TIME-COST OVERRUNS OF CENTRAL PROJECTS SHOW DOWNTREND
As a result of effective
monitoring, the overall cost overrun in central sector projects
costing Rs. 20 crore and above has come down from 62% in March
1991 to 21.9% in December 2002 with respect to their original
approved costs.
According to the
latest available Project Implementation Status Report on central
sector projects prepared by the Ministry of Statistics and Programme
Implementation, power, mines and steel sectors have performed
better while the performance of civil aviation, atomic energy,
railways, urban development and shipping & ports sectors have
been poorer.
The Report covered
548 projects including 39 mega projects (costing Rs. 1000 crore
and above), 241 major projects (costing between Rs. 100-1000 crore)
and 268 medium projects (costing between Rs. 20–100 crore). The
anticipated cost of these projects is Rs. 2,16,263 crore. The
total expenditure till December 2002 was Rs. 71,638 crore which
is about 33.13% of the total estimated cost of the projects included
in the Report.
Against an approved
outlay of Rs. 31,466 crore for the year 2002-2003, the expenditure
during the first three quarters was Rs. 15,860 crore. Mega and
Major projects account for about 51% of the total number of projects
and about 93.75% of the total anticipated cost. Initially 105
projects were scheduled to be completed in the year 2002-03. Later
70 projects were added with dates of completion by March 2003.
Out of the 175 projects due for completion during the year, 43
have been completed.
Time and cost overruns
have been a major problem affecting the central sector projects.
The study shows that during the year only 23 out of the 178 delayed
projects have contributed nearly 90% of the total cost overruns.
The quarterly review
of the project enables the Government to identify the constraints
and helps to resolve the problems affecting the implementation
of the projects. In-depth critical review of the progress by the
Administrative Ministry with the Project Authorities and follow
up with the State Governments enables the Government to minimize
delays and cost overruns in completing the projects.
