How delayed infrastructure projects are slowing down India’s growth: An India Tracker analysis

By: Anshul Vipat

Out of 647 delayed projects, 132 have delay in the range of 1-12 months, 118 projects have delay in the range of 13-24 months, 273 (42.19 percent) projects have delay in the range of 25-60 months and 124 projects have delay of 61 months and above

In 1997, the Indian Railways decided to connect two important industrial towns - Mahbubnagar in Karnataka and Munirabad in Andhra Pradesh (now Telangana). Even after 22 years, the project continues to be delayed and as per the latest estimates the anticipated date of commissioning is March 2023. Amidst this inordinate delay, the project has now earned the dubious distinction of being the most delayed railway project in the country.

Unfortunately, this is not an isolated project. The Mahbubnagar-Munirabad project is one of the 647 severely delayed infrastructure projects flagged by the Infrastructure and Project Monitoring Division (IPMD) under the Ministry of Statistics and Programme Implementation (MoSPI) in its latest report on infrastructure projects. Out of the 1,526 projects listed in the report, seven projects are ahead of schedule, 265 are on schedule, 647 are delayed, 393 projects reported cost overrun and 219 projects reported both time and cost overrun with respect to their original project implementation schedules.

Where’s the delay?

Out of 647 delayed projects, 132 have delay in the range of 1-12 months, 118 projects have delay in the range of 13-24 months, 273 (42.19 percent) projects have delay in the range of 25-60 months and 124 projects have delay of 61 months and above.

Muneerabad-Mahaboobnagar rail project as mentioned above has earned the distinction of most delayed project. The second most delayed project is the Belapur-Seawood-Uran Electrified Double Line, which is delayed by 228 months. The six-laning of Krishnagiri-Walajahpet section on NH-46 in Tamil Nadu is the most delayed road project at 125 months. For petroleum sector, 88 out of 139 projects are delayed, with respect to their original schedule. The 1104 km-long, Kochi–Koottanad–Bangalore–Mangalore Phase II project, is the most delayed project, with a delay of 146 months.

A total of 53 out of 78 projects are behind their original schedule in the power sector. The top delayed projects are Parbati Hydroelectric Project in Himachal Pradesh (171 months), Subansiri Lower Hydroelectric Project in Arunachal Pradesh (155 months), and Barh super thermal power project in Bihar (149 months).

Why the delay?

While the report has not mentioned the reasons for the delay, a recent report prepared by NITI Aayog has blamed delay in tie-up of project financing, delay in tendering, delay in ordering and equipment supply, contractual issues, land acquisition and other factors. The NITI Aayog report has listed 116 such projects that have incurred a cumulative capital expenditure of Rs 20,311 crore to the government.  As many as 55 of the 116 projects have been stuck due to land acquisition issues between the Centre and states, and bureaucratic red tape. The ministries concerned have raised issues of state governments either not sanctioning the acquisition of land or not giving the requisite approvals, according to the NITI report.

To put it in perspective, the cost of stuck railway projects escalated by about 49 percent to Rs 88,373 crore, as many of them were put on hold for a long-standing period. The Railways’ 72 projects have seen an expenditure of over Rs 8,500 crore so far, the report stated. On the other hand, the cost escalation for 33 stuck projects at road transport and highways is lower at 6 percent. These had a higher sunk cost than railways, at Rs 11,000 crore.

The policy think tank of the government has now recommended these 116 projects to be shut down citing high costs. If accepted, these projects may be removed from the Centre’s project-monitoring system, which has been created to expedite infrastructure execution, it said.

The way ahead

In 2021, Prime Minister Narendra Modi launched PM Gati Shakti, a National Master Plan for multi-modal connectivity. The aim was to coordinate the planning and execution of infrastructure connectivity programmes across the country and speed up implementation in order to bring down logistics costs. While some projects have received a boost, majority continue to face delays and cost overruns as seen above.

It is important that the monitoring mechanism put in place by the government to avoid the cost and time overrun of projects be made more effective and realistic through fixing responsibilities. The wastage of money and resources on account of cost overrun can be handled through a meticulous monitoring and developing suitable course of action on priority to ensure timely completion of projects scheduled for commissioning.

It’s time to get moving and shed the project paralysis!