Cost overruns in as many as 273 infrastructure projects due to various reasons such as land acquisition, forest clearances, lack of supply of equipment etc. is estimated to be at Rs 1.77 lakh crore.
These findings were observed by the Ministry of Statistics and Programme Implementation in August 2016 and included 1,167 infrastructure projects across different sectors such as power, railways and roads. Each project was worth Rs 150 crore or more. Out of the 1,167 infrastructure projects, only 282 are on schedule.
In its flash report, the ministry noted that 337 projects are delayed, 273 projects reported cost overrun and 85 projects reported both time and cost overrun with respect to their original project implementation schedules. Out of the 337 delayed projects, 68 projects have an overall delay in the range of 1 to 12 months, 54 projects have are delayed in the range of 13 to 24 months, 138 projects are delayed in the range of 25 to 60 months and 77 projects are delayed by 61 months and above.
"Total original cost of implementation of the 1,167 projects was Rs 14,33,476.53 crore and their anticipated completion cost is likely to be Rs 16,10,504.54 crore, which reflects overall cost overrun of Rs 1,77,028.01 crore (12.35 per cent of the original cost)," it said.
Apart from land acquisition and forest clearances, other reasons associated with cost overruns includes fund constraints, geological surprises, problems in equipment erection, geo-mining conditions, slow progress in civil works, shortage of labour, inadequate mobilisation by contractor, Maoist problems, court cases, contractual issues, ROU/ROW problems, law and order situation etc.
Comparing reports of April 2016 and August 2016, the number of projects reporting cost overruns has increased to 23.39 percent from 22.71 percent whereas projects reporting time overruns have decreased to 28.88 percent from 30.73 percent.
From a set of 1,061 projects monitored in the April 2016 report, 241 projects reported cost overruns and 326 projects reported time overruns, but during August 2016, out of 1,167 projects, 273 projects reported cost overruns and 337 projects reported time overruns.
A similar set of reports released earlier this month suggested that conflicts around land acquisition threaten over Rs. 12 trillion (US$179 billion) worth of investments in India. It found that 5,780 (14%) of the more than 40,000 projects announced between January 2000 and October 2016 were stalled due to land acquisition conflicts.