Seven central projects in Assam face 61% cost overrun, delays persist

Guwahati, Dec 17: As many as seven Central government sponsored infrastructure projects in Assam have costs overrun of 61.45 percent from the original costs, the Centre has said on Monday.

All these projects that include civil aviation, petroleum, railways, road transport and highways were approved with original costs of Rs 17,766.23 crore which later on registered costs over- run of Rs 28,683.66 crore.

Construction of a new integrated terminal building at Lokpriya Gopinath Bordoloi International (LGBI) Airport in Guwahati, one of the major civil aviation projects in the State, has already registered a cost overrun of Rs 2,333.00 crore from the original costs of Rs 1,142.00 crore. The project, which was approved in December 2016, was supposed to be commissioned by March 2021. The anticipated commissioning date has been revised to May 2025. The project till date has marked a physical progress of 68.99 percent.

Giving the statistics in the Parliament on Monday, Minister of Statistics and Programme Implementation, Rao Inderjit Singh said that the reasons for time and 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 this Ministry's online computerized monitoring system (OCMS), the main reasons for increase in cost of the projects are underestimation of original cost; changes in rates of foreign exchange and statutory duties; high cost of environmental safeguards and rehabilitation measures; spiraling land acquisition costs; shortage of skilled manpower/labor; changes in project scope; monopolistic pricing by vendors of equipment services; general price rise/ inflation and time overruns," Singh said.

The other six projects which have registered costs and time overrun in Assam include development of surface facilities for production and evacuation of crude oil and natural gas by OIL, Numaligarh Refinery expansion project 6 MMTPA refinery by NRL, expansion of Guwahati refinery from 1 to 1.2 MMTPA along with installation of catalytic reforming, construction of Bongaigaon- Goalpara-Guwahati (176 km) stretch of NH, four laning of Balacheraharangajo section of NH-54B (EXT) from 275.00 to 244.000 km in the State, four laning of NH 37 section between end of Moran bypass to Bogibeel junction near Lapetketa (561 km).

Singh said that the Central government has put several monitoring mechanisms in place to avoid such costs overrun.

"Monitoring mechanisms put in place by the Government to avoid the cost overrun of these projects include periodic review of projects under PRAGATI through video conferencing by the Prime Minister; rigorous project appraisal; OCMS for better monitoring," Singh stated.

He said that 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 chief secretaries for removal of bottlenecks and for facilitating speedy implementation of major projects are some of the other measures adopted by the Central government.

The Ministry of Statistics and Programme Implementation is mandated to monitor ongoing Central sector infrastructure projects costing Rs 150 crore and above on time and cost overrun based on the information reported by the line ministries and project implementing agencies on the OCMS of this Ministry, Singh said.

"As on November 1, 2024, there exist a total of 1,747 projects on the monitor of this ministry. Out of these 1,747 projects, 438 projects have suffered cost overrun with respect to the original cost," he said.