Kochi: Uncertainty looms large over the Kochi Metro’s second phase project to construct a new metro line to the Kakkanad, the IT hub of the city, as the AFD, the French Development Bank, expressed its unwillingness to provide a loan for the project. Kochi Metro Rail Limited (KMRL) is exploring alternative options to mobilise funds for the project.

KMRL has come up with the clarification that the decision of AFD not to provide a loan for the project will not affect the project, the metro authorities can commence the construction works of the new line only after finding a new agency to fund the project.

KMRL has already held discussions with many funding agencies ready to provide loans for the project and submitted a list of the agencies to the Department of Economic Affairs (DEA) under the ministry of finance. But it is the union government to take a final decision on the funding agency.

It was in the first week of September that the union cabinet granted approval for the 11.2km long Phase II corridor of the Kochi Metro from JLN stadium to Infopark. KMRL had announced that the construction works of the new line would begin by the last week of January 2023. But the construction works are likely to be delayed as the decision regarding the funding is pending with GoI.

KMRL has clarified that AFD’s decision not to fund the project was taken months ago and the decision has nothing to do with the Kochi Metro Rail’s performance and was part of the agency’s policy to stop funding to all conventional metros across the country.

“Many agencies have expressed interest in providing funds for the project. We have short-listed some of them and submitted the list to state and union governments. It is the Department of Economic Affairs (DEA) under the ministry of finance to take a final decision on the funding agency. We expect that the decision would be taken within days”, said a spokesperson of KMRL.

Meanwhile, it is alleged that the indefinite delay of the take-off of the project mainly caused the decision of AFD to deny funds for the project. As per the project designed by the consultancy in 2017, the estimated cost of the project was Rs 2310 crore. But the urban affairs ministry revised the amount to Rs 1957 crore. It is learnt that after an evaluation by AFD, the project can be completed by spending an amount of at least Rs 3500 crore.

It was the AFD that provided the loan for the first phase of the Kochi Metro project. The estimated cost of the first phase was Rs 5181 crore. But the cost of the project escalated to Rs 7100 crore, when construction was completed.