Cost of 16 major central government projects in Tamil Nadu rises by 54%

There was a 54% increase in the cumulative cost of 16 major central government projects in Tamil Nadu due to cost overruns due to reasons such as financial and administrative factors. This was revealed by Rao Inderejit Singh, Union Minister of State (Independent Charge) Ministry of Statistics, while responding to a question raised by MP Arni MK Vishnu Prasadh in the Lok Sabha recently.

The initial cumulative cost of the 16 projects was ₹40,068 crore, but delays increased it to ₹61,577 crore. Of the 16 projects, four are railways and three are national highways.

For example, two railway projects approved in 1995 and 2007 were to be completed in 2020 and 2019 respectively. However, they are expected to be completed in 2025.

The reasons for time and cost overruns are project specific and depend on a variety of technical, financial and administrative factors. It also differed for each project. There were public order issues; delays in land acquisition; delays in deforestation of the environment and forests; funding constraints; rehabilitation and settlement issues; permission from local/municipal body and Covid-19 lockdown, Minister said.

However, as indicated by the project executing agencies on the ministry’s online computerized tracking system (OCMS), the main reason for the increase in the cost of the projects is the underestimation of the initial cost; high cost of environmental protection and rehabilitation measures; soaring land acquisition costs; shortage of skilled labour; changes in project scope; monopolistic pricing by equipment service vendors; general price rise/inflation and time overruns.

Regarding the measures taken to minimize the cost/time overrun of the projects, the Minister answered that there is now a periodic review of the projects within the framework of the proactive governance and rapid implementation (PRAGATI) by videoconference by the Prime Minister ; rigorous evaluation of projects; OCMS for better monitoring; establishment of Revised Costs Committees in the ministries for the regular examination of infrastructure projects by the administrative ministries concerned.

Steps are also being taken to set up the Central Sector Project Coordinating Committee in the States under the leadership of the Chief Secretaries to remove bottlenecks and facilitate the rapid implementation of major projects, the Minister said. .

Published on

April 17, 2022

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