The Telangana government has agreed in principle to acquire Phase 1 of the Hyderabad Metro Rail (HMR) from L&T Metro Rail Hyderabad (L&TMRH), marking the end of the public-private partnership (PPP) model for the project. The proposed ₹15,000-crore transaction includes a one-time payment of ₹2,100 crore to L&T for its equity and the government assuming responsibility for approximately ₹13,000 crore of project debt, officials confirmed.
The decision follows prolonged discussions between state officials and L&T representatives aimed at resolving operational and financial complexities, while clearing the path for the second phase of the metro network. The government intends to execute the takeover in a phased and legally compliant manner, ensuring smooth transition and continued service to commuters. Under the PPP arrangement, L&T had initially declined to participate in Phase 2 expansion due to concerns over revenue sharing, cost structures, and operational integration between the two phases. Subsequently, the company proposed divesting its entire stake in Phase 1, effectively converting the segment into a state-owned entity. Detailed negotiations addressed asset valuations, debt restructuring, and outstanding obligations under the Supplementary Concession Agreement, including pending equity payments and interest-free loans.
The Phase 1 acquisition is seen as a strategic step to secure approval from the central government for the ambitious Phase 2 expansion, which includes proposals for eight new lines spanning 163 km. Central authorities had expressed reservations about Phase 2 being executed by a government agency while Phase 1 remained under private management, making full state ownership essential for project continuity. Experts note that this move could enhance operational cohesion across Hyderabad’s metro network, allowing for better planning, integrated ticketing, and improved commuter experience. Officials emphasise that the acquisition aligns with the state’s vision of expanding sustainable and eco-friendly urban transport infrastructure while ensuring financial prudence and public accountability.
With this transition, Hyderabad Metro Phase 1 will join Phase 2 under unified government management, facilitating timely network expansion and addressing operational challenges previously raised under the PPP model. Analysts expect the change to streamline management processes, reduce bureaucratic delays, and improve service efficiency across the city’s metro corridors. Urban transport planners view the acquisition as a necessary evolution for one of India’s largest metro networks, reinforcing the state’s commitment to providing safe, reliable, and sustainable public transport options. Residents and commuters are anticipated to benefit from improved connectivity, timely service, and integrated metro operations once the full network expansion is operational.
Hyderabad Government To Acquire Metro Phase One From L&T For Fifteen Thousand Crore
