How project delays costing India dearly

It rains multi-crore project announcements during the elections. As we have been discussing, India has been on a perennial election mode. And for the BJP, every meet or public rally is a campaign rally because for it winning an election is of topmost priority. Fair enough. It is part of democracy. While listening to the rain of projects in various parts of the country, one question struck my mind – how many of these projects actually see the light of the day.

The Ministry of Statistics and Programme Implementation monitors projects costing over Rs 150 crore. And its data for September 2022 shows as many 1520 projects will have cost overruns from the estimated 21,25,851.67 crore to completion cost of Rs 25,78,197.18 crore or a 21.28 per cent cost escalation.

The expenditure incurred on these projects till September 2022 is 13,78,142.29 crore, which is 53.45 per cent of the anticipated cost of the projects.

Out of the 1529 projects, only 8 projects are ahead of schedule, 256 are on schedule, 662 are delayed, 384 projects reported cost overrun and 216 projects reported both time and cost overrun with respect to their original project implementation schedules.

The reasons for time overruns as reported by various project implementing agencies vary from delay in land acquisition to delays in obtaining forest/environment clearances, finalization of detailed engineering, change in scope tendering to Covid-triggered lockdown.

The most industrialised State of Maharashtra presents a striking picture of project delays even as Prime Minister Narendra Modi has announced Rs two lakh crore worth infra projects for Maharashtra, as many as 60 projects valued at over Rs 64,000 crore, including the Belapur-Uran rail link, have overrun their timelines by years.

Modi only said Rs 75,000 crore worth railway projects and Rs 50,000 -crore worth road projects have been approved for the State and some of these are already in progress while few others would start soon.

The longest pending project listed by the Ministry of Statistics and Programme Implementation (MOSPI) under Time Overrun Projects for Maharashtra is the Rs 495 crore Belapur-Seawoods-Uran Electrified Double Line which has been delayed by 228 months or 19 years. The project, sanctioned in March 1996, was to be ready by March 2004 and the revised date of completion is March next year.

An analysis of the MoSPI list shows that the Pune-Satara part of NH4 and conversion of rig Sagar Samrat to mobile offshore platform have been delayed by 115 months - nearly nine-and-a-half years.

The Bhatadi mines expansion in the Western Coalfields is delayed by 90 months.

Some key railway projects that have overrun their timelines include the Kalyan-Kasara third line (48 months), Mumbai Metro 3 (45 monhs) and Pune Metro Phase 1 (16 months). Costwise, the Mumbai Metro 3 tops the list with Rs 23,136 crore at stake, followed by Pune Metro that is estimated to cost Rs 11,420 crore.

It is a matter of concern that these delays and holding up of projects that not only cost money but jobs such works involve only contract jobs. So, the announcements over job creation could just amount to misleading the people or a just a pre-election gimmick.

Moreover, at least four of the projects have been kicked off during the UPA regime. The Prime Minister should focus on timely implementation of the projects promised and initiated. Government spending is good and in fact most welcome, but it has to be continuous and sustained and above all ensure completion of projects on hand. Announcing new grandeur projects with much fanfare isn't just good enough.

While the programme implementation committee monitors, it is equally important for the government and its various departments to strive to clear the bottlenecks and ensure that the all the projects announced are completed - whether it is by the UPA or the NDA - since they benefit the country.

Our worry is that the lakhs of crores worth projects should not remain on paper or be limited to statistics. States need to move beyond statistics into the helm of reality.

One major criticism that the Modi government has been facing is that the employment situation has not improved. Jobs and income lead to spending and spending is good for the consumption-driven economy. You don't need a big economist to tell you this. Unfortunately, all the promises that the current rulers make are with a carrot that is 25 years away - the Amrut-Kal.

The Amrut Kal should result in the rapid execution of the pending projects. In fact, priority should be for those projects rather than making promises that may make Robert Frost turn in his grave.

As we discussed last week, the much-hyped startup boom could also prove to be a bubble since it is tough to ensure that the outfits sustain their businesses and growth. The number of much publicised unicorns created during the current regime has come down to 84 from 105. Unicorn is a startup with a billion-dollar valuation.

The PM said Mudra scheme is giving collateral free loans to the youth and 20 lakh-crore worth of loans have already been disbursed. Similarly, startups and the MSME sector are being supported in a big way. Youngsters in Maharashtra have benefited from this, he said.

All these figures look nice on paper but one has to see as to how many of these projects would not turn NPAs. This could mean a plethora of NCLT cases, banks taking haircuts and ultimately job losses. The very thought of this scenario is mindboggling. It is the responsibility of the government, the opposition and the media to ensure that frustration does not set in.

(The columnist is a Mumbai-based media veteran now running websites and Youtube channel known for his thought-provoking messaging)