The takeover of HMR Phase I has become critical for the State government, as it could then approach the Centre to push forward the proposed Joint Venture (JV) for the 162-km Metro Phase II (A & B) across eight corridors in the capital region.
| Photo Credit: File Photo
The last word may not have been spoken on the Telangana government’s plan to take over the 69.2‑km Phase I of the Hyderabad Metro Rail (HMR) from the PPP (Public–Private Partnership) concessionaire L&T Metro Rail Hyderabad (L&TMRH) by the end of next month.
Though the State government has announced its commitment to a ₹15,000‑crore payout — ₹13,000 crore towards debt and ₹2,000 crore in equity — to acquire the first phase across the high‑traffic Red (29 km, LB Nagar to Miyapur), Blue (29 km, Nagole to Raidurg), and Green (11 km, JBS to MGBS) corridors from L&TMRH, several grey areas remain.
To begin with, the two consultants appointed by the government’s special-purpose vehicle, Hyderabad Metro Rail Limited (HMRL), have so far submitted only preliminary reports. IDBI Capital has been tasked with conducting a non-technical sovereign audit of the financial and accounting aspects of HMR Phase I, while Delhi Metro International Limited (DMIL), a subsidiary of Delhi Metro Rail Corporation (DMRC), has been examining the technical aspects of the project. Their final reports are expected by mid-March.
“A preliminary report is just that. The final reports may contain far more intricate details. The government’s decision will depend on these findings. Both consultants are public-sector entities of high repute, chosen to ensure that public interest remains paramount since thousands of crores of taxpayers’ money is involved,” top official sources said, requesting anonymity.
The consultants have also been asked to examine the numerous short- and long-term contracts signed by L&TMRH to ensure none become future legal hurdles.
On the technical side, DMIL’s preliminary findings reportedly indicate that the government may need to infuse up to ₹1,000 crore or more to compensate for wear and tear and maintain the current operating capacity without expanding HMR Phase I. The agency has been examining the rolling stock, power-traction systems, CBTC (Communication-Based Train Control) technology, depots, stations, maintenance practices, safety standards, and other operational components.
Hyderabad Metro Rail
| Photo Credit:
File photo
Meanwhile, the financial consultant appears to have arrived at the ₹15,000-crore buyout figure while reportedly admitting that it could not access complete financial transaction records from L&TMRH since the project’s inception due to their voluminous nature by the time the preliminary report was filed, the sources said.
It is unclear whether the report accounts for major transactions of the concessionaire, such as the 15-acre Raidurg land lease valued at ₹1,200 crore, the ₹900-crore soft loan extended by the previous BRS government, revenues generated over the last eight years, and other such details.
The officials’ committee headed by Chief Secretary K. Ramakrishna Rao was briefed on these reports, as was the Cabinet Sub-Committee comprising Deputy Chief Minister Mallu Bhatti Vikramarka and Ministers D. Sridhar Babu and N. Uttam Kumar Reddy. However, it is not known whether these issues were discussed.
The final reports of both consultants will first be submitted to HMRL, which will present a consolidated report to the Cabinet Sub-Committee to determine the financial contours of the deal. “The consultants have been appointed to conduct a thorough audit, so it would be presumptuous to treat the ₹15,000-crore buyout figure as final without fully examining all financial transactions and the technical condition of HMR Phase I. The completed audit reports should determine the final outcome,” the sources said.
The takeover of HMR Phase I has become critical for the State government, as it could then approach the Central government to push forward the proposed Joint Venture (JV) for the 162-km Metro Phase II (A & B) across eight corridors in the capital region, estimated at ₹42,000 crore.
This follows L&TMRH’s unwillingness to integrate HMR Phase I with the proposed Phase II. It is also evident that the procurement of 60 new metro coaches — a process initiated by HMRL and pending government approval — can proceed only after the takeover, when the metro rail system becomes a fully government-run entity.
Published – February 27, 2026 10:30 pm IST
