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The aftermath of delayed central infra projects

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As many  as 470 central sector projects have witnessed a combined  cost overrun  of  4.37  trillion  and  560  projects have an average time overrun of 46.94 months,  according  to  the  ministry of statistics and programme implementation (MoSPI). Mint looks at the reasons for the delay

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As many  as 470 central sector projects have witnessed a combined cost overrun  of  4.37  trillion  and  560  projects have an average time overrun of 46.94 months,  according  to  the  ministry of statistics and programme implementation (MoSPI). Mint looks at the reasons for the delay

What is the progress report?

MoSPI monitors infrastructure projects of 150 crore and above. The August 2021 report shows that of the 1,718 central infrastructure projects, 560 projects reported a delay in original deadline, while 86 projects, of which 36 are mega projects worth more than 1,000 crore, have reported further delays. The sector-wise break-up reflects that road transport and highways, railways, petroleum, coal, and power have approximately 1,522 projects being monitored. The delay is likely to result in cost overruns of 4.37 trillion, or 19.9% of the original cost against 8.59% in the quarterly project status (April-June 2021).

Why are the projects delayed?

While localized curbs delayed all projects, project implementing agencies have also ascribed the delays to factors such as the lack of infrastructure support and linkages, land acquisition delays, forest and environment clearances, delayed financing tie-ups, delayed tendering, law and order problems, inadequate manpower, delay in the finalization of detailed engineering, and change in scope of the project. Physical and financial capital and infrastructure is one of the six pillars of the budget proposal FY22 and the administrative ministries concerned need to review the projects and ensure that cost and time overruns are minimized.

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What are the key measures proposed  in  budget 2021-22?

The focus is on building world-class infra-structure and making the country a manu-facturing hub. The National Infrastructure Pipeline with 7,400 projects, Development Financial Institution, which is seen as a provider, enabler, and catalyst for infrastructure financing, and the National Monetization Pipeline of 6 trillion are some of the measures.

Where are the gaps in implementation?

A study conducted by the Project Management Institute and KPMG in consultation with MoSPI in June 2019 recommended improved management of infrastructure projects, including strengthening of internal processes to build in-house project management capabilities and enhanced stake-holder management for land acquisition, obtaining regulatory approvals, a dispute resolution mechanism in the public-private partnership model, and establishment of robust project governance.

What steps are needed to be taken?

Infrastructure creation plays a key role in economic development. Land is a state subject, and it is important that the Centre and states work together to make land acquisition a smooth and seamless procedure for investors. The process of granting environmental clearances needs to be more efficient and transparent. Time-bound clearances and implementation norms should be adhered to by all. Senior officials should be made accountable.

Jagadish Shettigar and Pooja Misra are faculty members at BIMTECH.

 

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