What are the reasons behind the cost overruns in infrastructure projects in India
Examining the factors contributing to the cost overruns in infrastructure projects in India.
There are several reasons behind the cost overruns in infrastructure projects in India:
- Inaccurate project planning: Many projects lack accurate forecasting, leading to inadequate budgetary allocations.
- Delays in project approvals: Lengthy approval processes and bureaucratic red tape can cause delays and subsequently increase costs.
- Land acquisition issues: Difficulties in acquiring land can lead to project delays and increased compensation costs.
- Lack of skilled labor: A shortage of skilled workers can result in project delays and eventual cost escalations.
- Unforeseen geological and environmental challenges: Projects encountering unexpected geological or environmental challenges may require additional resources and time, leading to cost overruns.
- Inflation and currency fluctuations: Economic factors such as inflation and currency fluctuations can significantly impact project costs.
- Contractual disputes: Disputes between project stakeholders, including contractors and government agencies, can result in delays and increased costs.
- Scope creep: Changes to the project scope during execution can disrupt timelines and inflate costs.
- Poor project management: Weak project management practices, including inadequate monitoring and control mechanisms, can contribute to cost overruns.
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