Delay in infra projects lead to loss of over Rs 1.6 lakh crore for the government

Government has suffered loss of Rs 1,60,737.57 crore (12.69 percent of original cost) from their original estimates in project cost due to cost overruns in as many as 238 infrastructure projects monitored by the Statistics Ministry.

As per the report of Statistics Ministry, the reasons for time overruns as reported by various project implementing agencies are delay in land acquisition, delay in forest clearance and delay in supply of equipment. The other such reasons are fund constraints, geological surprises, problems in equipment erection, geo-mining conditions, slow progress in civil works, shortage of labour, inadequate mobilisation by the contractor, Maoist problems, court cases, contractual issues etc.

The Statistics Ministry is monitoring 1,071 infrastructure projects worth Rs 150 crore or above each in various sectors such as power, railways and road. The report further highlighted that, during February 2016 out of 1071 projects, 238 projects reported cost overruns and 341 projects reported time delays. Furthermore, expenditure incurred on these projects till February 2016 was Rs 5, 66,058.05 crore, which is 39.67 percent of the anticipated cost of the projects.

The data further showed that in April 2015, out of 758 projects on the monitor of Statistics Ministry, 231 projects reported cost overruns and 323 projects reported time overruns total, it further stated that the original cost of implementation of 1,071 projects was Rs 12,66,248.36 crore and their anticipated completion cost is likely to be Rs 14,26,985.93 crore, which reflects overall cost overruns of Rs 1,60,737.57 crore.