Study on Project Schedule and Cost Overruns - Expedite Infrastructure Projects

Study on Project Schedule and Cost Overruns - Expedite Infrastructure Projects Study by Project Management Institute & KPMG
Raj Kalady, Managing Director, Project Management Institute (PMI), India

The KPMG in India – Project Management Institute (PMI) study was initiated on the request of MoSPI, which highlights the major reasons for schedule and cost overruns across major sector's infrastructure projects. While some projects are impacted due to external factors which are beyond the control of the implementing agencies such as land acquisition, regulatory approvals, etc., majority of projects are delayed by factors which can be controlled at the project level through proper planning and project management. The study also highlights the severe skill shortage and the growing demand-supply gap for qualified project professionals affecting the infrastructure sector in India. Project owners feel this is a long-term issue which not only makes the projects more expensive and risky, but also results in compromise on quality as well as timelines.

Expedite Infrastructure Projects

Today, India is one of the leading outsourcing hubs in the world. However, the world judges us not just by the talent we have to offer, but also on the basis of our infrastructure capabilities. India has set an ambitious target of investing $1 trillion in infrastructure during the Twelfth Five Year Plan period. Given this factor, infrastructure development has been a key focus area in every Indian state more so in the recent past. At the center as well, big budgets have been allocated for infrastructure development in every Five Year plan. However, the country has consistently fallen short of meeting such targets over the last few years. These projects have been invariably riddled with issues of time and cost overruns. With the objective of finding out the reasons for such schedule and cost overruns, Ministry of Statistics and Programme implementation (MoSPI) recommended PMI to conduct a study, in consultation with KPMG to highlight the major reasons for the time and cost overruns across major sectors in infrastructure projects. The projects surveyed in this report are from nine sectors in the Infrastructure space viz. Power, Petroleum, Coal, Steel, Railways, Roads & Highways, Civil Aviation, Ports & Shipping, and Telecom.

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NBM&CW April 2014

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