Telangana govt to take over Hyderabad Metro from L&T

HYDERABAD: The Telangana government has decided in principle to take over the Hyderabad Metro Rail project from Larsen & Toubro Metro Rail (Hyderabad) Ltd (LTMRHL), ending months of deadlock over the Phase 2 expansion.

Chief minister A Revanth Reddy met L&T group chairman and managing director S N Subrahmanyan in Hyderabad on September 25 along with senior state officials to discuss the matter.

Officials said the state will assume LTMRHL’s outstanding debt of about ₹13,000 crore and make a one-time settlement of about ₹2,000 crore towards L&T’s equity investment.

L&T declines Phase 2 participation

The Centre had earlier raised concerns over operational integration between Phase 1, developed by L&T, and the proposed 163-km Phase 2 expansion to be built by the state. It insisted on a definitive agreement between both entities before clearing the project.

While the state urged L&T to participate in Phase 2 as an equity partner, the company reiterated its decision to exit ownership and operation of transport concession assets. Subrahmanyan said L&T would not sign the definitive agreement either, citing concerns over seamless operations and revenue-sharing.

Instead, L&T offered to divest its entire stake in LTMRHL to the state.

Settlement details being worked out

During negotiations, L&T initially suggested the government take over the project debt and pay about ₹5,900 crore for its equity. It also pointed out that the state still owed ₹2,100 crore from the ₹3,000 crore interest-free loan agreed in 2022.

However, after discussions, both sides agreed in principle on the ₹13,000 crore debt takeover plus ₹2,000 crore equity settlement. The finer terms will be finalised in the coming weeks, with officials stressing compliance with all legal and statutory requirements.

Chief secretary K Ramakrishna Rao, urban transport advisor NVS Reddy, principal finance secretary Sandeep Kumar Sultania, municipal administration and urban development secretary K Ilambarithi, HMRL managing director Sarfaraz Ahmad, and senior CMO officials attended the meeting.

From L&T’s side, advisor DK Sen and LTMRHL MD and CEO KVB Reddy joined Subrahmanyan.