39 of 221 ongoing central projects in Northeast see cost overruns

Staff Reporter

Guwahati: A total of 221 central sector infrastructure projects with a cost of Rs 150 crore and above are currently underway in the Northeast, out of which 39 projects are now faced with cost overruns. The highest number of 12 projects with cost overruns are in Mizoram, followed by 7 each in Assam and Sikkim. However, not a single project in Meghalaya has seen cost overruns.

The Ministry of Statistics and Programme Implementation (MoSPI) is mandated to monitor ongoing central sector infrastructure projects costing Rs. 150 crore and above on time and cost overruns, based on the information reported by the line ministries and project implementing agencies on the Online Computerized Monitoring System (OCMS) of this ministry.

According to information from MoSPI, as of November 2024, Assam has 65 such central projects underway. Of this, 7 projects are facing cost overruns. The original cost of the 7 projects was Rs 17,766.23 crore, which has been revised to an anticipated cost of Rs 28,683.66 crore. The cost overrun of the projects is 61.45%.

In Mizoram, there are 19 such ongoing central sector projects, of which 12 projects are now faced with cost overruns. The original cost of the 12 projects was Rs 7,755.08 crore, which now have an anticipated cost of Rs 16,403.67 crore. This works out to a cost overrun of 111.52%.

Again, in Sikkim, 22 such projects are ongoing, and 7 of them are now facing cost overruns. The original cost of the 7 projects was Rs 3,542.72 crore, and now the anticipated cost has shot up to Rs 11,486.86 crore. The cost overrun in the projects is 224.24%.

Nagaland has 32 projects that are underway, of which 6 are faced with cost overruns. The original cost of the projects was Rs 4,193.97 crore, which has been reworked to an anticipated cost of Rs 9,578.30 crore. The cost overrun is pegged at 128.38%.

Tripura has 13 central sector infrastructure projects that are underway. Of this, 3 projects are now subjected to a cost overrun of 19.16%. The original cost of Rs 638.62 crore for the 3 projects is now calculated with an anticipated cost of Rs 760.99 crore. 

Similarly, there are 23 such projects currently ongoing in Arunachal Pradesh. 3 of the projects have now witnessed a cost overrun of 201.84%, with the original cost of the projects now recalculated from the original cost of Rs 7,474.01 crore to Rs 22,559.69 crore.

Manipur has a total of 32 projects currently going on, of which 1 project is witnessing a cost overrun of 338.19%. The original cost of the project was Rs 4,454.17 crore. The anticipated cost of this project is now Rs 19,517.70 crore.

The 15 infra projects currently underway in Meghalaya, however, have not seen any cost overrun.

The country as a whole has 438 projects that have seen cost overruns.

According to the Ministry of Statistics and Programme Implementation, 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 the Ministry’s Online Computerized Monitoring System (OCMS), the main reasons for the 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 & rehabilitation measures; spiralling land acquisition costs; shortage of skilled manpower or labour; changes in project scope; monopolistic pricing by vendors of equipment services; general price rise or inflation; and time overruns.

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