Tamil Nadu set to buy out Indian Railways' 33% stake in Chennai MRTS

The Tamil Nadu government is preparing to purchase the Indian Railways’ 33 per cent stake in Chennai’s Mass Rapid Transit System (MRTS), giving the state full ownership of the network that has been part of the city’s skyline since 1995, sources aware of the development were cited as saying by the Business Standard.

The state already owns the remaining 67 per cent of the joint venture and the government for Chennai Metro Rail Ltd (CMRL) is expected to pay between Rs 600 crore and Rs 700 crore to acquire the Railways’ share. An MoU finalising the arrangement is likely to be signed later this month or in January, the sources said.

The company operates a 25-km line running from Chennai Beach to St Thomas Mount of the MRTS.

Sources cited by the Business Standard also said that the state is in discussions with the World Bank for around Rs 4,000 crore in funding to upgrade the MRTS and integrate it with CMRL. Industry experts say this would mark the first-ever rail-to-Metro takeover in India.

Senior Southern Railway officials, responding to queries on the condition of anonymity, said they granted formal approval for the transfer on July 31.

“The approval entails the transfer of all infrastructural assets of the MRTS,including tracks, bridges, signalling, electrification, land, and buildings, as well as the operations and maintenance of the MRTS services to CMRL, for which a detailed MoU is under preparation,” the official said, Business Standard reported.

A state government source described the deal as unprecedented. “Such a deal is happening for the first time in India. CMRL will run it according to the Metro standards and the entire revamp will take two years. By December 2027, we are planning to have a Metro model system in these old lines,” the source said.

The planned World Bank loan will help finance new coaches worth about Rs 1,000 crore, refurbishment of nearly 20 stations, installation of escalators, and development of surrounding infrastructure within a 500-metre radius. Enhancing last-mile connectivity is also part of the proposal. “Talks with the World Bank are ongoing,” a government source added.

Chennai MRTS was conceptualsied by DMK leader M Karunanidhi during his first tenure as chief minister in the 1970s and received formal sanction in 1984 under the AIADMK government led by MG Ramachandran. Services began in 1995.

The current push follows Chief Minister MK Stalin bringing up the issue with Prime Minister Narendra Modi at a NITI Aayog meeting in May 2025, which helped fast-track Railway approvals.

The transfer fits into the larger strategy laid out by the Chennai Unified Metropolitan Transport Authority (CUMTA), which aims to transform the city’s transit ecosystem and reduce peak travel times from up to 90 minutes to about 60 minutes by 2048. Of the Rs 2.27 trillion planned investment, Rs 1.92 trillion is dedicated to public transport.

“The move aligns with the public-centric vision of creating an upgraded, integrated, and sustainable urban rail transport ecosystem for the Chennai region and is a fine example of the synergy between the Railways and the Tamil Nadu government working in close coordination. The merger will provide seamless multimodal integration across Metro, MRTS, suburban rail networks, and bus services in Chennai,” said a Southern Railway official.