India: Delays In Construction Projects


The Ministry of Statistics and Programme Implementation, Government of India has reported that out of 782 construction projects in India monitored by it, a total of 215 projects are delayed with the time over-run ranging from 1 to 261 months. The primary causes which are noted are delays in land acquisition, obtaining forest/environment clearances, tie-up of project financing, finalisation of detailed engineering, tendering, ordering and equipment supply, lack of infrastructure support and linkages, changes in scope, delay in tendering, ordering and equipment supply, law and order problems, geological surprises, pre-commissioning teething troubles and contractual issues.1

Major impact of delays

  1. Delays in projects have a direct bearing on the overall cost of construction. For example, from 2010 to 2015, the cost of cement (per bag) increased by 74%, steel increased by 34%, bricks increased by 69%, sand increased by 240% and skilled labour (on a per day basis) increased by 96%.2 It is therefore, understandable, that the cost overrun in delayed projects has resulted in approx 24.77% increase in the original cost of the projects, amounting to Rs. 1,09,359 crore. 3
  2. Delays in a project also increase the likelihood of disputes between the parties and needless to say, these disputes may derail the project. The average duration for settlement of disputes is more than 7 (seven) years in India.4

In light of the above, this article aims to provide a general overview of the categories of delays that should be borne in mind before executing agreements for a construction project.

Delay events in construction projects may be classified as excusable or in-excusable based on which party bears the cost and time implication of such events. For example, an event of force majeure which impacts the work of the contractor is generally considered as an excusable delay, whereas delays caused by the sub-contractors appointed by the contractor are regarded as inexcusable.

A critical delay in a construction project is considered as a time lag in the completion of work vis-ŕ-vis the time period prescribed in the contract for its completion. During the entire duration of the construction project, there may be various reasons (as discussed above) which push forward the final completion of the project. These reasons for delay may be attributable to the owner or the contractor.

Concurrent delay events: A concurrent delay is most commonly defined as the occurrence of two or more critical events of delay, occurring concurrently and in parallel during the lifecycle of a project, one of which is attributable to the owner and the other to contractor. Thus, even if one delaying event is absent, the other would still delay the project. For example, if there is a delay of 90 days in start of construction because the owner has not given possession of the land to the contractor, and if during this 90 day period, the contractor also fails to mobilise resources, such delay would be considered as a concurrent delay.

In certain projects a situation may arise where two or more delaying events may arise at different times and impact the same work to be performed. If one of the delaying events is attributable to the owner and the other to contractor, such delays are deemed to have a concurrent effect on the project and would also be considered as concurrent delay events.

Pacing delays: Another concept that has recently gained traction in the industry is that of pacing delays, where contractors pace the speed of construction works to manage the delay caused by the owner. Essentially, the contractor seeks to spread out the construction works relative to the delays caused by the owner for reasons such as optimal use of labour and resources, availability of sub-contractors, stalling the delivery of equipment or commencement of work that is weather sensitive, etc. However, it is important to note that such strategic pacing of delays by the contractor should be communicated to the owner and/or done with the owner's permission to ensure that the owner does not argue that such delay in the works is attributable to the contractor.

How do contracts factor in the delays!

The manner in which the parties deal with the different kinds of delay events depends entirely on the contract negotiations between parties. Most contracts allow a contractor to receive additional time for delays attributable to the owner. However, the right of the contractor to claim compensation for such delay is limited. Au contraire, if the delay is attributable to the contractor, the owner is generally entitled to seek liquidated damages and the contractor does not receive any extension of time or compensation.

With respect to the other kinds of delay, the contracts do not generally address the issues of concurrent delay events and/or pacing delays. It is pertinent to mention that certain specific language in the contract like, 'time is of the essence', may even be interpreted to argue that the contractor is under an obligation to expedite the completion of the work and mitigate its losses. This lack of an express understanding between the parties is quite unfortunate since it, more often than not, leads to disputes.

Parkinson's Law5 and the old adage 'time is money' are most apt for the construction industry. Therefore, it is important for the project stakeholders to understand the risks in a construction contract and identify the possible delays in the project lifecycle. This should enable the contractor to notify the owner, seek clarifications (where needed) and open a dialogue to ensure that the project remains on schedule and risks related to litigation, cost and time over-runs are mitigated.

This article was first published in dated 30 December 2016.


1. Annual Report 2015-16, Ministry of Statistics and Programme Implementation.

2. Study on Improvement in Rates and Ratios used in the Estimates of Gross Value Added Construction and Gross Fixed Capital Formation, Central Building Research Institute, published in October 2016.

3. Annual Report 2015-16, Ministry of Statistics and Programme Implementation.

4. Press Release dated 31 August 2016 issued by Press Information Bureau on the reform passed by the Cabinet Committee on Economic Affairs.

5. "Work expands so as to fill the time available for its completion''

The content of this document do not necessarily reflect the views/position of Khaitan & Co but remain solely those of the author(s). For any further queries or follow up please contact Khaitan & Co at

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.