Metro Rail slashes Phase II estimate by ₹7,000 crore

Sunitha Sekar Chennai 17 February 2020 00:43 IST
Updated: 17 February 2020 07:58 IST

Housing and Urban Affairs Ministry has deemed initial cost to be very high

In a huge development, the Chennai Metro has drastically cut down the estimate of its Phase II project by nearly ₹7,000 crore.

From an initial estimate of ₹69,180 crore for 118.9 km, the project cost has been brought down to ₹62,000 crore, highly placed sources told The Hindu.

The Union Ministry of Housing and Urban Affairs (MoHUA) has directed Chennai Metro Rail Limited (CMRL) to reduce the project cost, as it deemed it to be very high, the sources said.


Over the last year, CMRL officials held several rounds of discussions with MoHUA officials to find ways to bring down the project cost.

“It was an extremely challenging and tough process, but we managed to do it. It was very difficult as Bhopal Metro Rail was set as the benchmark for calculating cost per kilometre for the project. It may not be right to compare Chennai with Bhopal, as the purchase price of raw material and labour will be different,” a source said.

A slew of changes made in land acquisition and systems and operations helped in bringing down the cost by about ₹7,000 crore. “The MoHUA also gave recommendations on pricing for some of the systems, and changes were made accordingly,” another source said.

The final revised cost of the project will be sent to the MoHUA, after apprising the State government. After it approves the final cost, a few minor modifications will be made in the detailed project report as well, the source added.

Funds in phases

Sources said the Centre was likely to release funds in phases for Phase II, as requested by the State government.

After signing an MoU with the Japan International Cooperation Agency (JICA), for a loan of ₹20,196 crore, the Metro has been in talks with the Asian Development Bank and the Asian Infrastructure Investment Bank for loans for some of the stretches of the project.

Chennai Metro has already begun floating tenders to first start work on 52 km of the 118.9 km, and the tunnelling contracts will be awarded in a few months.