443 infra projects in India face cost overrun of Rs 4.92 lakh cr in Feb’24

April 2, 2024: A recent report from the Ministry of Statistics and Programme Implementation (MoSPI) has brought to light significant cost overruns in infrastructure projects. According to the report, a total of 443 infrastructure projects, each requiring an investment of Rs 150 crore or more, have experienced cost overruns exceeding Rs 4.92 lakh crore as of February 2024.

Out of the 1,902 monitored projects, 443 projects have reported cost overruns, while 764 projects have encountered delays, as per MoSPI. Initially estimated at Rs 27,08,030.44 crore, the original cost of these projects is now projected to rise to Rs 32,00,507.55 crore, indicating a worrying cost overrun of Rs 4,92,477.11 crore, equivalent to 18.19% of the initial cost.

Despite the substantial financial allocation, only 52.39% of the anticipated project cost has been expended as of February 2024. The report also highlights widespread delays in project completion, with 568 projects experiencing delays based on the latest schedule. Additionally, 389 projects lack clarity regarding the commissioning year or gestation period. Among the delayed projects, 188 face delays ranging from 1 to 12 months, while 116 projects have been stalled for over 60 months. The average time overrun across the 764 delayed projects is 36.27 months.

Several factors contribute to these time and cost overruns, including delays in land acquisition, regulatory clearances, and insufficient infrastructure support. Issues such as project financing, finalisation of engineering plans, scope changes, and disruptions in the supply chain have also hampered project progress. The report underscores the impact of state-wise COVID-19 lockdowns imposed in 2020 and 2021, further exacerbating delays in project execution. Moreover, the absence of revised cost estimates and commissioning schedules from project executing agencies suggests a potential under-reporting of time and cost overruns.