'53% infrastructural projects delayed'

In a reversal of over a decade-long declining trend of time and cost overruns, central projects of 15 major infrastructural sectors have started witnessing increasing time and cost overruns in the last three years.

The recent project implementation report, prepared by the Infrastructure and Project Monitoring Division of the Ministry of Statistics and Programme Implementation, has revealed that the proportion of central projects from these sectors which are running behind schedule has steadily increased from about 34 per cent of the total projects in March 2007 to over 53 per cent during December 2010.

This is an alarming trend given the fact that central sector projects which were facing time overruns had declined from over 62 per cent in 1992-93 to about 32 per cent in 2001-02. The figure remained below 40 per cent till 2006-07, after which it showed a sharp increase.

As a result, central sector projects which are facing cost overruns has also increased. According to the report, the cost overrun of central sector projects has increased from about 12 per cent in 2007-08 to about 21 per cent till December 2010.

Projects facing cost overrun had steadily declined from a high of about 62 per cent in 1990-91 to a low of about 12 per cent in 2007-08.

"An analysis of cost overruns in the last 20 years with respect to the originally approved cost shows that the cost overrun has declined from 61.6 per cent in March 1991 to 12.06 per cent till March, 2008. There is an upward trend from March 2008 to 14.72 per cent in March 2010, and it has stabilised at around 20.7 per cent in December 2010," says the report, which was sent to all the concerned ministries recently.

It has, however, underlined that the last fiscal's jump may have been caused "mainly due to exclusion of projects costing Rs 20 cr-150 cr from the monitoring system" as these smaller projects usually had lower cost overruns. It has also blamed high inflation, saying the "increase is also due to steep rise in prices of cement and steel in 2006-07 followed by recent international recession."

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