Chennai: The central agencies implementing 33 infrastructure projects in Tamil Nadu face a combined cost overrun of 25.41%, according to Union ministry for statistics and programme implementation. The multi-crore projects, initially estimated to cost 79,226 crore, will now cost 99,353.71 crore. Multiple factors contribute to these cost and time overruns.
Data from the online project monitoring system highlights cost overruns in projects such as the Tuticorin airport development and Trichy airport upgrade. The Bharat Petroleum Corporation Limited (BPCL) Irugur-Devangonthi project, approved in 2012, experienced a 155% cost overrun. This project, now anticipated to cost 1,732 crore, is only 44% complete. The Mass Rapid Transit System (MRTS) extension from Velachery to St Thomas Mount, initiated in 2006, also faces a 48% cost overrun. The anticipated cost for this project is now 734 crore. Nationwide, 438 out of 1,747 ongoing projects exceeded their original cost estimates with a combined cost overrun of 62%, as of Nov.
The ministry said reasons for time and cost overruns depend on a variety of technical, financial, and administrative factors and differ from project to project. “The main reasons for the increase in cost of projects include under-estimation of original cost, changes in rates of foreign exchange and statutory duties, high cost of environmental safeguards and rehabilitation measures, spiralling land acquisition costs, shortage of skilled manpower/labour, changes in project scope, monopolistic pricing by vendors of equipment services, general price rise, and time overruns,” the ministry said.
The Tindivanan-Nagari new railway line project, undertaken by Southern Railways, illustrates the extent of these overruns.
