The decision, taken on Saturday night (4 April), followed the recommendations of an inter-ministerial committee that flagged multiple feasibility concerns.

These included non-compliance with the National Metro Rail Policy 2017, insufficient traffic demand and low ridership projections.

The cabinet noted that continuing the project in its existing form would have led to recurring annual operating losses.

Chief Secretary Anu Garg defended the move, saying, "This prudent step safeguards public resources while laying the foundation for a future-ready, regionally-integrated public transport system that aligns with the state's vision of Viksit Odisha by 2036."

The cabinet approved an expenditure of Rs 273.51 crore already incurred on the project up to December 2025 and authorised the inter-ministerial panel to examine any remaining liabilities for the Chief Minister's consideration.

Rather than dissolving it entirely, the government has decided to repurpose Bhubaneswar Metro Rail Corporation Limited (BMRCL) into a nodal agency for coordinating sustainable urban mobility initiatives across departments.

Going forward, Odisha plans to develop a Comprehensive Mobility Plan for the Bhubaneswar-Cuttack-Puri-Paradip Economic Region with technical assistance from the Asian Development Bank, focusing on transit-oriented development and multi-modal integration.

The metro project's Phase-I had originally been planned as a 26 km corridor between Biju Patnaik International Airport and Trisulia in Cuttack at an estimated cost of Rs 6,225 crore.

Opposition parties have attacked the decision. BJD MLA Ananta Narayan Jena warned it would worsen traffic congestion and hurt investment prospects in the state capital.

Congress MLA Tara Prasad Bahinipati accused the government of wasting public funds and denying residents the benefits of a rapid transit system.

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