Entire cost of Chennai Metro Rail Phase II project will be with TN government: Nirmala Sitharaman

Union Finance Minister Nirmala Sitharaman reiterated on Saturday (September 21, 2024) that the Tamil Nadu Government had consciously decided to implement the Chennai Metro Rail Phase II project “as a State sector scheme; therefore the entire cost of the project will be with the State.”

Union Finance Minister Nirmala Sitharaman reiterated on Saturday (September 21, 2024) that the Tamil Nadu Government had consciously decided to implement the Chennai Metro Rail Phase II project “as a State sector scheme; therefore the entire cost of the project will be with the State.”

In an interaction with journalists of The Hindu Group of Publications at The Hindu’s head office in Chennai, the Finance Minister, while responding to a question on the Public Investment Board recommending ₹ 7,425 crore for the Chennai Metro Rail phase II project, which was not cleared by the Cabinet Committee on Economic Affairs, said: “If there is an equity participation from the Centre, it would be in the range of around ₹ 7,400 crores. Whereas, in 2018, the State government had consciously decided to implement the Chennai Metro Rail phase II as a State sector scheme. Therefore, the entire cost of the project will be with the State, there won’t be an equity participation.”

Also Read: Chennai Metro Rail Phase II: T.N. insists Union government for its share of ₹7,425 crore

She said “There could be some subordinate money coming in from the Centre. These are very well laid out terms and what comes out of these terms are all well determined. The duty of the Department of Economic Affairs is to help the State government to obtain international loans. The Centre is continuously doing it and had arranged for international loans to an extent of ₹ 32,000 crores. There is a continuous engagement of the Centre with the agencies for the State to get money.”

The Minister alleged that the State Government had not used even ₹ 6,000 crores of it. “At one point of time there was an understanding between the State and the Centre that in the due course, as and when, if it is possible for us [the Centre] to take over, we’ll take it over to become a Central sector scheme. But you [the Tamil Nadu Government] keep doing the project so that the money comes and you use it.”

Also Read: Underwater tunnel from Greenways Road to Adyar for Chennai Metro Rail’s phase II project ready

She also said “I can understand the State’s inconvenience. Because when it is a State sector scheme, every borrowing will be in the State’s total borrowing account and the Fiscal Responsibility and Budget Management (FRBM) limit will obviously cross. Therefore it is difficult for States to run such huge projects. That’s why most of the metro rail projects in the country are funded by the Centre [loan is on the Centre.]”