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Cost overruns rise to six-month high in September, according to MoSPI data


Reversing the gains made in the last few months, cost overruns rose to a six-month high in September, according to data released by the government.

The estimated cost of central infrastructure projects was 21.92% higher in September than the original cost, compared with 19.08% witnessed in August. The government will need to shell out an extra Rs 4.5 lakh crore on projects which value Rs 150 crore and above, taking the total spending to Rs 24.8 lakh crore.

The time of completion also jumped compared with the previous month to 38.63 months from 36.96 months projected earlier.

Although the number of delayed projects declined to 823 in September from 830 in August, 58% are now delayed for over two years.

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The government’s monitoring portal considered 1,418 projects in September, of which 12 were added from the previous month. The government completed 46 projects in September.The report notes that 268 projects were on schedule, whereas 242 faced cost and time overruns.However, it highlights that this may not present the actual picture on the ground, as not all agencies may be reporting or providing list of milestones.

“The concerned administrative Ministry may like to review the projects in order to avoid further cost overrun, time overruns, to firm up milestones in case of milestone is not available, to firm up revised cost estimates and revised commissioning schedule if the same has been not revised and lapsed,” the report stated.

Railways was one of the ministries facing the highest cost overruns, with expected costs 68.1% higher than the original cost in 173 projects. The 41 projects of the water resources ministry faced 195.6% cost overruns, whereas roads, which accounted for nearly half of the total projects monitored under the system, had 4.3% cost overruns.

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Among states, northeastern states had the highest cost overruns, followed by Andhra Pradesh.



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