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Rs 530 billion locked up in litigation

Out of 452 central sector projects, each costing over Rs 200 million and above, 205 projects were running behind their approved original schedule as on March 31 this year.

The cost of these 205 projects has increased from the original estimates of Rs 529.87 billion to Rs 841.67 billion, i.e. by 58.8 per cent, Minister of State for Programame Implementation Arun Shourie told Rampal Singh during question hour in the Lok Sabha (Lower House of Parliament) today.

He identified land acquisition, nominal allocation of funds at the time of sanctioning a project and litigation as the main reasons for the inordinate delays and cost overruns of central sector projects.

Replying to a spate of supplementaries, the minister said some projects under the planned schemes were deliberately kept pending to draw funds for payment of salaries to the employees.

He pointed out that four categories of projects had cost overruns ranging from nearly 100 per cent to 195 per cent. There are 17 power projects which have registered a hike of 98.4 per cent.

One information and broadcasting project's cost has gone up by 138.9 per cent, four atomic energy projects have overshot their costs by 192.8 per cent and one project of the finance ministry has registered the highest cost overrun of nearly 195 per cent.

Shourie said there was urgent need to amend the Land Acquisition Act and standardise contract documents to avoid cost and time overruns.

In this connection, he pointed out that due to litigation a mind boggling sum of Rs 530 billion was locked up. If this amount was available, many of the projects could have been completed, he opined.

UNI

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