G.O.Ms.No.16, Additional Subordinate Debt for Chennai Metro Rail Project, 2015
The Planning, Development and Special Initiatives (Special Initiatives) Department issued Government Order G.O.Ms.No.16 dated 3 February 2015, sanctioning an additional interest free subordinate debt of Rs.598.22 crores to Chennai Metro Rail Limited. The funding covers increased land costs and Rehabilitation and Resettlement expenditure for the Chennai Metro Rail Project during 2014 to 2015.
What the document does
Government Order G.O.Ms.No.16 of the Planning, Development and Special Initiatives (Special Initiatives) Department, dated 3 February 2015, approves Rs.598.22 crores as additional subordinate debt for Chennai Metro Rail Limited. Chennai Metro Rail Limited reported that its requirement for land and Rehabilitation and Resettlement had risen to Rs.2,205.14 crores as on 31 March 2014 because of increases in land value and land extent.
Chennai Metro Rail Limited had already incurred Rs.1,533.22 crores against an allocation of Rs.935 crores, leaving the stated shortfall of Rs.598.22 crores.
Funding arrangement
The approved funding pattern had provided:
- Rs.855 crores for land.
- Rs.80 crores for Rehabilitation and Resettlement.
- Rs.844 crores as interest free subordinate debt.
- Rs.91 crores as State Government equity for residual land costs.
The Memorandum of Understanding between the Government of India, Government of Tamil Nadu and Chennai Metro Rail Limited allowed the subordinate debt to be increased if the final land cost exceeded Rs.844 crores.
Key loan terms
The sanction contains the following terms:
- Borrower: Chennai Metro Rail Limited.
- Amount: Rs.598.22 crores.
- Purpose: land cost and Rehabilitation and Resettlement expenditure as on 31 March 2014 for project implementation during 2014 to 2015.
- Validity of sanction: up to 31 March 2015.
- Payment method: adjustment in the Public Deposit Account of Chennai Metro Rail Limited, rather than payment in cash.
- Interest: interest free.
- Repayment period: 10 years.
- Repayment frequency: semi annual.
- Moratorium: until repayment of the Japan International Cooperation Agency loan is completed.
- Repayment commencement: 2043 or when the senior debt is repaid, whichever is earlier.
Relevance to landowners and buyers
Government Order G.O.Ms.No.16 provides government financing for Chennai Metro Rail Project land costs and Rehabilitation and Resettlement expenses. It does not identify individual properties, landowners, acquisition proceedings or compensation amounts for any particular parcel. A buyer or owner therefore cannot use this document alone to determine whether a specific property is affected.
Financial approval process
The expenditure was classified as a new service and was to be placed before the Legislature through the Supplementary Estimate for 2014 to 2015. Pending legislative approval, it was to be met initially through a Contingency Fund Advance.
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Common questions
Does this document show that my property is being acquired for Chennai Metro Rail?
No individual property or acquisition proceeding is identified. The document only sanctions funding for Chennai Metro Rail Project land costs and Rehabilitation and Resettlement expenses.
How much additional funding was sanctioned?
The Government sanctioned Rs.598.22 crores as subordinate debt to Chennai Metro Rail Limited.
Was the sanctioned amount paid directly in cash?
No. The amount was to be credited by adjustment into the Public Deposit Account of Chennai Metro Rail Limited.
Does Chennai Metro Rail Limited have to pay interest on this loan?
No. The annexure describes it as an interest free loan, with a repayment period of 10 years.
