From Delay to Delivery: Tackling Time and Cost Risks in Hydropower Projects

Abstract

This study examines the persistent global problem of time and cost overruns in hydropower projects, with emphasis on India. Although hydropower is central to renewable energy strategies and grid stability, project implementation is often hindered by major delays and budget escalations. Since 2000, international data indicate average cost overruns above 30% and schedule delays over 18% (Ansar et al., 2014). The research identifies the root causes of these overruns, evaluates their prevalence in India, reviews case studies, compares national and global trends, and analyses factors such as regulatory complexity, geological challenges, technological integration, and managerial practices. It also highlights best practices to improve project outcomes. Both technical and non-technical factors drive overruns. Technical contributors include complex engineering demands, construction inefficiencies, procurement delays, contractor underperformance, and frequent rework (Debnath, 2025). Non-technical drivers include environmental and social issues, lengthy approval processes, community opposition, political instability, natural disasters, funding constraints, and global disruptions (Debnath, 2025). Cost escalations stem from direct factors—rising material prices, design changes, unforeseen site conditions, and inaccurate estimates—and indirect ones such as inflation, interest burdens, exchange rate volatility, increased overheads, and contractual disputes (Flyvbjerg, 2006). Case studies from India and abroad show varied causes, including difficult geology, social resistance, land acquisition challenges, financial gaps, and weaknesses in planning and design (World Bank, 2020). These overruns affect not only project viability but also economic development, environmental sustainability, and societal welfare. Addressing them requires comprehensive mitigation across all project stages: rigorous planning, strong risk management, effective contract administration, strict construction oversight, and early stakeholder engagement. Adoption of technologies like BIM and digital project management tools can further enhance efficiency (International Hydropower Association, 2021). Sustainable and resilient hydropower development depends on improved governance, technology uptake, and supportive policy frameworks (Central Electricity Authority, 2022).

Introduction

Hydropower is a cornerstone of renewable energy strategies worldwide, providing clean electricity, grid stability, and climate benefits. Despite these advantages, hydropower projects frequently suffer from significant time delays and cost overruns, reducing their economic attractiveness and delaying benefits. Studies show average cost overruns of over 30% and schedule delays exceeding 18%, indicating an industry-wide problem rather than isolated cases.

This work examines the causes of time and cost overruns in hydropower projects globally, with a particular focus on India. It aims to identify key contributing factors, analyze Indian case studies, compare regional and international experiences, assess the role of environmental, geological, contractual, and technological factors, and propose best practices for improved project management.

The literature review highlights that overruns are a persistent issue across infrastructure projects, explained through theories such as the Iron Triangle (time–cost–scope trade-offs), reference class forecasting (using past project data for better estimates), and principal–agent theory (misaligned incentives between owners and contractors). Common causes identified across studies include geological uncertainties, regulatory delays, land acquisition and resettlement challenges, design changes, funding constraints, and contractor performance issues.

Hydropower projects face specific challenges due to uncertain geology, remote and difficult terrain, adverse climatic conditions, long approval processes, social and environmental impacts, and long gestation periods that expose projects to policy, economic, and technological changes.

Causes of time overruns are broadly categorized into:

• Technical factors: design complexity and changes, unforeseen ground conditions, construction difficulties, equipment procurement delays, and poor contractor performance.

• Non-technical factors: delays in environmental and governmental clearances, land acquisition and resettlement issues, community opposition, political and policy changes, financial constraints, natural disasters, and global disruptions such as pandemics.

Conclusion

Time and cost overruns are unfortunately a perennial, endemic problem in the construction of hydropower projects around the globe. This paper has shown the sheer scale of interdependent causes of such overruns, ranging from embedded technical complexity and geology risk to environmental and social sensitivities and project management and contractual matters. Thematic discussion highlights the specific context nature of such concerns but also identifies common underlying drivers. The consequences of such overruns are extensive and have implications on financial sustainability, economic development, social well-being, and environmental sustainability. For this very important issue, a few suggestions can be proposed for different stakeholders: 1) For Researchers: It should be the objective of future studies to create more advanced risk assessment tools fitting the unique needs of hydropower projects. Advanced tools such as AI and machine learning must be integrated to enhance the cost estimation models. Comparison studies between different regions and project types, based on the effectiveness of different mitigations, would be a valuable addition to the topic. 2) For Practitioners in Industry: Active and coordinated management of the project should be there. This means investing in detailed feasibility studies and site investigation, sound risk management strategies at the beginning, and continuous early consultation with all the concerned parties, like the surrounding communities. Implementation of new technologies like BIM and computer-based project management systems should be for achieving efficiency and control. Providing fair and well-written contractual terms with efficient mechanisms for resolving conflicts also holds true. 3) For Policymakers: Governments and regulators should work to de-bottleneck hydropower project approval processes without relaxing robust environmental and social protections. Providing more transparency and accountability in project development by proper guidelines and monitoring mechanism is necessary. Facilitating good hydropower project management and sustainable development can also help prevent time and cost overruns. The answer to the challenge of endemic cost and time overruns, to unlock the full potential of hydropower is a sustainable clean source of energy, is to fall into line with the strategy and best practice espoused in this review. Alignment by the hydropower sector to this will be revolutionary to the move towards more productive and efficient project delivery and making excellent progress towards delivering the vision for the sustainable energy future.

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Copyright

Copyright © 2025 Dr. Sibatosh Debnath. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.