Hyderabad Metro Expansion: Telangana CM Holds Meetings With Union Railway and Urban Development Ministers

Hyderabad: Telangana Chief Minister Revanth Reddy's two-day discussions with Union Ministers in Delhi regarding the acquisition and expansion of the Hyderabad Metro Rail have reportedly been fruitful.

Among others, the meeting's significant outcome was the decision to appoint SBI Caps as a consultant. SBI Caps will give a detailed report covering valuation, loan procurement for Phase-1 acquisition and expansion, construction costs, and financing for Phase-2. A coordination committee comprising officials from the Central and State governments has been formed to expedite the resolution of issues regarding Metro Phase-1 and Phase-2.

On Monday evening in Delhi, Reddy and Union Minister for Coal and Mines Kishan Reddy discussed the Metro acquisition and expansion with Railway Minister Ashwini Vaishnaw. On Tuesday, both leaders met Union Minister for Housing and Urban Affairs Manohar Lal Khattar. Ashwini Vaishnaw was also present.

The Chief Minister held these meetings to resolve hurdles regarding Metro Phase-1 acquisition and Phase-2 expansion. A source said a consensus was reached on several issues during these discussions.

The government's efforts to expand the metro network from Phase -1 to Phase 2 have faced numerous hurdles from the very beginning. Nevertheless, the Chief Minister has remained steadfast in attempting to overcome these obstacles.

L&T, which constructed Phase 1, incurred losses due to various factors, including delays in completing Metro Phase-1 and the impact of COVID-19. The Chief Minister himself stated that L&T reported an annual loss exceeding ₹400 crore, despite having created assets worth approximately ₹30,000 crore.

Consequently, L&T did not come forward to undertake the construction and operation of the Metro's second phase. Faced with this situation, the state government was compelled to acquire Metro Phase-1 from L&T for ₹15,000 crore. As a result, both the operation of Phase-1 and the construction and operation of Phase-2 came under the state government's control.

L&T had originally secured a loan of ₹13,600 crore from banks at an interest rate of 8.25% for the Metro project. The Chief Minister requested the Centre to facilitate the transfer of this loan to the state government. He successfully arranged for the Indian Railway Finance Corporation (IRFC) to act as an intermediary, securing loans at a lower interest rate.

A Japanese entity provided ₹13,600 crore in funds at 4% interest, which were subsequently transferred to the IRFC. The state government also paid its share of ₹1,400 crore. However, when the IRFC did not release the funds at this stage, the CM lashed out, alleging that Union Minister Kishan Reddy was obstructing the process. The Chief Minister also wrote a letter to Kishan Reddy after the latter dismissed the CM's allegation.

"You should take the initiative to resolve this issue and arrange a meeting with the Railway Minister at the earliest. I am ready to attend the meeting with the relevant agreements and supporting documents to provide necessary explanations," Revanth Reddy stated in his letter.

In light of this, Kishan Reddy took the initiative to facilitate discussions with the concerned Union Ministers.

Key Decisions:

'SBI Caps' will conduct a comprehensive study on various aspects, including the valuation of Metro Phase-1 and the expansion for Phase-2. Future actions will depend on the report the organisation submits. An official from the Central Government and the Special Secretary of the Municipal Administration and Urban Development Department (representing the State Government) will serve as the coordination representatives.

Kishan Reddy stated that positive discussions regarding the Hyderabad Metro occurred in Delhi with the Railway and Urban Development Ministers. "Chief Minister Revanth Reddy had written letters twice requesting a meeting with the Railway Minister. I arranged meetings with the Union Ministers over the past two days and participated in them alongside CM Revanth Reddy. As Telangana's representative in the Union Cabinet, I will always strive for the state's development and public welfare," he said on X.