Over Rs 3.39-trn cost overruns in 362 infra projects due to delays: Report

As many as 362 infrastructure projects, each worth Rs 1.5 billion or above, have shown cost overruns to the tune of over Rs 3.39 trillion owing to delays and other reasons, a report said.
The Ministry of Statistics and Programme Implementation monitors infrastructure projects worth Rs 1.5 billion and above.

"Total original cost of implementation of the 1,417 projects was Rs 17.3809586 trillion and their anticipated completion cost is likely to be Rs 20.7789881 trillion, which reflects overall cost overruns of Rs 3.3980295 trillion (19.55% of original cost)," the ministry's latest report for August 2018 said.
Of these 1,417 projects, 362 reported cost overruns and 317-times escalation.
According to the report, the expenditure incurred on these projects till August 2018 is Rs 7.7635156 trillion, which is 37.36 per cent of the anticipated cost of the projects.
However, it said the number of delayed projects decreases to 249 if delay is calculated on the basis of latest schedule of completion.
For 694 projects, neither the year of commissioning nor the tentative gestation period has been reported. Out of 317 delayed projects, 86 projects have overall delay in the range of 1-12 months, 55 projects have 13-24 months, 87 projects reflect delay of 25-60 months and 89 projects show 61 months and above delay.
It also said that the average time overrun in these 317 delayed projects is 46.72 months.
The brief reasons for time overruns as reported by various project implementing agencies are delay in land acquisition, forest clearance and supply of equipment.
Besides, there are other reasons like fund constraints, geological surprises, geo-mining conditions, slow progress in civil works, shortage of labour, inadequate mobilisation by the contractor, Maoist problems, court cases, contractual issues, ROU/ROW (right of use/right of way) problems, law and order situation, among others.
It also observed that project agencies are not reporting revised cost estimates and commissioning schedules for many projects, which suggests that time/cost overrun figures are under-reported. 

Maoists, fund crunch cause Rs 3.39 trn cost overrun in 357 infra projects

As many as 357 infrastructure projects, each worth Rs 150 crore or above, have shown cost overruns to the tune of over Rs 3.39 trillion owing to delays and other reasons, a report said.
The Ministry of Statistics and Programme Implementation monitors infrastructure projects worth Rs 1.50 billion and above.

"Total original cost of implementation of the 1,362 projects was Rs 17.03 trillion and their anticipated completion cost is likely to be Rs 20.43 trillion, which reflects overall cost overruns of 3.39 trillion (19.91 per cent of original cost)," the ministry's latest report for June 2018 said.
Of these 1,362 projects, 357 reported cost overruns and 272-time escalation.
According to the report, the expenditure incurred on these projects till June 2018 is 7.8 trillion, which is 38.51 per cent of the anticipated cost.
However, it said the number of delayed projects decreases to 198, if delay is calculated on the basis of latest schedule of completion.
For 667 projects, neither the year of commissioning nor the tentative gestation period has been reported. Out of 272 delayed projects, 65 projects show delay in the range of 1 to 12 months, 53 projects have 13 to 24 months delay, 74 projects reflect delay of 25 to 60 months and 80 projects show 61 months and above delay.
The brief reasons for time overruns as reported by various project implementing agencies are delay in land acquisition, forest clearance, supply of equipment.
Besides, there are other reasons like fund constraints, geological surprises, problems in equipment erection, geo-mining conditions, slow progress in civil works, shortage of labour, inadequate mobilisation by the contractor, maoist problems, court cases, contractual issues, ROU/ROW (right of use/right of way) problems, law and order situation etc.
It also observed that project agencies are not reporting revised cost estimates and commissioning schedules for many projects, which suggests that time/cost overrun figures are under-reported.

Economic Survey 2018: India needs $4.5 trillion by 2040 to develop infra

India will need about $4.5 trillion in the next 25 years for infrastructure development, of which it will be able to garner about $3.9 trillion, the Economic Survey said.
"The Global Infrastructure Outlook reflects that rising income levels and economic prosperity is likely to further drive demand for infrastructure investment in India over the next 25 years.
"Around $4.5 trillion worth of investments are required by India till 2040 to develop infrastructure to improve economic growth and community well being," the Survey tabled by Finance Minister Arun Jaitley in Parliament today said.
It said the current trend shows that India can meet around $3.9 trillion infrastructure investment out of $4.5 trillion.
"The cumulative figure for India's infrastructure investment gap would be around $526 billion by 2040," it said ... The Global infrastructure outlook shows that the gap between required infrastructure investment and current trend of investment is expected to be widened over the year," it said.
The Survey stressed the need to fill the infrastructure investment gap by financing from private investment, institutions dedicated for infrastructure financing like National Infrastructure Investment Bank (NIIB) and also global institutions like Asian Infrastructure Investment Bank (AIIB) and New Development Bank (erstwhile BRICS Bank).
Stating that there was massive underinvestment in the sector, it attributed the causes behind this to "collapse of Public Private Partnership (PPP) especially in power and telecom projects; stressed balance sheet of private companies; issues related to land & forest clearances."
Terming road transport as a dominant mode of transport in India which contributes significantly to the national economy, the Survey said measures to boost it resulted augmenting of the road length to 57.17 million km from 33.73 million km in 2001 while the vehicles grew by four times to 229 million during the period.
Also, it emphasised that Indias road density at 1.66 km/sq km of area is higher than that of Japan, USA, China, Brazil and Russian Federation while surface road length was 61 per cent of the total road lento, much lower than the UK, Korea, Russia and China.
It also highlighted that as on September 2017, out of the 1,263 total ongoing monitored projects across sectors, there are 482 projects in Road Transport and Highways with a cost of Rs 3.17 trillion. Of these, 43 projects face cost overruns and 74 projects time overruns.
About railways sector, the Survey said that it is facing stiff competition from other modes of transportation and the government is initiating various transformative measures to keep railways on track.
About metro rail, it said there are 425 km of metro rail systems operational in the cities of Delhi, NOIDA, Gurugram, Kolkata, Mumbai, Chennai, Bengaluru, Hyderabad, Jaipur, Lucknow and Kochi and another about 684 km are under construction in various cities by December 2017.
About civil aviation, it said, "Provision of Rs 45 billion for revival of 50 unserved and underserved airports/air strips has been taken up with budgetary support of government to be completed by December 2018."
On shipping, the Survey said, "In 2017-18, projects with an investment of around Rs 100 billion and capacity addition of about 80 MMTPA are targeted for award. Of these, 15 projects involving an investment of around Rs 31.59 billion and capacity addition of 18 MTPA have already been awarded."
Listing Bharatmala and Sagarmala as important initiatives for highways and shipping sectors respectively, the Survey said under Sagarmala ports master plans have been finalised under which 131 port capacity expansion projects with project cost of Rs 853.46 billion have been identified for implementation over next 20 years.
The Survey said all-India installed power generation capacity has increased substantially over the years and reached 330860.6 MW as on November 30, 2017.
About logistics sector, the Survey highlighted that "the Indian logistics market is expected to reach about $215 billion in 2020, growing at a CAGR of 10.5 per cent".
For the telecom sector, it said under phase II of Bharat Net to connect 1.5 lakh gram panchayats with high speed broadband is likely to be completed by March 2019.