun.

Expenditure and Project Delays

The report reveals that until November 2023, the expenditure incurred on these projects reached Rs 15,58,038.07 crore, constituting 52.80% of the expected cost. When considering the most recent completion schedule, the number of delayed projects reduces to 629.

Breakdown of Delayed Projects

Among the 845 delayed infrastructure projects, 204 are delayed by 1-12 months, 198 face delays of 13-24 months, 322 projects experience delays of 25-60 months, and 121 projects have been delayed for over 60 months. The average time overrun for these projects is a substantial 36.64 months.

Causes of Time Overruns

Various project implementing agencies attribute time overruns to multiple factors, including delays in land acquisition, obtaining clearances, insufficient infrastructure support, and linkages. Additional contributing factors encompass delays in project financing, finalization of detailed engineering, scope changes, tendering, ordering and supply of equipment, law and order issues, and the repercussions of state-wise COVID-19 lockdowns in 2020 and 2021.

Reporting Discrepancies

The report highlights that project executing agencies frequently neglect to report revised cost estimates and commissioning schedules for many projects. This implies that the reported time and cost overrun figures might be underestimated, indicating a potential disparity in the data.

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