"448 Infrastructure Projects Face Cost Overruns Totaling ₹5.55 Lakh Crore in Q3, Government Reports"

An official report has revealed that 448 major infrastructure projects in India, each with an investment of ₹150 crore or more, encountered cost overruns totaling over ₹5.55 lakh crore during the third quarter of the fiscal year 2023-24. The data is part of the Quarterly Project Implementation Status Report (QPISR) on Central Sector Projects, released by the Ministry of Statistics and Programme Implementation.

The QPISR contains details on 1,897 projects costing ₹150 crore and above. Of these, 448 projects have a cost overrun of ₹5,55,352.41 crore, which accounts for 65.2 percent of their sanctioned cost. However, when compared to the latest approved cost, 292 projects reported a cost overrun of ₹2,89,699.46 crore.

Additionally, 276 projects were found to have both time and cost overruns. The report indicated that 56 projects were ahead of schedule, 632 were on schedule, and 902 were delayed with respect to their original completion timelines. In some cases, either the original or anticipated completion date was not reported or had lapsed, affecting 307 projects.

The report also noted that the anticipated completion cost for these 1,897 projects is estimated at ₹31,74,489.91 crore. As of December 31, 2023, the total expenditure on these projects was ₹16,89,400.92 crore, representing 53.22 percent of the anticipated completion cost and 63.9 percent of the original cost. The total outlay allocated for these projects in 2023-24 is ₹3,70,983.54 crore.

The percentage of delayed projects decreased from 56.70 percent in the quarter ending December 2022 to 47.55 percent in the third quarter of FY24. The percentage of cost overruns dropped from 21.42 percent to 20.1 percent.

Key reasons for time overrun, as reported by various project implementing agencies, include delays in land acquisition, obtaining forest and environment clearances, and law and order issues. The report also pointed to state-wise lockdowns due to Covid-19 in 2020 and 2021 as contributing factors in the delay of project implementation.

While the cost overruns due to general price escalation could not be entirely avoided, the report suggested that cost escalation due to delays could be minimized through improved project management and oversight.

HBL