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The cost over-run of Central Sector Projects numbering around 700 and each costing anywhere between Rs.20 crore to Rs. 1000 crore and above, has been steadily declining over the years. Today it stands at 17.7 per cent, compared to 48.4 per cent in 1988 and 61.6 per cent in 1991 and again coming down to 46.9 per cent in 1996, and 26 per cent in 2002 etc. The cost over-run is estimated taking into account, the originally approved cost of a project.
The Ministry of Statistics and Programme Implementation has setup Standing Committees to study time delay and cost over-run as well as fix responsibility for the same. The Committees’ feel that while cost over-run due to general inflation cannot be avoided, the escalation on account of delays, can be minimized. And once the fixing responsibility mechanism comes into force and tightened the time and cost escalations can be brought down to the lowest level. The Committees also feel that through focused attention and constant monitoring by the administrative ministries/departments, the declining trend in time and cost over-runs in project implementation in the Central Sector, can be accelerated.
Infact, an analysis done by the Ministry of 263 delayed projects, reporting cost over-runs recently, showed that only 16 of the projects were responsible for 90 per cent of the total cost over-run among all the delayed projects. The declining trend in time and cost over-run is attributable to closer monitoring and systems improvements brought about by the ministries concerned in conjunction with the Ministry of Statistics and Programme Implementation. The analysis of cost over-run in the last 14 years with respect to originally approved cost, revealed that there has been a decline of over 43.9 per cent during the period, resulting in a substantial saving of the order of Rs.1,41,760 crore.
VKS/SR
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