Poor execution of 134 investment projects in Madhya Pradesh has resulted in serious cost push worth about Rs 97,000 crore as of financial year 2013-14, that is about 27 per cent of their actual costs of Rs 3.6 lakh crore, noted a just concluded Associated Chambers of Commerce and Industry of India (ASSOCHAM) paper.
Of about 399 investment projects that under different stages of implementation in MP about 224 projects have recorded either time overrun or cost escalation, noted a paper on 'Impact analysis of delay in implementation of investment projects in MP,' conducted ASSOCHAM.
While out of these 224 investment projects, about 134 projects have reported cost escalation and the remaining have recorded time overrun which varies from about one month's delay to over 50 months delay.
National secretary general of ASSOCHAM DS Rawat while releasing the chamber's paper at a press conference here on Wednesday said, "Fund constraints, delay in land acquisition, environmental and other clearances together with a host of factors like delay in site handover due to contractual incompleteness, dearth of skilled workforce, use of primitive technologies, law and order problems are affecting implementation of investment projects."
Rawat further said, "Investors also play a significant role in delay in implementation of projects due to a host of reasons like - inappropriate planning, change of ownership, lack of co-ordination with contractors and other stakeholders involved."
Another disturbing trend is that new investments in MP have been going down over the years and in FY 2013-14, new investments attracted by the state plummeted significantly by about 83 per cent year-on-year i.e. from a level of about Rs 37,000 crore in FY 2012-13 to just about Rs 6,350 crore in the last fiscal, highlighted the paper prepared by the ASSOCHAM Economic Research Bureau (AERB).