Lok Sabha Question No. 227 (STARRED), answered on 2019-12-04
Subject: Infrastructure Projects
Ministry: STATISTICS AND PROGRAMME IMPLEMENTATION
Asked by: Asaduddin Owaisi, Imtiaz Jaleel Syed

## GOVERNMENT OF INDIA

## MINISTRY OF STATISTICS AND PROGRAMME IMPLEMENTATION

## LOK SABHA STARRED QUESTION NO. *227 TO BE ANSWERED ON 04.12.2019

## INFRASTRUCTURE PROJECTS

- *227.  SHRI ASADUDDIN OWAISI: SHRI SYED IMTIAZ JALEEL:

Will the Minister of STATISTICS AND PROGRAMME IMPLEMENTATION be pleased to state:

- (a) whether  as  per  the  data  published  by  his  Ministry,  about  355 infrastructure projects, each worth more than Rs.150 crore, have shown cost overrun by 20 percent;
- (b) if so, the details thereof and the reasons therefor;
- (c) the  extent  to  which  delay  in  the  clearance  and  implementation, slow down in economy and labour unrest are responsible for cost escalation of infrastructure and other projects; and
- (d) the steps taken or being taken by the Government for restriction of cost escalation and timely completion of projects?

## ANSWER

MINISTER  OF  STATE  (INDEPENDENT  CHARGE)  OF  THE  MINISTRY  OF STATISTICS  AND  PROGRAMME  IMPLEMENTATION  AND  MINISTER  OF STATE (INDEPENDENT CHARGE) OF THE MINISTRY OF PLANNING (RAO INDERJIT SINGH)

(a) to (d): A Statement is laid on the Table of the House.

Statement referred to in Reply to parts (a) to (d) of Lok Sabha Starred Question No. 227 for answer on 04.12.2019. (a) The Ministry of Statistics and Programme Implementation monitors  on-going  Central  Sector  Infrastructure  Projects  costing  Rs. 150  crore  and  above  on  time  and  cost  overruns,  on  the  basis  of information provided by the project implementing agencies on the Online  Computerized  Monitoring  System  (OCMS)  of  this  Ministry.  As  per the Flash Report of July,2019, 355 projects are showing cost overrun and the overall cost overruns is Rs. 3.88 lakh crore (20.07%). (b) & (c) The details of these projects are available in the flash report at  www.  cspm.gov.in/publications.  The  reasons  for  cost  overruns  are project-specific, depend  on  a variety of technical, financial and administrative factors, and differ from project to project. However, as reported  by  the  project  implementing  agencies  on  the  OCMS  of  this ministry,  the  main  reasons  for  increase  in  cost  of  the  projects  are: Under-estimation of original cost; Changes in rates of foreign exchange and statutory duties; High cost of environmental safeguards & rehabilitation  measures;  Spiraling  land  acquisition  costs;  Shortage  of skilled  manpower/  labour;  Changes  in  Project  scope;  Monopolistic pricing by vendors of equipment services; General Price rise / inflation and Time Overruns. Delay in land acquisition and forest clearance has been  one  of  the  reasons  for  time  overrun  leading  to  cost  overrun  as reported by implementing agencies. (d)  The major steps taken or being taken by the Government to restrict the  cost  escalation  and  timely  completion  of  projects  are:  Periodic review of  projects  under  PRAGATI;  rigorous  project  appraisal;  On-line Computerized Monitoring System (OCMS) for better monitoring; setting up  of  Revised  Cost  Committees  in  the  Ministries  for  fixation  of responsibility for time and cost overruns; regular review of infrastructure projects by the concerned administrative Ministries; and setting up of Central Sector Projects Coordination Committees (CSPCCs)  in  the  States  under  the  concerned  Chief  Secretaries  for removal of bottlenecks and for facilitating the speedy implementation of major projects.

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