A ₹4.80 Lakh Cr Cost Overrun Affected 431 Infrastructure Projects in January
According to an official estimate, in January 2024, there were 431 infrastructure projects with a combined investment of at least Rs 150 crore that had cost overruns of more than Rs 4.80 lakh crore.
The Ministry of Statistics and Programme Implementation (MoSPI), which oversees infrastructure projects valued at at least Rs 150 crore, states that 431 of the 1,821 projects it tracks have cost overruns, while 780 have delays.
“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),” stated the ministry’s most recent report for January 2024.
Important projects are postponed
The study states that the total amount spent on these projects up to January 2024 is Rs 16,43,821.69 crore, or 53.20 percent of the projects’ estimated total cost.
It did, however, note that if delay is determined using the most recent completion timetable, the number of delayed projects drops to 583.
It further said that the year of commissioning and the estimated gestation duration were not disclosed for 373 projects.
Time Range: One Month to Three Years
Of the 780 projects that have been postponed, 194 have been postponed for a total of 1 to 12 months, 187 for 13 to 24 months, 284 for 25 to 60 months, and 115 for more than 60 months. These projects had an average time overrun of 36.13 months.
Several project implementing agencies have indicated that delays in land acquisition, gaining forest and environment clearances, and a lack of infrastructural support and connectivity are among the reasons for schedule overruns. Other causes include changes in scope, delays in project financial tie-ups, incomplete detailed engineering, difficulties with purchasing and supplying equipment, and issues with law and order.
The paper further attributed the postponement of these projects’ execution to state-level lockdowns brought on by COVID-19, which were enforced in 2020 and 2021.
Additionally, it noted that many projects’ updated cost estimates and commissioning timelines are not being provided by project executing agencies, which raises the possibility that time and cost overrun statistics are being underreported.
