HindustanTimes Fri,26 Dec 2014

Cost of project delays: Rs. 45k cr

Chetan Chauhan, Hindustan Times  New Delhi, August 03, 2009
First Published: 00:35 IST(3/8/2009) | Last Updated: 00:39 IST(3/8/2009)

Nearly 50 per cent of big projects in India are running late, resulting in the government spending Rs. 45,000 crore more than the original cost.


Going by the Planning Commission’s estimate of a poor person spending less than Rs. 10 a day on food, Rs. 45,000 crore is enough to feed 30 crore for five months.

This staggering sum could have financed the midday meal scheme for the country’s 14 crore school going children for a month, or bought the airforce 1800 HAL helicopters.

In its report to the government, the Ministry of Statistics and Programme Implementation has estimated the escalation cost of 925 projects at more than Rs. 20 crore each.

It found that 423 of these projects —or nearly 50 per cent —have been delayed by between six months and two years, the main reason for rendering them more expensive than estimated initially.

The 2,000 MW nuclear power plant at Kadankula, Tamil Nadu alone, delayed by 18 months, for instance, has seen a price escalation of Rs. 3,796 crore.

“Cost overruns in the 423 projects is close to Rs. 45,500 crore, 17 per cent of the original cost of Rs. 2,46,070 crore,” a senior ministry official, who did not want to be named, said.

What we are losingThe reasons for the delay vary. “In many cases, the project proponents failed to acquire land in time to start the project. Projects were also held up  due to delay in getting environmental clearance, especially for power and road projects,” the official said.

To prevent such delays, the Committee on Infrastructure under the Planning Commission has decided that no project in future will be approved until 70 per cent of land required to implement it is acquired. “It will reduce delays by 50-60 per  cent,” a panel member said.

Environment Minister Jairam  Ramesh said his ministry would try to give environment and forest approval in a time-bound manner.

“We want such a regime  where the project proponent is told within a specified time whether the project can get  clearance or not, rather than  having  repeated hearings,” he said.

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