Context: According to the Ministry of Statistics and Programme Implementation, as many as 346 infrastructure projects have been hit by cost overruns of more than Rs 4.46 lakh crore.
Highlight of Ministry Report
- Project Delayed: Out of 1,418 projects, 346 reported cost overruns and as many as 823 projects were delayed.
- Out of the 823 delayed projects, 172 have overall delays in the range of 1-12 months, 171 have been delayed for 13-24 months, 355 projects for 25-60 months and 125 projects have been delayed for more than 60 months.
- The average time overrun in these 823 delayed projects was 38.63 month
- Financial Implication: Total original cost of implementation of the 1,418 projects was Rs 20,38,026.75 crore and their anticipated completion cost is likely to be Rs 24,84,846.99 crore.
- It reflects overall cost overruns of Rs 4,46,820.24 crore (21.92% of original cost).
- Under-Reporting: 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.
- Reasons for Delay: 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.
- State-wise lockdowns due to COVID-19 (imposed in 2020 and 2021).