82 percent of projects tardy, exceeded costs: Survey
About 82 percent of the infrastructure projects during April 1992-March 2009 overshot their scheduled completion dates while 41 percent faced cost over-runs, said a survey released Thursday.delhi Updated: Mar 11, 2010 17:06 IST
About 82 percent of the infrastructure projects during April 1992-March 2009 overshot their scheduled completion dates while 41 percent faced cost over-runs, said a survey released Thursday.
In a study conducted together by global consulting firm KPMG and Project Management Institute (PMI), a leading global association for project management professionals, frequent design changes, delays in regulatory approvals and weak project planning are the primary reasons for rising cost and time of completion.
Over 120 senior executives from over 100 companies were quizzed to find the key challenges infrastructure development faces in India.
About 83 percent felt primary reason for cost over-run is frequent designing changes, while 75 percent pointed towards regulatory approvals and land acquisition delays as a major impediment.
"The industry is marred by poor project management practices leading to cost over-runs, time delays and resource shortages in most of the on-going projects," said Raajeev Batra, head of project advisory services, KPMG India.
As per the ministry of statistics and programme implementation, there were 951 on-going infrastructure projects with an anticipated cost of Rs.607,188 crore with mega-projects constituting around 68 percent of the total investment.
"If a power project comes online a day ahead of schedule the saving is about Rs.2.5 crore. It is critical for all stake-holders to mitigate delivery weaknesses while consolidating strength for successful project delivery," said Raj Kalady, managing director of PMI India.
Another reason for the poor rate of delivery is a resource crunch across various tiers of the workforce.
Fifty-three percent of the respondents agree that non-availability of skilled labour is a root cause for a delay in projects, while 16 percent strongly agree that this is an area of grave concern.
The study recommends that project management be adopted across organisations and the government along with industry take steps to train talent in this field.
"Enhancing resource utilisation through better planning and monitoring is important. However, this can suffice only as a short term measure. Steps need to be taken to ensure quality education and professional project management training," said the report.
"Of all the ongoing projects running within budget, 85 percent have an established project monitoring office," the report added.