Cost of delayed infra projects shoots up by R1 lakh crore

Nearly a third of all large infrastructure projects in the country are delayed.

Written by Surabhi | New Delhi | Published: July 30, 2014 1:06 am

A third of all large infrastructure projects in the country are delayed resulting in cost overruns of nearly Rs 1 lakh crore.

The data, which was tabled in the Lok Sabha, reveals that of the 727 large projects costing over Rs 150 crore and monitored by the ministry of statistics and programme implementation, 282 projects were delayed as on May 1, 2014, and are estimated to cost at least an additional Rs 98,992 crore.

Of these, two in three projects in the petroleum sector were delayed, while nearly half the projects in power as well as highways were running behind schedule. The data is even starker in the sector of atomic energy where all four projects being monitored are delayed from anywhere between 3 months (Rajasthan Atomic Power Project 7 and 8) to as much as 75 months in the case of Kudankulam in Tamil Nadu.

“The main reasons for delay in implementation are law and order problems, delay in land acquisition, rehabilitation and resettlement problems, fund constraints, delay in forest and environmental clearances, right of way and right of use issues, delay in supply of material, contractual issues, etc,” Rao Inderjit Singh, minister of state for statistics and programme implementation, informed the Lok Sabha last week.

However, the project facing the longest delay is the Udhampur-Srinagar-Baramulla railway line that is running behind schedule by over 15 years and has registered a cost overrun of 700 per cent to Rs 20,000 crore from the original cost of Rs 2,500 crore. Similarly, Arunachal Pradesh’s Kameng Hydroelectric project would cost Rs 4,653.95 crore against original cost of Rs 2,496.90 crore with time overrun of 87 months while the Subansiri lower hydro project would cost Rs 10,667 crore against the original cost of Rs 6,285.33 crore with time overrun of 96 months.

More worryingly, though just about three dozen of the 283 projects in the railways sector are delayed, the government has no data on either the date of commissioning or completion for a majority of rail projects.

The data is significant given that Prime Minister Narendra Modi met with secretaries of infrastructure ministries to review sectoral targets and speed up such projects. Faster project implementation is expected to bring in larger investments in the economy and help revive it from a sub-five per cent growth trajectory.

Amongst states, Assam had the highest number of delayed projects with 28 of its 34 projects facing time overruns, followed by Maharashtra where 22 of 51 projects were delayed.

Surprisingly, both Gujarat and West Bengal had almost equal number of projects facing time over runs. While 13 of the 33 projects being monitored in Gujarat were delayed, 10 of the 37 such projects in West Bengal were also facing time overruns.

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