Centre’s fund to come in soon for Chennai Metro Rail’s phase II project

The funding from the Centre for Chennai Metro Rail’s Rs 63,846 crore phase II project is expected to come soon, sources said. The Memorandum of Understanding between the Centre and the State will be signed shortly and their contribution will come through in multiple tranches in a couple of months, sources said.

“First, they [Ministry of Housing and Urban Affairs] gave a draft of the MoU, then we requested some changes. Subsequently, some changes had to be done on both sides and we are closing in shortly. It will be signed this month or early next month. The funds will start flowing substantially before the end of this fiscal year,” a source said.

Chennai Metro Rail’s 118.9 km phase II project work is underway for the last couple of years with the plan to build three corridors—Madhavaram to SIPCOT (corridor 3), Light House to Poonamallee (corridor 4) and Madhavaram to Sholinganallur (corridor 5).

After the project was conceived and the approvals, the construction commenced as a ‘State sector’ project to avoid any delays in starting the project; even as this happened, the State continued to place requests to the Centre and pursue it for their approval. Their approval and financial assistance were crucial for the State and it finally came in October this year. 

Of the total cost of Rs 63,246 crore for phase II project, a bulk of Rs 33,593 crore is coming in the form of loans from bilateral and multilateral agencies and the Centre will provide Rs 7,425 crore as equity and subordinate debt. The Tamil Nadu government will contribute Rs 22,228 crore including the equity and subordinate debt and subordinate debt for land and other aspects.

The Centre’s equity participation was important for multiple reasons. Apart from the Centre’s equity share, the loan amount of Rs 33,593 crore ‘will be treated as loans to the Union government’ and it will be processed directly to Chennai Metro Rail Limited (CMRL) from the Union budget, sources earlier said.  One of the key aspects here is, this move significantly helps to ease the State’s borrowing load and it can allocate the budgetary resources for various other projects, sources added.

Published - December 12, 2024 01:09 am IST