Delays in Infrastructurte Projects Cost a Massive Rs. 52k Cr. to the Govt Exchequer
Delays in execution of as many as 148 mega projects have seen a massive Rs 52,446 crore jump in their original cost estimates, belying tall government claims on according top priority to the sector’s development. The cost escalation has gone up by 36 per cent from Rs 1,45,271 crore to Rs 1,97,716 crore as on May 31, 2012, official figures state. The cost overrun pertains to 28 power projects, 36 railway projects and 84 schemes of Ministry of Road Transport and Highways (MoRTH). The maximum cost overrun pertains to Railways where “the total original cost of 36 projects was reported by the authorities at Rs 25,089 crore, which is now anticipated at Rs 62,483 crore,” it said. The delayed projects include Udhampur-Srinagar-Baramulla rail line in Jammu & Kashmir where the project cost escalated by a massive 700 per cent to Rs 17,500 crore with time overrun calculated at 201 months. It was originally approved in March, 1995. Likewise, Jiribam to Imphal rail project in North-East, approved in April 2003, saw its cost increasing 510 per cent increase to Rs 3,716 crore. As far as power projects are concerned, “the total original cost of 28 projects was Rs 86,681.8 crore and the anticipated cost of completion is Rs 99,654 crore, implying a cost overrun of Rs 12,972.3 crore,” the figures state. Besides, MoRTH saw cost of its 84 road projects going up by Rs 2,078 crore to Rs 35,578 crore which included many projects in North Eastern areas besides those delayed due to late green clearances. When contacted by the PTI Economic Service, a senior MoRTH official said many of the projects stuck for grant of forest clearances were likely to be expedited now as Ministry of Forest
and Environment (MoEF) has cleared as many as 80 files pertaining to highways projects. Road Transport Minister C P Joshi recently took up the matter of forest clearances for the projects with the MoEF minister Jayanthi Natarajan. The government plans to invest a massive USD one billion in the infrastructure sector in the 12th Five Year Plan (2012-17). Meanwhile, Prime Minister Manmohan Singh last month announced relaxation of norms for transfer of government land to any other entity to remove bottlenecks and speed up public-private partnership (PPP) projects. Also, in a bid to minimise time and cost overruns in road projects, the government has decided to award 30 contracts to build about 4,000 km of highways this fiscal under the engineering, procurement and construction (EPC) mode, the model document for which was approved today. “This year 30 projects would go on EPC. We expect to build 3,000-4,000 kms of highways. In another two-three years we will award 9,000 kms under National Highways Development Project (NHDP),” Road Transport and Highways Secretary A K Upadhyay has said. Under the mode, the contractor will be responsible for the maintenance of the highways for two years while for bridges and structures the liability will be for five years, he said. “In case of early completion of work, the developer will be given bonus while for faults in construction he will attract penalty. In case government fails to fulfill its commitment, it will give damages to the contractor,” Upadhyay has said exuding confidence that the new mode would result in cash infusion. At present the highways works not viable on build, operate and transfer (toll)/ equity mode are taken up under the traditional item-rate contracts. The Cabinet Committee on Infrastructure (CCI), approved the Model EPC Agreement Document for construction of 2-lane National Highways Works, structured in a manner to minimize time and cost overruns in projects with optimisation of design and quality construction. The EGoM (Empowered Group of Ministers) in February, this year, mandated that EPC document after finalisation through inter-Ministerial consultations could be placed before the CCI for consideration. Meanwhile, the CCI has also approved a policy to outsource operation and maintenance of National Highways to private parties for smooth flow of traffic. Also, it gave ex-post facto clearance for six Operation, Maintenance and Transfer ( OMT) projects on EastWest corridor measuring 963 kms which have been awarded after the approval of Standing Finance Committee and the ministry concerned. Upadhyay has said OMT system will help highways users across the country as the traffic on well-maintained roads will be smooth. He has said this fiscal, the government plans to award 2,998 kms to be brought under OMT while it has identified 517 kms to be undertaken during the next fiscal. Meanwhile, sources said, Ministry and Environment and Forest (MoEF) has cleared 80 files pertaining to the Transport Ministry, which in turn would give a boost to road building.