50% of UPA initiated infra projects delayed, cost shoots by Rs 95,000 crore

Nearly 50% of the major infrastructure projects costing Rs 150 crore and above initiated by the UPA government during its nearly one decade rein are running behind schedule resulting in overall cost overruns of whooping Rs 95,000 crore.

According to information obtained from Ministry of Statistics and Programme Implementation (MoSPI) as on May 2013, out of 431 central sector infrastructure projects kicked off during UPA rule, 213 are delayed for various reasons. The figures could be much higher according to a report by the ministry released in May 2013. “It has been 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.” the MoSPI report states.

Experts say that many of these projects are crucial for overall development of the economy resulting in raise in standard of living of people. “Such delay reflects poor performance of the government and directly impact lives of millions by depriving them of services that the projects could have offered if implemented on time,” said consultancy firm Deloitte's senior director Amrit Pandurangi, a well-known expert in infrastructure sector.

Other reasons highlighted in the ministry report include delay in land acquisition, supply of equipment, legal issues, municipal permission and geological surprises.

Of the 16 key infrastructure sectors, most of the projects delayed are in railways and power. The Bangalore Metro rail project, which was approved in 2006, is one of the key infrastructure projects with huge cost overruns to the tune of Rs 5,214 crore. The list of delayed projects includes Mumbai Urban Transport Project Phase–II and construction of Haridwar-Dehradun national highways.

The parliamentary Standing Committee on Finance has repeatedly raised concern over the massive cost overruns in its report. The Committee in its April 2013 report cited huge cost and delay for more than 10 years in many cases and recommended constitution of a high-powered committee to resolve the issue. A Standing Committee has been set up in each Ministry to fix responsibility for cost and time overruns, where cost overruns are over 20% and are accompanied by time overruns of over 10%.

The MoSPI monitors the implementation of central sector projects costing more than Rs 150 crore in 16 sectors. The ministry acts as an independent agency monitoring time and cost overruns in the implementation of projects and flag the lapses for corrective action.

Overall reportOf the total 569 projects in the country, 277 projects are delayed. One such projects is the Jammu-Udhampur-Srinagar-Baramulla Railway Link which is running behind schedule by over 16 years. Nearly 58 projects running behind schedule by over five years.

Total original cost of implementation of these 569 projects was about Rs 7.9 lakh crore at the time of approval, but because of the delay the anticipated cost has shot up to Rs 9.4 lakh which means extra burden of about Rs 1,40,000 crore on government exchequer.

Sector-wise delays:

State-wise delays:

(Source: MoSPI report)