Infrastructure Projects to Show Cost Overruns for Delayed Construction During 2nd Surge in Covid 19

According to a report of Ministry of Statistics and Programme Implementation, GOI as many as 470 infrastructure construction projects, each worth Rs 150 crore or more, have been hit by cost overruns totalling more than Rs 4.38 lakh crore. The Ministry of Statistics and Programme Implementation monitors infrastructure projects worth Rs 150 crore and above. Of the 1,737 such projects, 470 reported cost overruns and 525 were delayed.

Total original cost of implementation of the 1,737 construction and infrastructure projects was Rs 22,33,409.53 crore and their anticipated completion cost is likely to be 26,71,440.77 crore, which reflects overall cost overruns of 4,38,031.24 crore (19.61 per cent of original cost), " the ministry's latest report for April 2021 said. One of the major contributor for the cost overrun was delayed completion and increase in cost of commodities.

Reasons for time overruns as reported by various project implementing agencies include delay in land acquisition, delay in obtaining forest and environment clearances, and lack of infrastructure support and linkages. Delay in tie-up for project financing, delay in finalisation of detailed engineering, change in scope, delay in tendering, ordering and equipment supply and law and order problems are the other problems for delay in construction and infrastructure projects. 

 
The report cited 'state-wise lockdown due to surge in 2nd wave of COVID-19' as a reason for the delay in implementation of these construction projects as during second wave of Covid 19, many of the civil and other construction workers returned to home. They had apprehensions of not getting treatment if something happens, so returned home to save life.

With the overall Covid situation in India marginally improving, at least for now and in terms of daily new cases — from over 4 lakh a day in the first week of May to less than 2 lakh now — the focus of the infrastructure companies could shift towards getting back the migrant small construction contractors and their labourers and rescheduling project deadlines.

Comments

Post a Comment

Popular posts from this blog

Counter the Problem of Labour Crisis due to Reverse Migration in the Wake of 2nd Surge in COVID

Image
Due to imposition of partial lockdown in different parts of India in the wake of 2nd surge in COVID 19, several sectors of economy, specially construction and infrastructure sector are facing labour crisis due to ongoing reverse migration of the small contractors and their labours to their home state like Uttar Pradesh, Bihar, West Bengal etc. The Small contractors and their labour are afraid of even more stringent restrictions, which force them to leave the construction projects, sites for their homes. Sectors such as construction and real estate, manufacturing and industrial, healthcare and pharmaceuticals, power and energy are already gripped by another labour crisis.  Labour crisis due to Reverse Migration in the wake of surge in Covid 2nd wave  According to the studies by different agencies, already data show a labour shortage of 15 % in various skills like civil construction, Mechanical fabrication & erection, Piping, Welding including IBR Welders, Insulation works, ...
Read more

Infrastructure Push to Employment Creation & Problems Faced by Small Contractors

Image
Who are small contractors? A company delivering works & services in construction & manufacturing industry , with limited resources, usually as a sole proprietorship or simple partnership, the owner manages most of the company's key activities is a small contractor. A small contractor usually do not employ qualified personnel and the promoter is too busy with the problems of getting jobs, following up purchases of materials, supervising work on site, following up the processing of payments etc. Most small contractors prefer to maintain tight control of all aspects of the company’s operations, especially where this involves monetary transactions such as negotiating with potential clients or suppliers, or purchasing of materials.  Advantages of small contractors The construction industry is an important source of employment in India. It accounts for about 8 % of the total employment. Construction typically contributes 5 % to 9 % to GDP in India and provides backward and...
Read more

Advance Payouts and Flight Tickets to Get Migrant Labour Back to Construction Projects

Image
  Many EPC (Engineering, Procurement & Construction) Companies and contractors of different Construction Projects are offering incentives, paying in advance and booking flight tickets to get migrant Contractors and labourers back to work, in response to the shortage of workforce in the construction sector today post Covid 2 nd wave in India. This segment of economy was largely hit due to the Covid-19 induced lockdown/restrictions in different states with a huge number of migrant workers leaving the city for the fear of coronavirus 2 nd wave in April and May this year. Although many of them are returning to the projects now, but it is happening in a staggered manner. At many project site, the number of workers is near to what it was prior to the lockdown but at places construction work is going on with half the required labours. The work resumed in June after a gap of two months, with lesser number of workers. But the workforce is slowly getting back as the fear of the vir...
Read more