MOSPI flash report blames cost over runs for negative growth in the infrastructure sector
Many reasons have led to cost overrun of 21 % for around 239 projects up till February 2014 in coal, power, petroleum and steel sector. The turbulence in the infrastructure sector led by delays in regulatory approvals, problems in land acquisition & rehabilitation, and environmental clearances seem to the major factors leading to this cost overrun.
The time overruns for these projects stood between 1 to 26 months, said the economic survey for 2013-14. Out of 239 central sector infrastructure projects costing Rs 1,000 crore and above, 99 are delayed with respect to the latest schedule. On top of it 11 have reported additional delays with respect to the date of completion reported in the previous month. This data was published in the ministry of statistics and programme implementation’s (MOSPI) flash report for February 2014.
The survey does speak of various remedies to ease finance bottlenecks as well as issues like land acquisition, environment and forest clearances leading to long delays in implementation of projects. The government needs to look into these remedies and implement the feasible ones.
IVRCL director of business development S Ramachandran stated that for long-term debt, there has to be money from the government as banks have to be under the RBI’s lens for NPA (non-performing asset) check. He requested the government to take some bearing steps and also influence the banks to continue with the flow of money.
Source- Financial Chronicle
Economic Survey for 2013-14, environmental clearances, growth in the infrastructure sector, IVRCL director, ministry of statistics and programme implementation’s, MOSPI
