Union Finance Minister Nirmala Sitharaman has confirmed that the Tamil Nadu government will bear the entire cost of the Chennai Metro Rail Phase II project, which is estimated to be around Rs 63,246 crore ¹. This decision was made by the state government in 2018 to implement the project as a “state sector scheme,” meaning there will be no equity participation from the Central government ¹.
The project spans 118.9 kilometers and consists of three corridors:
– _Corridor 3_: Madhavaram to SIPCOT (45.8 km)
– _Corridor 4_: Lighthouse to Poonamalle Bypass (26.1 km)
– _Corridor 5_: Madhavaram to Sholinganallur (47 km) ¹
Initially, the Tamil Nadu government sought funding support from the central government under a 50:50 equity share model, but it was not approved ¹. Instead, the state government has requested loan assistance from bilateral or multilateral agencies to support the project’s financial foundation.
Sitharaman mentioned that the Centre would provide subordinate financial support, with Rs 32,000 crores already arranged for the project through international loans ¹. However, the state government has not utilized even Rs 6,000 crores of this amount.
The Finance Minister acknowledged that large-scale infrastructure projects like this one could strain Tamil Nadu’s borrowing limits under the Fiscal Responsibility and Budget Management (FRBM) Act ¹. Typically, many metro rail projects in India are funded by the Centre to avoid this issue.