HYDERABAD, SEPTEMBER 25, 2025:Â Hyderabad, which stood second in the country in 2014 in terms of the network length of metro rail, has now slipped to the 9th position in the country.
To meet the growing demand for public transport in Hyderabad and surrounding areas, the Government of Telangana has submitted proposals for sanction of 8 new metro lines as part of Phase 2A & 2B expansion, covering about 163 km of additional network. The Government of India has held multiple meetings to review these proposals. One of the key issues raised by the Government of India was the need for operational integration between the existing Phase 1 metro, developed under a private concession, and the proposed Phase 2 expansion under a government agency. To address this, the Government of India stressed on the requirement of a Definitive Agreement to ensure seamless operations and appropriate revenue/cost sharing. It was also suggested that L&T Metro could consider participation in Phase 2 as a joint venture partner with GoI and GoTG.
In this context, to resolve the deadlock that has existed since November 2024, Hon’ble Chief Minister A. Revanth Reddy convened a meeting today (Thursday) with the CMD of L&T Group, S.N. Subrahmanyan, along with senior L&T officers and top officials of the State Government, to deliberate on the way forward.
The Chief Minister underlined the State Government’s preference for L&T’s continued participation in Phase 2 expansion as an equity partner, so as to build upon the existing partnership. However, CMD L&T explained that the company has exited the business of ownership and operation of transportation concession assets and therefore would not be in a position to participate as an equity partner in the upcoming expansion.
The Chief Minister further emphasized the importance of finalising a Definitive Agreement for operational integration of Phase 1 and Phase 2 corridors. Such an agreement, as insisted upon by the Government of India, would provide clarity on seamless train operations and incorporate revenue and cost-sharing mechanisms, thereby enabling further processing of the Phase 2 proposal.
CMD L&T, while recognizing the importance of integration, expressed concerns regarding smooth train operations across the two phases and on issues of revenue and cost-sharing, and conveyed that they would not be able to sign the Definitive Agreement under the present circumstances.
As part of the discussions, and in order to facilitate the processing of the proposal by the Government of India, CMD L&T reiterated an alternative proposal to divest their complete stake in Phase 1 Metro to the State Government, which would enable Phase 1 to become a fully state-controlled entity.
Detailed deliberations were held on the financial aspects and asset valuation of the Phase 1 project. CMD L&T suggested that the State Government could take over the complete debt of LTMRHL and additionally pay about ₹5,900 crore for their equity value.
During negotiations, CMD L&T also referred to the Supplementary Concession Agreement signed on 22.07.2022, under which an amount of ₹2,100 crore is still due from the State Government out of the agreed ₹3,000 crore interest-free loan. After detailed discussions, and with the objective of expediting Government of India’s approval for Phase 2, it was agreed in principle that the State Government would take over the Phase 1 Metro Rail project by assuming the current debt of about ₹13,000 crore. In addition, the State Government would provide a one-time settlement of around ₹2,000 crore towards L&T’s equity investment in LTMRHL.
The terms and modalities of the takeover will be worked out through mutual discussions, ensuring compliance with all legal and statutory provisions, and in a manner that protects public interest while enabling early approval for the expansion.
Chief Secretary Sri K. Ramakrishna Rao; Advisor to Government of Telangana (Urban Transport) Sri N.V.S. Reddy; Prl. Finance Secretary Sri Sandeep Kumar Sultania; Secretary, MA&UD Sri K. Ilambarithi; MD, HMRL Sri Sarfaraz Ahmad; Prl. Secretary to CM V. Seshadri; and Secretary to CM K. Manicka Raj participated in the meeting from the Government side.
D.K. Sen, Advisor to CMD, L&T Group, and K.V.B. Reddy, MD & CEO, LTMRHL, attended the meeting along with the CMD of L&T Group.
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