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Delayed projects to cost govt Rs 21,000 cr more

Subhomoy Bhattacharjee in New Delhi

The cost over run on the mega 275 projects of over Rs 100 crore (Rs 1 billion) each that the Centre keeps on its radar has touched 12 per cent at the end of the first half of this year.

In a review of these projects the finance ministry has advised other ministries to pay particular attention to complete the last mile projects "so that anticipated yields on the investments made are realised".

It has also expressed concern that most of these projects have suffered serious cost and time overruns.

The review has been prompted by Union Finance Minister Jaswant Singh's emphasis on expenditure management.

He has said funds will not be a constraint for ensuring completion of the last mile stretch.

The cost over runs imply that there will be an excess expenditure of almost Rs 21,000 crore (Rs 210 billion), which is equivalent to the entire projected food subsidy bill of the Centre for the current fiscal.

From the estimated cost of Rs 1,74,821 crore (Rs 1,748, 21 billion) for these projects, the anticipated expenditure stands at Rs 1,95,723 crore (Rs 1,957.23 billion).

This also includes a cost overrun of Rs 3,313 crore (Rs 33.13 billion) for 4 atomic sector projects, which are monitored by the Prime Minister's Office.

The new cost for the projects are Rs 27,216 crore (Rs 272.16 boillion) compared to their original estimates of Rs 23,906 crore (Rs 239.06 billion).

Among the ministries the largest number of projects with time overrun belongs to the ministry of roads which has a shelf of 96 pending projects.

Of these the range of delay is up to 144 months or 12 years. The railways are of course close behind with 90 projects with time overrun stretching even beyond dozen years.

These two infrastructure sectors between them account for 26 per cent or one fourth of the cost of central sector projects. In absolute terms that is Rs 51,000 crore (Rs 510 billion).

However unlike railways, the escalation in costs for road transport is minimal at Rs 375 crore (Rs 3.75 billion).

Interestingly just 4 projects in the atomic energy sector, which is monitored by the PMO also has a cost overrun of Rs 3,310 crore.

In terms of cost overrun, the largest is the power ministry whose 31 projects are now estimated to cost the exchequer Rs 47,900 crore (RS 479 billion) against Rs 32,000 crore (RS 320 billion) originally, a cost escalation of almost 50 per cent.

The petroleum ministry has a list of 30 projects, which have exceeded their original cost of Rs 34,900 crore (Rs 349 billion) to touch Rs 36,826 crore (Rs 368.26 billion).

The Delhi metro project is also listed among those, which have had cost overrun.

It was originally scheduled to cost Rs 4,860 crore (Rs 48.6 billion) but has been almost doubled to Rs 3,940 crore (Rs 39.4 billion).

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