Infrastructure projects invade by Rs 3.88 lakh crore because of delays and other factors.

According to a survey, as many as 355 infrastructure projects, each worth Rs 150 crore or more, have shown cost overruns over Rs 3.88 lakh crore due to delays and other factors. Infrastructure projects worth Rs 150 crore and above are regulated by the Ministry of Statistics and Programme Implementation. Of those 1,623 projects, 355 recorded cost overruns and an escalation for 552 times.

“The cumulative original cost of implementing the 1,623 projects was Rs 19,33,390.22 crore and their expected cost of completion is likely to be Rs 23,21,502.84 crore, representing overall cost overruns of Rs 3,88,112.62 crore (20.07% of the original cost),” said the latest July 2019 ministry report.

The report says that until July 2019 the expenditure for such projects amounted to the sum of Rs 9,47,571,45 crore, representing 40.82% of the expected project costs. Moreover, it said, the number of projects delayed decreased to 451 when we calculate based on the latest schedule of completion.

It also claimed that neither the year of commissioning nor the timely gestation period was recorded for 670 projects. Of the 552 projects that were delayed, 187 are generally delayed in the range of 1 to 12 months, 121 projects are for 13 to 24 months, 132 projects are been delayed by 25 to 60 months and 112 projects reported delays for 61 months and above. In these 552 delayed projects, the average period is 29.07 months.

Delays in the acquisition of land, forest clearing and equipment supply are the main reasons for the extended time as stated by several projects implementing agencies.

In addition, the report stated that there are other reasons such as fund constraints, geological surprises, geo-mining conditions, the slow progress of civil workers, labour shortfalls, inadequate contractor mobilization, Maoist problems, legal cases, contractual problems, and law and legislation issues.

It has also found that construction agencies do not report updated estimates of costs and commissioning dates for many projects that show that time and cost statistics are underreported.