The estimated cost has been reduced to 61,843 cr.
Tamil Nadu has urged the Center to secure a 15% share capital in the Metro Rail phase II project, which Union Interior Minister Amit Shah laid the groundwork for on Saturday, sources said.
It has been a rather difficult time for Chennai Metro Rail Limited (CMRL) with exchanges between the Center and the state asking for funds, sources said.
Chief Minister Edappadi K. Palaniswami on Saturday said the project was valued at ₹ 61,843 crore and that the state had already requested funds from the Center for its execution. While the state requested 15% share capital, the Center said 10% would be given as a grant.
“Since the Indian government’s contribution in the form of a grant will affect the current pattern of share ownership and such a grant is also a revenue expenditure, we asked them to consider the aid as social capital, which is considered a capital expenditure with a 50:50 sharing pattern between the Center and the State, ”Mr. Palaniswami said in a letter to Mr. Shah.
The initial cost of the Phase II project had reached almost ₹ 88,000 crore; later it was reduced to almost ₹ 80,000 crore. But sources said the Center had asked for a significant reduction in costs because the investment seemed massive. After making a host of changes, the estimate was lowered to almost ₹ 69,000 crore.
However, the Center insisted that the costs be further reduced.
“It was an extremely difficult task, but we managed to lower it even further to ₹ 61,843 crore. We just hope that at least that will be sanctioned, ”said a source.
Apart from this, CMRL also sought loans from the Japan International Cooperation Agency, Asian Development Bank, Asian Infrastructure Investment Bank and New Development Bank.
With a length of 118.9 km, the Phase II project will include three corridors – Madhavaram in SIPCOT, Madhavaram in Shollinganallur and Light House in Poonamallee.