New Delhi, Oct 5 (IANS): The Centre on Saturday said it will finance almost 65 per cent of the estimated cost of Chennai Metro Phase 2 (total cost Rs 63,246 crore).

This financing will include the entire required loan of Rs 33,593 crore besides the equity and subordinate debt of Rs 7,425 crore, according to a Ministry of Finance statement. The balance 35 per cent of the estimated cost will be financed by the state.

The Union Cabinet on Thursday approved the Chennai Metro Rail Project Phase 2, comprising three corridors with Rs 63,246 crore outlay. The approval has freed up budgetary resources of the state to finance other development activities to an extent of Rs 33,593 crore, informed the ministry.

So far, the project was being implemented as a ‘state sector’ project, with the Tamil Nadu government to finance almost 90 per cent of the estimated project cost.

The role of the Centre was to finance 10 per cent of the project cost, excluding land cost and a few other items as per the Metro Rail Policy 2017.

However, the Centre had also assisted the state in mobilisation of Rs 32,548 crore as loans from bilateral and multilateral agencies to the state government directly, out of which around Rs 6,100 crore has been utilised so far.

The loans taken from multilateral and bilateral development agencies will be treated as loans to the Central government and will be provided directly to Chennai Metro Rail Limited (CMRL) from the Centre’s budget.

Before approval of the project by the Centre, the responsibility of providing or arranging the loan financing for the project was on the state.

The ministry will approach bilateral and multilateral agencies, namely the Japan International Cooperation Agency, Asian Development Bank, Asian Infrastructure Investment Bank and New Development Bank to renegotiate the loan and project agreements.