 "Chennai Metro Rail Project Phase-II planned at a cost of Rs 44,000 crore")
Tamil Nadu is planning to expand the Chennai Metro Rail project along three corridors and an orbital corridor at an estimated cost of Rs 44,000 crore.
The J Jayalaithaa-led government has approved for a Detailed Feasibility Report for the expansion of the Project along three corridors — North West to South East; West to East and an orbital corridor. The report will be ready shortly, said the state government.
The state wants to increase the share of public transport, including metro rail, among commuters in Metropolitan Chennai. It may be noted that despite the project being conceived by DMK, the ruling AIADMK has decided to go ahead with the project. It also had plan for monorail, but it has taken off yet.
Tamil Nadu Chief Minister Jayalaithaa had inaugurated the operations of Chennai Metro Rail in June 2015. The services were originally conceived in 2003. Phase-I of the Chennai Metro Rail Project, which is currently under implementation, covers a total length of 45 kms, portion of which was inaugurated last year.
Work on the metro services started in 2009 and original estimate cost was around Rs 14, 600 crore for the Phase-I, but it was increased to Rs 20,000 crore due to delay of over a year.
Of the total project cost, 59% will be JBIC's loan, while 30% equity will be shared by Centre and state governments equally. The balance will be mobilised through subordinate debt, of which 5% from the Centre and 5.78% from Tamil Nadu.
Recently, the Cabinet gave a nod for Phase I Extension from Washermanpet to Tiruvotriyur / Wimco Nagar covering a further 9.51 kms at a cost of Rs 3,770 crore.
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The Phase II of the project has been included in the rolling plan for the current year for Japan International Co-operation Agency (JICA) for funding, said in the Memorandum, which was submitted by Jayalalithaa to the Prime Minister on Tuesday.
The CM urged PM Modi to instruct the Ministry of Urban Development and the Ministry of Finance to support the proposed Phase II of the Metro Rail Project of Chennai to ensure that all necessary clearances are provided expeditiously and work can commence early.
Tamil Nadu also asked the Centre to have a detailed review of the provisions of the MoU and to suitably revise the clauses to make it more fair and equitable, truly reflecting the spirit of joint ownership.
“Certain clauses which are not in the interest of the State Government and of the Project", said Tamil Nadu Government. These clauses do not provide for an equitable sharing of risks and costs.
For instance, Clause 12.1 requires the State Government to bear the full cost of land and Relief & Rehabilitation cost, including escalation. The land acquisition cost is provided by the State Government as subordinate debt to CMRL. This skews the capital structure of the company towards higher debt.
Further, while the state government has to pay central government departments for their land, state government land is provided free of cost. A fair solution would be to consider land cost as equity contribution of the central or state government who are transferring the land.
As per Clause 11 of MoU, any escalation in Project Cost and foreign exchange fluctuation beyond the approved project completion period has to be fully borne by the State Government. As per Clause 12.16, cash losses have to be borne only by the State Government. On the other hand if there is a profit, the Central Government would be entitled to dividend.