Central Infrastructure Projects Face Rs 5.6 Lakh Crore Overrun And Delays

According to official data issued on Tuesday (28 May), the percentage of cost overruns in central government projects increased to a 12-month high of 20.09 percent in April from 18.65 percent in the previous month.

A total of Rs 33.2 lakh crore was the estimated cost of 1,838 projects, each valued at at least Rs 150 crore. This sum exceeded the initial cost estimate by Rs 5.6 lakh crore. In addition, compared to the preceding months, the percentage of delayed projects rose.

Of these projects, 514 projects saw a delay in their original cost, and 43% of them (792 projects) experienced a delay in their intended completion date. According to official figures, 29 new projects were started in April compared to the 61 finished ones.

The newly added projects were anticipated to cost Rs 1.3 lakh crore, while the finished projects in April came with a cost of Rs 46,649.7 crore.

International organisations have identified the government’s emphasis on infrastructure development as a major growth driver, and this trend is predicted to continue in the upcoming year.

According to the research, the GDP expanded by 7.8% in FY24 and is expected to expand by 6.8% in the current fiscal year.

The average time to complete a project dropped from 36.04 months in March to 35.4 months in April, despite an increase in cost overruns. Nevertheless, 48% of the projects saw delays exceeding a two-year duration.

According to the government study, out of 1,838 projects, 54 of them had time overruns exceeding 50 months and cost overruns surpassing 50%. Of these projects, 54 percent contributed to the total cost overrun and 21 percent to the total time overrun.

Out of all the major industries, the railways had the highest rate of cost overruns in April (126.5%), with over half of its projects that the government had reported having cost overruns. The cost overrun ratio for the road transport and highways sector, which makes up almost 60% of the projects, was 23.7%.

Furthermore, government data indicates that time overruns occurred in over 10% of road construction and one-third of railway projects.

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