Projects delayed is growth denied

On the need to put in place a project clearance body with an overarching mandate, the fate of mega projects currently under execution perhaps offers the most compelling reason. The newly formed Cabinet Commitment on Investment (CCI), cleared by the government last week to fast-track big-ticket projects, despite being a watered-down version of the original National Investment Board (NIB) proposed earlier, could make a difference.

Currently, among the 198 mega central sector projects costing over Rs 1,000 crore that are under implementation, nearly half, or 81, are running behind schedule. These include seven projects being executed by the Railways that are delayed by more than a decade, according to the Ministry of Statistics and Programme Implementation's latest project status estimate (updated end-July 2012).

The primary reasons for the time overruns, as reported by various projects implementing agencies, include delays in land acquisition and the lack of requisite clearances, especially the forest and environment nod. Much of this arises on account of inadequate coordination among the nodal ministries and administrative wrangling. Added to this are delays in award of works, lack of skilled manpower, high quoted price in tendering process, law and order issue and the poor mobilisation of workers by the contractor.

In all, out the 81 projects hanging fire, 44 had overall delay in the range of 1 to 12 months, 18 projects had a delay in the range of 13 to 24 months, 16 projects had a delay in the range of 25 to 60 months and 3 projects had recorded delays of 61 months or more, according to the status report.

These delays have an obvious cost implication that has to the ultimately borne by the nation as a whole.

As a result of the delays of the mega projects tracked by the Statistics Ministry, the cost overrun of these 198 projects on a cumulative basis, is pegged at Rs 1.02 lakh crore (or about 16 per cent of the original cost till July, 2012).

While the original proposal that cast the NIB as an appellate body with overriding decision-making powers would perhaps have been the ideal solution, the CCI as a one-stop-shop for mega project clearances should, nevertheless, help.

Anil is a Senior Editor based in New Delhi.

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