Delay in land acquisition, environment clearances leads to cost overruns of Rs 4.58 lakh crore for 380 infra projects

NEW DELHI: As many as 380 infrastructure projects, each entailing an investment of Rs 150 crore or more, have been hit by cost overruns of more than Rs 4.58 lakh crore, as per a report. According to the Ministry of Statistics and Programme Implementation, which monitors infrastructure projects of Rs 150 crore and above, out of 1,521 projects, 380 reported cost overruns and as many as 642 projects were delayed.

"Total original cost of implementation of the 1521 projects was Rs 21,18,597.26 crore and their anticipated completion cost is likely to be Rs 25,76,797.62 crore, which reflects overall cost overruns of Rs 4,58,200.36 crore (21.63% of original cost)," the ministry's latest report for October 2022 said.

According to the report, the expenditure incurred on these projects till October 2022 was Rs 13,90,065.75 crore, or 53.95 per cent of the anticipated cost of the projects.

However, the number of delayed projects decreases to 513 if delay is calculated on the basis of latest schedule of completion.

Further, it showed that for 620 projects, neither the year of commissioning nor the tentative gestation period has been reported.

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Out of the 642 delayed projects, 136 have overall delays in the range of 1-12 months, 120 have been delayed for 13-24 months, 260 projects for 25-60 months and 126 projects have been delayed for 61 months and above. The average time overrun in these 642 delayed projects is 42 months.

Reasons for time overruns as reported by various project implementing agencies include delay in land acquisition, delay in obtaining forest and environment clearances, and lack of infrastructure support and linkages.

Delay 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 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.