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Most infrastructure projects in India running way behind deadline

Project delays and escalated costs drag infra projects

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If the Narendra Modi-led NDA government truly wants to focus on developing the nation's infrastructure, then it has plenty of opportunities to prove its intent without even starting on a single new project. That's because it faces the task of clearing a backlog of a whopping 218 projects that have been delayed. Not only have these projects been delayed, but the cost of 238 infrastructure projects has gone through the roof, escalating 77.3 per cent over the original estimate.

Out of the total 721 projects monitored by the Ministry of Statistics Planning and Implementation (MoSPI) as on March 2014, only 136 are on schedule, 218 are delayed while there is inadequate information on the commissioning schedule of 364 projects. At least 99 mega projects, i.e. projects costing more than Rs 1,000 crore, figure in the list of delayed projects.

What's worse than the delayed projects is the cost overrun, which is more than the annual revenue of many African and Latin American nations in some cases. Of the total 721 projects, 238 projects across different sectors show a cost overrun of around Rs 1.94 lakh crore in the last three decades. The original cost of these 238 projects was pegged at Rs 2,51,198.1 crore, while the anticipated cost has now shot up to Rs 4,45,267crore. The difference of Rs 1,94,069 crore is a whooping 77.3 per cent.

Of the 721 projects, at least five projects were approved in the 1980s and 57 were approved in 1990s. The oldest project that has been delayed for nearly 40 years is that of a railway line in West Bengal. The Howrah-Amta-Champadagana project was approved in 1974 at an estimate of Rs 31.42 crore. Circa 2014, the same project is estimated to cost 1600 per cent more — Rs 535 core.

Another rail project that has been significantly delayed is the much-publicised Udhampur-Srinagar-Baramullah Railway line in Jammu and Kashmir. Approved in 1995, it was orginally estimated to cost Rs 2,500 crore. But nearly a 15-year delay in the project's commissioning has pushed up its estimated cost by Rs 17,500 crore to Rs 20,000 crore now. Likewise, the controversial Kudankulam atomic energy project in Tamil Nadu, has witnessed a cost overrun of Rs 4,099 crore since it was approved in 2001.

According to the ministry, infrastructure projects are delayed due to lack of infrastructure support and linkages, delay in land acquisition and in obtaining forest or environment clearances, delay in tie-up of project financing, law and order problems, delay in tendering, ordering and equipment supply, pre-commissioning teething troubles and geological surprises.

The time delay is the biggest factor in cost overruns. The other factors that lead to cost escalation are under-estimation of original cost, monopolistic pricing by vendors of equipment services, disturbed conditions, high cost of environmental safeguards and rehabilitation measures and spiraling land acquisition costs.

The ministry has recommended setting up of a Cabinet Committee on Investment (CCI) to review and monitor the implementation of major projects. Besides, the ministry has also suggested the setting up of Central Sector Projects Coordination Committees (CSPCCs) in the states under chief secretaries to eliminate bottlenecks and to facilitate the speedy implementation of major projects.

GRAPHIC TEXT
Of the 721 projects being monitored, 218 are delayed.

ORIGINAL COST NEW ESTIMATED COST
Rs 2.51 lakh crore Rs 4.45 lakh crore

SECTORS
Petroleum: 51
Power: 46
Railways: 35
Coal: 30
Steel: 10

COST OVERRUN OF MAJOR PROJECTS:
Udhampur-Srinagar-Baramullah Railway (1995)
Rs 17,500 crore

Jiribum-Imphal Railway (2003)
Rs 5,268 crore

Bangalore Metro (2006)
Rs 5,214 crore

Subansri Lower (NHPC) (2003):
Rs 4,381 crore

TIME DELAY OF MAJOR PROJECTS
Freight Operations Information System (Railways): 1984
Guna-Etawah-Gwalior (Railways): 1986

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