Tamil Nadu yet to sign Metro Rail MoU with Centre

The Centre is yet to release this year's budgetary allocation of Rs 652 crore for Chennai Metro Rail, minister of state for urban development Saugata Roy told the Rajya Sabha on Thursday. As the announcement raised concerns of the Rs 15,000 crore getting delayed, Chennai Metro Rail was quick to clarify that the state government has sent a draft MoU to the Centre and that it was only a matter of formality before it was signed
."The state government has sent the draft to the Union urban development ministry. The MoU will be signed soon and funds will be released. There will be no delay of works," S Krishnamoorthy, Chennai Metro Rail chief public relations officer, told TOI.

Earlier in the day, replying to a question from AIADMK member N Balaganga, Roy had said that this year's allocation would be released to the special purpose vehicle funded by Tamil Nadu government and the Government of India only after the state signed the MoU. "We urge the Tamil Nadu government to sign the MoU so that the Government of India can release funds," he said.

The Union government would pay 20% of the project cost. In the last three years, the Centre has given Rs 152.79 crore to the project while the state government has contributed Rs 1,050 crore. Japanese funding for the project would be routed through the Centre, for which the MoU is essential. "As on July 31, 2010, Rs 306.24 crore has been spent on the project," the minister said.

The initial phase involves more expenditure from the state government since it involves land acquisition. In the later years, funds from the Centre and the Japanese funding agency will constitute a lion's share of the expenditure. "Now we are in the process of putting up elevated structures. Only when we take up underground construction do we need larger funds. The MoU will be in place soon and every year the allocation would be released," an official said.

Chennai Metro Rail has set itself a target of 2013 to commission the first stretch from Koyambedu to St Thomas Mount.