Infrastructure is a major driver for India’s economic growth. The industry’s growth is deterred by poor project management practices leading to time delays, resource shortages and cost overruns. According to a study conducted by KPMG and Project Management Institute, “Of the 1,035 infrastructure sector projects completed during April 1992-March 2009, 41 per cent faced cost overruns and 82 per cent witnessed time overruns.”
Over 850 infrastructure projects faced delays due to time and cost overruns out of a 1,035 during the period between 1992 and 2009. Some of the reasons for such delays are regulatory hurdles, delay in land acquisition, inadequate design and planning and increase in material costs. The study was conducted among 100 top management personnel from leading infrastructure firms. 83 percent of the respondents said frequent design change results in these cost overruns and about 75 percent cited that delays in regulatory approvals and land acquisition for project delays. Government also agreed that about half of 951 projects were delayed due to cost overrun of over Rs. 40,000 crore.
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