Infrastructure projects in turmoil: Massive cost overruns and delays shake foundations of 411 key ventures

financialexpress.com:

As of October this year, a total of 411 infrastructure projects, each of which required an investment of Rs 150 crore or more, have encountered significant cost overruns, amounting to over Rs 4.31 lakh crore! Out of a total of 1,788 monitored projects valued at Rs 150 crore and above, 411 projects reported cost overruns, while 837 projects experienced delays. The original implementation cost was Rs 24,78,446.60 crore, with an anticipated completion cost of Rs 29,09,526.63 crore, indicating an overall cost overrun of Rs 4,31,080.03 crore.

The report highlighted that the expenditure incurred on these projects until October 2023 was Rs 15,27,102.91 crore, representing 52.49% of the anticipated cost. The number of delayed projects decreased to 628 when calculated based on the latest completion schedule.

Among the 837 delayed projects, 202 projects experienced delays of 1-12 months, 188 were delayed for 13-24 months, 324 projects faced delays of 25-60 months, and 123 projects encountered delays exceeding 60 months. The average time overrun for these 837 projects was 36.94 months.

Various project implementing agencies reported reasons for time overruns, including delays in land acquisition, obtaining clearances, lack of infrastructure support, and state-wise lockdowns due to COVID-19 in 2020 and 2021. Other factors include delays in project financing, detailed engineering, scope changes, tendering, ordering, equipment supply, and law and order issues.

The report also raises concerns about under-reporting, noting that project executing agencies often fail to provide revised cost estimates and commissioning schedules, suggesting that time/cost overrun figures may not be accurately represented.