Infrastructure investment on track: CII Infrastructure Survey

Business Desk
Infrastructure investments are on track, said 67% of the CEOs of major infrastructure developers and financiers of infrastructure projects in an Infrastructure outlook survey conducted by Confederation of Indian Industry (CII). However, the results of the CII survey also revealed that the increase in inputs and interest costs have lead to cost overrun and is a cause for concern.

The incidence of increase in inputs costs, as revealed by 46% of the respondents, is expected to be in the range of 10-20% of the infrastructure project costs and another 23% of the respondents expected this incidence to be more than 20%.

The CII Survey revealed that 46% of the respondents expected the increase in costs to be absorbed by infrastructure project developers, while 15% of the infrastructure companies expected the cost to be passed on to the clients, i.e., the Government. While assessing the impact of this increase in input costs, the CII survey also revealed that 58% of the respondents expected that there would be a renegotiation of prices, which may lead to delays in implementation.

Assessing the other factors responsible for any delays in project implementation, the CII Survey revealed that Land acquisition continues to be the top most concern for project developers. The survey enumerated the other key reasons for delay in implementation of infrastructure projects and revealed Land acquisition, Environment Clearance and other Government Approvals to be the top three concerns for Infrastructure project developers. Among these three, the CII survey revealed that 81% of the respondents felt that Land Acquisition was the most important impediment to infrastructure project implementation.

According to the CII Survey results, 77% and 58% of the respondent CEOs felt that Environment Clearances and Other Government Approvals respectively were among the top three concerns for delays in project implementation. The other reasons cited by the respondents as bottlenecks in implementation are lack of coordination among various implementing agencies, change in scope and cost variation and construction related delays.