Assocham pegs key project cost overruns at Rs. 1 lakh cr.

Delays in key Central sector projects have led to steep cost over-runs, which have been pegged at Rs. 1 lakh crore, according to industry chamber Assocham’s estimates.

'Till March 2013, the cost over-runs had been worked out at Rs. 94,800 crore in about 285 Central projects. Assuming about 8-10 per cent annual accretion, the over-runs would easily exceed Rs. 1 lakh crore by March, 2014,” the industry chamber said in a report released recently.

Among the various sectors, the Railways is estimated to have been most affected with maximum escalation in costs which were up nearly three times to Rs. 73,500 crore, from the original estimates of Rs. 27,900 crore in March 2013, the report said.

Other sectors such as power, petroleum and steel have also witnessed steep rise in costs due to delays. 'We would urge Prime Minister Narendra Modi to personally take note of such projects while the PMO should regularly monitor these projects. As there is a demand slowdown in the economy, revival in the investment cycle should be led by Central sector projects,' Assocham President Rana Kapoor said.


HBL