Hyderabad Metro Will Be Handed Over To Telangana Govt By March
Indian Railway Finance Corporation has come forward to provide the loan required for the acquisition, the terms of which will be disclosed by February 27.
Published : February 24, 2026 at 2:37 PM IST
Hyderabad: The Hyderabad Metro Rail project will come under the full purview of the state government from the public-private partnership (PPP) by March. The responsibility of paying the amount due to L&T and completing the process has been entrusted to the Committee of Secretaries, headed by the Chief Secretary.
Indian Railway Finance Corporation (IRFC) has come forward to provide the loan required for the acquisition, the terms of which will be disclosed by February 27. The government has already suggested that the state municipal administration department should hold talks with the Union Ministry of Urban Affairs for the sanction of Metro Rail Phase IIA and IIB and seek approval. The contract period of the Keolis company operating the Metro will end on November 27, 2026. Even after the acquisition is completed, Keolis will continue to operate it for a year.
The committee said that for the continuation of the second phase, the first phase should be completely under the control of the government, so that the company can survive. The Metro Rail Policy 2017, the Urban Affairs department regulations for Phase II permissions, international experiences in metro rail systems, management of projects under different ownership, passenger experiences, and long-term financial sustainability were taken into account.
The committee unanimously approved the acquisition of the entire stake in L&T Metro Rail. It said that the Phase II cost is likely to increase by 5% annually due to the delay in acquisition. On the other hand, the separation of ownership is not possible since L&T has not signed the definitive agreement. Hence, the equity in the company will be bought instead of the assets and business. At the same time, it identified debts, BTA provisions, Falaknuma corridor obstacles, and VGF dues from the Centre and submitted a report to the government to that extent.
The government has decided to expand the metro rail services in line with the growing population and expansion of the city. It has submitted proposals to the Centre for a 76.4 km route for Rs. 24,269 crore under Phase IIA and an 86.1 km route for Rs. 19,579 crore under Phase IIB. It has suggested that the Centre and states should bear the cost in the ratio of 50:50.
The special officer of the central urban development department raised several objections to these proposals. While Phase-II is being run under L&T, he questioned how the services of the Central and state governments will be managed in Phase-IIA and IIB and how the revenue would be divided.
Apart from this, in the July 2025 meeting, the L&T Metro MD proposed that the Central and state governments, along with L&T, form a special company to manage the construction of Phase II and Phase II. But they did not want to exclude Phase I from this agreement and asked for the high-interest debt of Rs 12,000 crore to be refinanced at a low interest rate.
Later, they wrote a letter to the Central and state governments explaining that they had exited the transportation business and had handed over their stake in L&T Infrastructure to Edelweiss in April 2024. It was also stated that there would be difficulties with the ownership of different companies. In this context, in the meeting held with the Chief Minister Revant Reddy, it was decided that the government would take over the Metro Rail from L&T.
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