The state government of Telangana formally took over Phase I of the Hyderabad Metro Rail project and its operations from Larsen & Toubro (L&T) on Wednesday. This strategic move paves the way for the state's ambitious plan to expand the metro network to areas including Shamshabad, Bharat Future City, and other parts of the state capital through a joint venture between the state and the central government.
The government acquired 100% of the shares held by L&T Metro Rail (Hyderabad) Ltd (LTMRHL) at an equity value of Rs 1,461.47 crore. An official stated, "Evaluation of projects of this magnitude would cost over Rs 25,000 crore. But the state negotiated a good deal." The share purchase agreement was executed with Larsen & Toubro Ltd and LTMRHL, signed by MD Sarfaraz Ahmed on behalf of HMRL, DK Sen on behalf of L&T Ltd, and KVB Reddy on behalf of LTMRHL.
The debt of LTMRHL, amounting to Rs 13,538.53 crore as of April 30—previously guaranteed by L&T—will now be refinanced with a guarantee from the Telangana government. The combined equity value of Rs 1,461.47 crore and debt of Rs 13,538.53 crore bring the total takeover value of the project to Rs 15,000 crore.
A senior official told TOI, "We are in talks to get the loan at a lower interest rate. Also, we are awaiting Phase II approvals from the Centre." The central government had insisted on a definitive agreement for operational integration between Phase I and Phase II before approving further expansion, making the takeover necessary.
The takeover will facilitate the expansion of Phase II over 162 kilometers. The Phase I network spans 69 kilometers. Proposals for Phase II expansion—covering 76.4 kilometers initially and another 86.1 kilometers later—have been submitted to the central government.
Chief Minister A Revanth Reddy stated that the state government took over the metro rail in the broader public interest and in response to increasing demands from various sections of society to extend the network to the Hyderabad Core Urban Region (CURE). Since the inception of the metro rail, approximately 86 crore passenger journeys have been recorded.
