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

The Union Finance Minister stated that the State government chose to implement Chennai Metro Rail Phase II as a State-run project, meaning the State will bear the entire cost without any equity participation

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.]”

Countering the State’s allegation of the Centre refusing or delaying funds for the project, she said, “Political narrative also will have to be with a certain sense of responsibility. I find in today’s opposition a sense of wanting to be wild in allegations without adequate backing of facts.”

Responding to a question on the political narrative set by the DMK during the campaign for the 2024 Lok Sabha elections that for every one rupee that the State contributes to the Central pool, it gets back only 29 paise, she said political narrative is just one factor. “Whether it cost me a seat or not, particularly in matters of revenue, I would go on the side of caution rather than speak carelessly.”

On a question of BJP’s outlook in approaching the 2026 Tamil Nadu Legislative Assembly elections, she said the party has been working hard in the last two-three years. “The past [BJP State] presidents had also made sure that the BJP’s agenda was taken forward.”

According to her, even though the party had ended up in winning no seats in the 2024 Lok Sabha elections in Tamil Nadu, it had made an impact. She said “We will ensure that we are able to reach every booth level for the 2026 elections. It will be too early to comment on alliances and the party’s leadership will decide on it.”

While responding to a question on the State’s allegation of the Centre not allocating adequate disaster relief funds for the Chennai and Thoothukudi floods, she said the 14th Finance Commission had created a formula for allocating funds through the National Disaster Response Fund (NDRF) and State Disaster Response Fund (SDRF). “The Central Government cannot tweak it in favour of or against any State. The Finance Commission made it an institutional arrangement for States to receive funds upfront for disaster relief.”

She also pointed out the Centre had taken steps by arranging loans through multilateral financial institutions for preventing disasters in disaster-prone areas. She said following the Chennai floods in 2015, the Centre had arranged for ₹9,000 crore through borrowings for creating drainage infrastructure in Chennai. Still, we couldn’t escape floods during Cyclone Michaung. “Where has that ₹9,000 crore gone?” she asked.

Published - September 22, 2024 11:16 pm IST