Hyderabad Metro Rail takeover by Telangana government takes a curious turn

The Hyderabad Metro Rail (HMR) takeover by Telangana government from L&T Metro has taken a curious turn, with the government taking up the process of Metro Phase – I valuation despite completing the exercise last year.

Interestingly, the government has now appointed SBICAPS as consultant to take up asset valuation, raise loans required for takeover and select lending agencies.

All this was done after the State government earlier engaged IDBI Capital for financial and legal due diligence and Delhi Metro Rail’s consultancy arm for a technical review. Subsequently, based on the recommendations of the IDBI Capital, the value of Metro Phase I assets was estimated to be between Rs 20,544 crore and Rs 22,102 crore.

The government has not explained what will happen to the upfront fee of Rs 84 crore it paid for the release of the first tranche of loan. This was done as per the terms stipulated by IRFC.

The statement merely said the consultant will study the valuation of



Hyderabad Metro Phase-I, raise loans required for takeover, and select lending agencies. This apart, a study will also be taken up on Metro Rail expansion, construction cost, and financing for Metro Phase-II.

The SBICAPS will conduct a comprehensive study on the valuation of Metro Rail Phase-I, expansion of Phase-II, and related matters. The State government and the Centre will decide the future course of action based on the report submitted by the consultant, the CMO press release said.

This assertion suggests that both the Metro takeover process and plans for Metro Phase-II may be returning to the starting point.

The Chief Minister and Union Ministers also agreed to appoint a senior official from the Union government and Special Chief Secretary of State Municipal Administration and Urban Development (MA&UD) Department as representatives for coordination during the study by the consultant. The two officials will work in coordination to facilitate the speedy completion of the study and official process.