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Rediff.com  » Business » Mega projects continue to face delays: Ministry

Mega projects continue to face delays: Ministry

August 22, 2013 10:50 IST

Indian ParliamentDespite the government’s efforts to fast-track large projects by constituting the Cabinet Committee on Investment, the proportion of mega projects (Rs 1,000 crore or more) facing delays has risen, according to data from the ministry of statistics and programme implementation.

According to the latest data, until May, 48.3 per cent of the total 207 projects worth Rs 1,000 crore (Rs 10 billion) or above, also termed as mega projects, faced delays and witnessed a cost overrun of 19.2 per cent from the originally-sanctioned Rs 656,000 to Rs 781,000.

In April, around 47 per cent projects were running late and the cost exceeded by 18.3 per cent.

During May, three projects - two from the power sector and one from fertiliser -- reported completion.

In the month, 11 projects were delayed additionally from that in the previous month.

As a result, the proportion of projects on schedule rose marginally from 32.5 per cent in April to 32.8 per cent in May. Some projects did not have commissioning deadlines.

According to MoSPI, among the reasons for the delay included that of land acquisition, forest clearance, award of works, legal issues, seepage in power house, etc.

The government set up CCI in the last financial year to fast-track projects that were stuck. However, according to experts, nothing seemed to be working on the ground level as a major chunk of projects still faced delays.

Finance Minister P Chidambaram said in a written reply to Rajya Sabha that on August 1, 2013, 167 projects entailing an investment of Rs 6.57 lakh crore (Rs 6.57 trillion) have been identified for fast tracking.

The government had also cleared 28 projects worth Rs 1.1 lakh crore (Rs 1.1 trillion) last week, 18 of which were from the power segment, four from road and highways sector and three from the railways.

All the six projects under the steel sector remained delayed and the sole petrochemical project -- Assam Gas Cracker Project -- faced delays in this month.

In the coal sector, five of the nine projects were delayed, while in power, 48 per cent of the 62 projects were running late.

The increase in cost overrun by 0.9 percentage points from 18.3 per cent in April to 19.2 per cent in May was on account of cost additions in coal, petroleum, power and railways sector.

Among them, the steepest proportionate rise in cost overrun was witnessed in coal where costs shot up by 7.3 percentage points from 3.5 per cent cost elevation in April to 10.8 per cent in May.

The cost overrun in railways, which already faced an amount which was 149.5 per cent more than the originally-sanctioned amount in April, witnessed a cost escalation of 154.1 per cent in May.

After railways, water resources -- sole project -- faced the highest cost elevation.

In water resources, the original cost of the project was Rs 542 crore (Rs 5.42 billion), which rose to Rs 1,187 crore (Rs 11.87 billion) in May, a cost overrun of 118.6 per cent.

Somesh Jha in New Delhi
Source: