New Delhi, (Agencies):"The DMRC is in the process of finalising the funding pattern of the Delhi Metro's third phase which will be launched in the Union Budget on February 28," they said.

There will be a provision for a portion of the Centre's equity investment in Delhi Metro's third phase expansion in 2011-12. The Delhi Metro has already initiated the process of finalising the funding pattern with the Planning Commission.

The third phase is likely to cover 105 km distance taking the total network by Delhi Metro to over 300 km.

The decision on the funding pattern, which has been a contentious issue, is taking time. Earlier this week the Delhi Metro had made detailed presentation on Phase-III project to the Planning Commission.

While the Planning Commission wants the debt equity ratio to be increased to 50:50, sources said the Delhi Metro has expressed its reservations against such high equity investments by the Delhi and central governments.

Sources said the Delhi Metro has proposed a debt equity ratio of 40:60 under which the two governments will contribute 20 per cent each and the rest to be raised by loans from agencies like Japan International Cooperation Agency (JICA).

It is likely that a consensus can be achieved a debt equity ration of 40:60 per cent. The ration for first and second phase of Delhi Metro was 70:30 per cent.

The Delhi Metro has proposed for six corridors under the Phase-III plan to the Commission. However, so far there is a the broad agreement on four corridors proposed by the Delhi Metro in its third phase.

The Delhi government gave its in-principle approval to the project in October and asked the DMRC to rework on three corridors so that ring road and areas like Jamia Nagar be connected through the Metro.

The DPR was prepared by the DMRC last month after which it has been decided to extend the Phase-III network to 105 km.

Lending agency JICA has also given positive indications to extend financial assistance to the project.

JICA has funded the Phase-I and Phase-II of the Delhi Metro and is also funding other Metro projects in the country.

The Phase-III is likely to be implemented at a cost of Rs 28,000 crore.

The Delhi government has been trying to get the Delhi DDA to partly fund Phase-III but the efforts are understood to have failed.

The Planning Commission was also of the view that DDA should partly fund Phase-III so that the debt equity ratio can be reduced to 50:50.