Transition to Government Control: In a landmark decision chaired by Chief Minister Revanth Reddy, the Telangana Cabinet has approved the complete takeover of Hyderabad Metro Phase-1 from L&T. The government aims to finalize this transition by the end of the current financial year, specifically by March 31, 2026. This move follows the review of financial reports provided by IDBI and technical evaluations from the Delhi Metro Rail Corporation (DMRC), marking a significant shift from a public-private partnership to a fully state-owned enterprise.
Strategic Reasons for the Move: The decision is primarily driven by the need to resolve financial and technical hurdles. L&T has been facing a significant financial burden, and the private ownership of Phase-1 has complicated the process of securing central government funds and permissions for Phase-2 expansion. By bringing the project entirely under state control, the government intends to bypass these bureaucratic delays, streamline the expansion of the metro network, and implement new strategies to make the system more profitable.
Financial Settlement and Future Outlook: As part of the takeover agreement, the Telangana government will assume approximately 13,000 crore in loans currently held by L&T. Additionally, a one-time settlement of approximately 2,000 crore will be paid to the company as compensation for its investments. Once the process is complete, Hyderabad Metro Rail Limited (HMRL) will become a full-fledged Public Sector Undertaking (PSU). This status will allow the state to secure loans from international financial institutions at lower interest rates and better utilize metro assets to generate additional revenue.
