Kochi: The Kochi Metro’s Phase 2 expansion has hit a roadblock as the Kerala state government continues to delay approval for a foreign loan required to fund the project. The loan is to be secured from the Asian Infrastructure Investment Bank (AIIB), headquartered in Beijing, but despite getting clearance from the Kochi Metro Rail Limited (KMRL) board, the proposal has been pending with the state for over six months with no action.

Sources indicate that the delay stems from the government’s concern that the loan might be classified as a public debt under the state’s financial obligations by the Centre, a potential risk that has made the administration hesitant to give a green light.

The loan is intended to fund the second phase of the metro expansion, covering the Kaloor Jawaharlal Nehru Stadium to Kakkanad stretch, with preliminary procedures starting as early as 2023.

Initially, the French Development Agency (AFD), which had provided funds for Phase 1, had also expressed willingness to fund the Kakkanad route. However, delays in launching construction caused them to withdraw support, shifting the burden entirely onto AIIB.

The total estimated cost of construction stands at ₹1,957 crore, of which around ₹1,056 crore is expected to come through the AIIB loan. Earlier projections suggested the funds would be received by March 2025, but with no state approval, disbursement has not progressed.

Currently, construction is being carried out using the state’s share of funds, but officials warn that further delay in the loan process could push the entire project into crisis. The Phase 2 corridor spans 11.2 kilometers and is seen as critical for connecting the city’s IT and business hubs.