Mumbai, Jun 7 (IANS): In a major breather for the five million people of Pune, the Maharashtra government has given the green signal for the state's second Metro rail project after Mumbai here, a top official said.

"In the first phase, it will connect Ramwadi-Wanaz on an elevated track at a cost of Rs.2,593 crore," the official said after a late-night cabinet meeting Wednesday.

Thereafter, the second phase, around 44 km long, and costing Rs.5,391 crore will be taken up to connect Shivaji Nagar-Hinjewadi-Deccan-Bundgarden-Swargate-Katraj-Pimpri & Chinchwad-Nigdi, which are largely industrial areas.

The entire project is expected to be completed within five years, including three years for the construction alone.

The state has approved setting up of the Pune Metro Rail Corporation (PMRC), a special purpose vehicle (SPV) for the mega-project.

This is the biggest single project taken up in the state's academic and culture capital, around 250 km from Mumbai.

The Pune Municipal Corporation (PMC) has been appointed the nodal agency for implementing the BOT (build-operate-transfer) project till the SPV is set up.

The PMC had submitted the proposal to the state government last year for approval after getting a detailed project report from Delhi Metro Rail Corporation (DMRC), which had carried out a study in 2007.

Accordingly, the state and central governments will each contribute 20 percent towards the project, 10 percent from PMC and the remaining 50 percent through debt-equity.

The Pune Metro Rail is considered a political victory of sorts for the Sharad Pawar-led Nationalist Congress Party in its bastion, the western Maharashtra region.

The state government also gave an in-principle approval to a proposal for a third metro railway in the state to come up in Nagpur, the alternative capital.

The DMRC will carry out a detailed technical-feasibility study and submit its report to the state government by August 2012, after which a final decision will be taken.