Delays and value overruns in central infrastructure projects costing ₹150 crores and above have risen sharply over the last year, government data showed. Economists attributed the delays to covid-19 disruption and labor shortage, and price overruns to inflation. This comes amid attempts by the govt. to boost efficiencies and reduce the compliance burden in infrastructure projects through its flagship Gati Shakti program. Nearly 41% of all monitored projects are running with a postponement as of April, as against just 30% within the same month last year, data compiled by the ministry of statistics and program implementation showed. Overall cost overruns for projects increased to 23% from 19.6% last year.
Quite half the projects in railways, petroleum, power, and civil aviation are running with a time delay. The share of railway projects facing delays has increased from 47.4% in April 2021 to 60% in April 2022. The proportion of road, transport, and highways facing time overruns from its original schedule increased to 29.1% in April 2022 from 13% in April 2021. Within the case of civil aviation, 21 of the 24 projects face time delays. Nearly 27.4% of the overall central infrastructure projects as of April 2022 were facing cost overruns. Nearly 1/2 the delayed projects are running late by 2-5 years, while 22% are delayed by over five years, the information showed.
“The Covid-19 outage, and hence labour unavailability during the last two years, may also be to blame for the rise in time delays and cost overruns.” Madan Sabnavis, chief economist, of Bank of Baroda said the time overruns may well be because of delays within the release of funds by the govt. as these are central government projects. “This was thanks to the continual rebalancing of money flows during the year with priorities changing,” said Sabnavis. Second, contractors working on projects encountered issues with workers who had returned to their houses in 2020. “This could have added to time delays. Lastly, with an uneven performance of varied industries with problems being seen in coal, power, metals (due to prices), there would are a bent to travel slowly on these projects,” said Sabnavis.
As of April, 647 of the entire 1,559 central government projects costing ₹150 crores and above were delayed viz a viz their original schedules and 107 reported additional delays compared to their completion date within the previous month. Of those 107 projects, 29 are mega projects costing ₹1,000 crore and above. The total original cost of implementation of those 1,559 projects was ₹21.73 trillion, while their anticipated completion cost is probably going to be ₹26.72 trillion, reflecting an overall cost of ₹4.98 trillion, which is 23% of the first cost.
Follow and connect with us on Facebook, LinkedIn & Twitter
