Hurdle cleared for Delhi Metro Phase IV, Kejriwal ready to share tax burden with Centre

At a meeting held on Monday, Delhi chief minister Arvind Kejriwal reportedly told the ministers that ‘it should not look like that the state government is delaying the project’ and asked them to prepare another proposal sharing the tax burden.

Expediting the process of clearing the funding mechanism for metro Phase IV project, the Delhi government is going to prepare a cabinet note agreeing to the payment pattern as stated by the Centre.

Chief minister Arvind Kejriwal held a meeting on Monday evening at his residence where the issue was discussed.(Sonu Mehta/HT PHOTO)

The move comes a day after Hindustan Times highlighted that differences over funding of the 104km project between the Centre and the Aam Aadmi Party government could delay construction of six new metro corridors.

Speaking to HT, transport minister Kailash Gahlot said, “There won’t be any delay in the phase IV project. We are taking it to the cabinet and most likely it will be cleared.”

Sources said, chief minister Arvind Kejriwal held a meeting on Monday evening at his residence where the issue was discussed. The transport department has now been asked to prepare a fresh cabinet note accepting that the city government is ready to pay the 50% Central taxes as subordinate debt which amounts to ₹3,098 crore.

“Following the news report, the CM made it clear that it should not look like the metro project is getting delayed because of the AAP government. As other states are following the same framework on equity, the government is going to accept it too,” a source said.

While approving the Rs 50,000-crore project in January, the city government had sought exemption from paying its share of the subordinate debt for central taxes. Or, it wanted Delhi’s share of state taxes for the project (₹2121 crore) written off.

A subordinated debt is a loan or security. The Centre and state equally share the taxes to be paid for loans from foreign institutions for Metro projects. That means each of them will pay Rs 3,098 crore in Delhi’s case.

However, the demand was rejected by Union urban development minister M Venkaiah Naidu in a letter written to the CM on June 8.

The disagreement between the Centre and AAP government could escalate costs as contractors working on Phase III project, which is nearing completion, will “wind up their workforce and machinery”.

“Engaging fresh teams could take six months more, thereby delaying initiation of the Phase IV project,” a Metro official said.