Future of Hyderabad Metro hangs in balance amid funding row

Despite the Telangana government taking over Hyderabad Metro Phase-I from L&T Metro Rail, at least on paper, its future hangs in the balance as the release of a Rs 13,600-crore refinancing loan has been delayed, with the issue now taking a political turn. Amid the blame game between the State and the Centre, L&T Metro Rail Hyderabad will continue operating the metro services until all formalities related to the takeover are completed.

On April 29, the Hyderabad Metro Rail Limited (HMRL) signed a Share Purchase Agreement with L&T Metro Rail Hyderabad to acquire 100 per cent equity shares for an equity value of Rs 1,461.47 crore. Subsequently, from May 1, the Telangana government assumed full control of the Hyderabad Metro and appointed a new board to oversee operations under State ownership.

While the takeover has been completed on paper, the financial



transaction is yet to be concluded. As part of the deal, the Telangana government also agreed to take over L&T’s debt of around Rs 13,000 crore. To facilitate the process, the State secured refinancing support of up to Rs 13,600 crore from the Indian Railway Finance Corporation (IRFC). An agreement to this effect was signed in New Delhi on May 25. The refinancing package carries a 20-year tenure with quarterly repayments.

However, in a significant development, Chief Minister A Revanth Reddy on Monday alleged that IRFC had withheld the release of the Rs 13,600-crore loan despite approvals being in place. According to him, the funds were scheduled to be released by June 15 but were delayed due to political reasons. The Chief Minister accused Union Minister G Kishan Reddy of creating hurdles and influencing the Union government to hold back the release of funds.