Rs 5-trillion cost surge on infra projects in 2 mths
In May alone, there were 458 projects that suffered on account of cost overrun, while 308 projects recorded cost escalation of less than 50%
image for illustrative purpose
Of the total 1,817 ongoing projects in May, there were 287 with both time and cost overruns. While total cost escalation was of Rs403,312.59 crore, total time overruns ranged between one month and 261 months
New Delhi: Infrastructure has been a focus area of the Narendra Modi government, but the problem of cost slippages seems to be escalating. There has been a spurt in cost overruns in infrastructure projects in two months, from Rs5.01 lakh crore in March to Rs5.71 lakh crore in May.
By the end of March, there were 1,873 projects worth Rs150 crore and more, with the original cost of Rs2,687,535.69 crore and the anticipated cost of Rs3,188,859.02 crore. This made cost escalation slightly over Rs5 lakh crore. The number of such projects was 1,817 by May-end, with the original cost of Rs2,748,567.23 crore and the anticipated cost Rs3,329,647.99 crore. That meant a cost overrun of Rs571,080.76 crore.
In May, there were 458 projects that suffered on account of cost overrun. While in 308 cases, the escalation was less than 50 per cent, in 75 it was 50-75 per cent, in 42 it was 101-200 per cent, and over 200 per cent in 33 cases, official sources told Bizz Buzz. There were 211 projects in the road transport & highway sector that have suffered cost escalation. The total cost overrun was 26.92 per cent. In terms of numbers, Railways got 137 projects with cost slippages, but the escalation was much higher, 130.32 per cent.
The coal sector had eight projects with 27.87 per cent cost overruns, petroleum 26 projects 34.68 per cent, and power 19 with 77.8 per cent escalation.
Of the total 1,817 ongoing projects in May, there were 287 with both time and cost overruns. While total cost escalation was of Rs403,312.59 crore, and total time overruns ranged between one month and 261 months.
The government has attributed six main causes of cost and time overruns: land acquisition, environmental clearances, financial issues, contractual and internal issues, manpower shortage, and court cases.
