Hyderabad: In a significant boost to Hyderabad Metro expansion, the Telangana government has agreed in principle to take over Phase 1 of the Metro Rail project from L&T. The move clears the way for Government of India approval for Phase 2.
CM convenes meeting with L&T leadership
Chief Minister A. Revanth Reddy held a high-level meeting on Thursday with L&T Group CMD S.N. Subrahmanyan, senior executives, and state officials. The talks aimed to resolve the deadlock that has stalled Metro progress since November 2024.
To address concerns raised by the Centre, the CM stressed the importance of a Definitive Agreement. This agreement would integrate Phase 1 and Phase 2, ensuring seamless train operations and setting rules for revenue and cost-sharing.
L&T offers full stake exit
L&T told the government it has exited the business of operating transport concessions. The company said it cannot join as an equity partner in Phase 2. Instead, it proposed divesting its entire stake in Phase 1 to the State Government.
After discussions, the state agreed in principle to take over ₹13,000 crore in LTMRHL debt. It will also make a one-time payment of ₹2,000 crore towards L&T’s equity. This takeover would make Hyderabad Metro a fully state-controlled network, addressing the Centre’s conditions for Phase 2 approval.
Pending commitments and next steps
L&T also referred to the 2022 Supplementary Concession Agreement. Under that deal, ₹2,100 crore is still pending from the ₹3,000 crore interest-free loan promised by the state.
The takeover terms will be worked out in upcoming meetings. Officials said the plan will comply with legal requirements and safeguard public interest while expediting Phase 2 clearance.
Officials present
From the Telangana side, Chief Secretary K. Ramakrishna Rao, Urban Transport Advisor N.V.S. Reddy, Principal Finance Secretary Sandeep Kumar Sultania, MA&UD Secretary K. Ilambarithi, HMRL MD Sarfaraz Ahmad, and senior officials from the CM’s office attended.
Representing L&T were CMD S.N. Subrahmanyan, Advisor D.K. Sen, and LTMRHL MD & CEO K.V.B. Reddy.