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Govt schemes delay pushes costs up

Cost overruns amounting to a whopping Rs 48,483.68 crore have been recorded in respect of the 742 schemes, reports Srinand Jha.

india Updated: Dec 24, 2006 18:19 IST

Delay in central government's scheme has a cascading effect on their approved budget.

Cost overruns amounting to a whopping Rs 48,483.68 crore have been recorded in respect of the total number of 742 central sector schemes that are delayed until March this year, while multi-state projects have emerged as the "most problematic" to implement.

Figures bring out a startling reality: Costs of delayed projects have climbed from the original Rs 2,79,080.80 crore to Rs 3,27,564.48 crore (cost overrun of 17.37%) and some projects have continued to remain in the gestation phase for over a decade.

According to information furnished by the Ministry of Statistics and Programme Implementation, 58 mega projects (Rs 1,000 crore and above investments), 347 major schemes (Rs 100 to 1,000 crore) and 338 medium schemes (Rs 20-100 crore) are placed on the delayed list - effective March 2006.

Mega projects account for 60.44% of total cost overruns in investment terms, followed by major projects (34.24%) and medium projects (5.32%). The delayed list spreads over several ministerial boundaries - with Railways (256) recording the maximum number, followed by Road, Transport and Highways (143), Coal (100) and Power (62).

According to the ministry's implementation status report on central schemes, costs of 84 multi-state projects have climbed from the original Rs 32,749.54 crore to an anticipated Rs 40,587.61 crore.

Among individual states, Uttar Pradesh finds a place in the top half (65 schemes delayed), followed by Maharashtra (61), Andhra Pradesh (58) and Tamil Nadu (57).

"The fact that states affected by Left Wing Extremism such as Bihar, Jharkhand or Chhattisgarh are not seen high up the order is because not many central schemes are being implemented in these states", said an official. Ostensibly, the same holds true for the insurgency-affected Northeastern states. Nagaland, for example, had just one central scheme under implementation, as on March this year.

On the "chronic delay list" is included the Tehri dam project which was sanctioned in March 1994 for scheduled commissioning in March 1999 at an original estimated cost of Rs 2,963.66 crore. So far, the project has witnessed a time overrun of 91 months. The Padladiya dam project near the Indo-Bhutan international border, meanwhile, has witnessed a near 100% cost escalation: From original estimates of Rs 542.90 crore to the revised cost of Rs 1,069.40 crore.

Official version is that funds constraints, complications in land acquisition; environmental clearance and delay in the supply of equipment are some factors responsible for implementation delay. The status report on implementation of central sector projects lists another ambiguous factor of "slow progress".