Surge in time, cost overruns hit infra projects
September sees unprecedented rise, prompting concerns and calls for effective oversight
Infra in slow lane
- Out of 1,844 projects, 911 delayed in comparison to their original schedule
- In Q2 FY24, 436 projects had cost overruns of `5.75 lakh cr
- Which was 68.97% of their sanctioned cost
- As many as 276 projects had both time and cost overruns
New Delhi: Time and cost overruns of infrastructure projects show no sign of steady decline, as both recently saw a surge. While a quarterly analysis showed a rise in the number of projects worth Rs 150 crore and more in the last one year, September also saw a spurt in the percentage of anticipated costs with respect to the originally approved costs.
The percentage of delayed projects rose from 44.5 per cent in the quarter ending September 2022 to 61.22 per cent in the quarter ending September 2023, official sources told Bizz Buzz. In the July-September quarter this fiscal, out of 1,844 projects, 74 projects were ahead of schedule, 580 projects on schedule, and 911 projects were delayed with respect to the original schedule of completion. Further, there are hundreds of projects whose original or the anticipated date of completion was not reported, or it has lapsed.
Out of 1,844 projects, in Q2 2023-24, 436 projects had cost overruns of Rs 507,557.37 crore which was 68.97 per cent of their sanctioned cost. As many as 276 projects had both time and cost overruns
Worse, there was a sudden upward trend in cost overruns of infrastructure projects in September. Since March this year, cost overruns as a percentage of the original cost had been steadily coming down, from 22.02 per cent in March to 19.86 per cent in May, 19.48 per cent in June, 19.46 per cent in July, and 19.08 per cent in August. In September, however, the graph turned northwards, to 19.22 per cent.
While cost overruns due to general price escalation could not be avoided, the cost escalation on account of delays could be minimised, the sources said. The mechanism of Standing Committees (under chairmanship of Additional Secretary of concerned Ministry) in each Union Ministry to review the time and cost overruns in projects and to fix the responsibility thereof has to be made more effective and realistic, they added.
