Centre Releases ₹3,000 Cr for Chennai Metro Phase 2 in FY26, Total Allocation Touches ₹8,400 Cr

The Union government has released ₹3,000 crore so far in FY2025-26 for the Chennai Metro Rail Phase 2 project, the biggest-ever metro allocation in India for the year. According to an RTI reply by Dayanand Krishnan, an activist, Tamil Nadu now has a total of about ₹8,400 crore of the total sanctioned for this project.

The disbursed ₹3,000 crore in April and May included ₹1,841.2 crore in equity contribution, ₹158.8 crore in sub-debt, and ₹1,000 crore as pass-through assistance to external lending agencies. This comes under the total project outlay of ₹8,445.8 crore that the Ministry of Housing and Urban Affairs has earmarked for the project in FY26.

According to a senior official from Chennai Metro Rail Limited (CMRL), the funding is released based on demands and not in fixed tranches. “The Centre had already released ₹5,400 crore before March 2025 after Phase 2 received formal clearance as a central sector scheme in October 2024,” the official said.

Phase 2 is one of the largest ongoing urban mobility infrastructure projects in the country, covering 118.9 km across three corridors. Reclassification of the scheme as a central sector scheme triggers direct government funding at the stage, a major milestone compared to earlier years when procedural delays hampered disbursal.

There is a persistent belief among officials that such dependable funding will relieve Tamil Nadu considerably as it forges ahead in its mass transit expansion plans.The substantial allocation also reflects the growing strategic importance of Chennai within India’s urban development narrative.

RTI petitioner Dayanand Krishnan, who has long tracked metro rail financing in Tamil Nadu, urged the Union government to act on pending proposals — including a new corridor from Chennai Airport to Kilambakkam and greenfield metro projects in Madurai and Coimbatore.

Breakdown of FY26 Release:

• ₹1,841.2 crore – Equity
• ₹158.8 crore – Subordinate Debt
• ₹1,000 crore – Assistance via external agencies

Total Released So Far to Tamil Nadu: ₹8,400 crore
Project Length: 118.9 km across 3 corridors