The initial estimated cost for these 1,646 projects was Rs 23,92,837.89 crore, but their expected completion costs are now expected to reach Rs 28,58,394.39 crore.
An official report stated that as of July 2023, a total of 388 infrastructure projects, each with investments exceeding Rs 150 crore, experienced cost overruns totaling more than Rs 4.65 crore.
The report is responsible for monitoring projects with a budget of Rs 150 crore or more and is issued by the Ministry of Statistics and Program Implementation. It reveals that out of a set of 1,646 projects, 388 suffered cost overruns, while 809 projects suffered delays.
Estimated cost of completion
The initial estimated cost for these 1,646 infrastructure projects was Rs 23,92,837.89 crore, but the expected completion costs are now projected to reach Rs 28,58,394.39 crore. This translates to an overall cost overrun of Rs 4,65,556.50 crore, equivalent to 19.46% of the original estimate, as detailed in the latest ministry report of July 2023.
Till July, a total expenditure of Rs 15,21,550.38 crore had been incurred on these projects, which is 53.23% of the forecast costs. However, the report indicates that the number of delayed projects dropped to 602 when delays were assessed against the most recent completion schedules.
In addition, the report highlights that for 345 projects, the start-up year or the tentative gestation period have not been reported. Among the 809 delayed projects, 177 have experienced delays ranging from 1 to 12 months, 192 have been delayed between 13 and 24 months, 318 projects have experienced delays of 25 to 60 months, and 122 projects have experienced delays of more than 60 months. The average delay in these 809 projects amounts to 37.44 months.
Why the delay?
The project's implementing agencies have cited various reasons for these delays, including setbacks related to land acquisition, the process of obtaining environmental and forest clearances, and the lack of necessary infrastructure connections and support. Other contributing factors include difficulties in securing project financing, completion of detailed engineering plans, scope alterations, delays in bidding, ordering and supply of equipment, as well as public order issues.
Additionally, the report identifies state lockdowns due to COVID-19, imposed in 2020 and 2021, as an additional factor affecting project implementation schedules. In addition, he notes that project implementing agencies often do not report revised cost estimates and start-up schedules for many projects, which means that figures related to cost overruns and timelines may be underestimates.
