In what appears to be a huge obstacle for Phase II of the Chennai Metro Rail, the Ministry of Urban Development has informed the State that the trains should be ‘Made In India.’
Highly placed sources in the government told The Hindu that it may not be possible to fulfil the ‘Make In India’ clause because of the conditions that come with the huge loan from the Japan International Cooperation Agency (JICA). The loan requires the Chennai Metro Rail to have nearly 30% of components for the second phase from Japan, which means it has to necessarily procure trains and the signalling system from that country, sources note. “The remaining 70%, of course, is going to come from India. We have been taking steps to convince the Centre,” an official of the Chennai Metro Rail said.
Issue not resolved
There have been written exchanges between the Ministry of Urban Development and the State government in this regard but the issue has not been resolved, sources point out.
The total cost of the Phase II project, which covers 108 km, is ₹80,000 crore.
JICA will be extending a loan for a large section of the project for nearly 52 km covering two corridors: Madhavaram to CMBT and Madhavaram to Shollinganallur. These two stretches will be partially underground and elevated. The construction of these two corridors alone is estimated to cost ₹44,000 crore.
Sources, however, refused to reveal the rate of interest and the loan amount from JICA. “For a project whose cost is as enormous as this one, it is extremely difficult to find banks that have the kind of money that JICA has and is willing to offer and that too, at an interest rate that is unimaginable,” an official said.
At present, the trains for Phase I are manufactured by French firm Alstom. Unlike the Phase I extension project that was delayed because of approval from Centre, the Phase II project need not wait because a large sum is coming as loan from Japan itself.
“But the Centre has to give clearance for us to go ahead with the trains from Japan because it is a policy of the government. We have to wait to get it from them,” another official said.
An official of the Union Ministry of Urban Development said, “It is mandatory to have trains from India as ‘Make in India’ is the policy of the Centre. This will greatly boost and improve our economy.”
