Hyderabad: Telangana chief secretary K Ramakrishna Rao on Tuesday, December 16, directed officials to complete the process of taking over the Hyderabad Metro Rail from L&T by the end of the current financial year (March 2026).
In a review meeting with the committee of secretaries and officials from L&T, the Telangana chief secretary emphasised that the transfer must be carried out in line with the agreement reached between both parties. The government earlier announced the takeover of the Hyderabad Metro rail as L&T said it was unable to continue operating it.
Ramakrishna Rao asked for planned actions be taken systematically over the next 100 days and urged the transaction advisor, IDBI Bank, to finalise its report at the earliest to facilitate the completion of the takeover. He also asked L&T to extend full cooperation in this process.
Following the takeover, Hyderabad Metro Rail Limited (HMRL) managing director Sarfaraz Ahmad has been directed to prepare proposals related to operations and maintenance.
Hyderabad Metro takeover
On September 25, L&T announced their departure from the Hyderabad metro project, with the state government taking over the existing phase one. The Telangana government will also take over the project’s debt, which stands at Rs 13,000 crore and agreed to pay about Rs 2,000 crore to L&T towards its equity investment as a one-time settlement.
The decision was taken after negotiations were held between both sides with an objective to expedite phase 2 of the metro rail for approval by the Government of India (GoI).
After the state government submitted proposals for the sanction of 8 lines as part of the phase 2A and 2B expansion for the Hyderabad Metro rail, the central had expressed concern over the fact that the proposed phase 2 was being executed by a government agency while phase 1 metro in Hyderabad is a private entity.
The Centre had then insisted on a definitive agreement with L&T for operational integration of phase 1 with the proposed phase 2 to process the proposal further.
They had also requested L&T Metro to participate in the phase 2 Hyderabad Metro rail project as a joint venture. However, in response, L&T conveyed that it will neither be able to participate in phase 2A and phase 2B as an equity partner nor sign the definitive agreement and expressed its willingness to offer their equity stake in LTMRHL to state or central government.
L&T also reportedly informed the Telangana government that it is unable to sign a definitive agreement for operational integration of phase 1 and phase 2 as it has major concerns regarding seamless train operations between the two phases and regarding revenue and cost-sharing mechanisms.
