The Swargate-Katraj metro project in Pune has taken a significant step forward with the central government’s decision to fund its portion through equity shares rather than a traditional grant. The revised financial plan for this fully underground 5.5 km metro line, with an estimated cost of ₹2,954 crore, has received state government approval, moving the long-anticipated project closer to fruition.
Initially, the project was envisioned as an elevated metro line with a budget of ₹3,668.04 crore, receiving cabinet approval in April 2022. However, a subsequent revision, approved by the state’s urban development department, reduced the scope to a 5.464 km underground stretch across three stations. The Public Investment Board (PIB) had earlier recommended a grant model on January 18, 2024. But in a strategic shift on August 5, 2024, the central government opted for an equity shares model, marking a pivotal change in the project’s funding structure.
Under the new financial plan, the central government will contribute ₹300.63 crore through equity, complemented by a ₹97.83 crore share from the state government. Both governments will also provide interest-free loans to cover 50% of central and state government taxes (CGST and SGST), amounting to ₹115.52 crore each from the Centre and ₹206.58 crore from the state. Additionally, the Pune Municipal Corporation (PMC) will allocate ₹181.21 crore for land acquisition, rehabilitation, and interest during construction.
This revised financial participation plan was submitted to and approved by the state government. Subsequently, the central government requested adjustments to reflect the equity model, with final approval granted on August 7, 2024. With this financial framework in place, the Swargate-Katraj metro project is poised to proceed, awaiting only the union cabinet’s formal endorsement to begin implementation.Shravan Hardikar, managing director of the Maha-Metro, said, “Two years ago, we planned and sent a grant model for financing the Swargate to Katraj underground extension project. However, the central government has now decided to use an equity model. We sent the new equity finance proposal to the state government, which approved it. The state will now send it to the central government. In the grant model, ownership could change but with the equity model, the special purpose vehicle (SPV) which is Maha-Metro, will keep ownership.” “The Project Implementation Board (PIB) might call a meeting because the share percentage has changed from 10% to 20%. It is not yet clear if the project will go back to the PIB or directly to the finance department,” Hardikar said.
