The Hyderabad Metro Rail, a cornerstone of the city’s public transport infrastructure since its partial launch in 2017, is undergoing a significant ownership shift as the Telangana government assumes full control of Phase 1 operations from Larsen & Toubro (L&T). This move, finalized in late September, comes at a time when the system grapples with financial strains, rising passenger demands, and emerging safety issues, even as plans for Phase 2 extensions gain momentum.
Under the agreement, the state will absorb approximately ₹13,000 crore in project debt and provide L&T with a ₹2,000 crore settlement for its equity stake, marking the end of the public-private partnership (PPP) model that underpinned the project’s initial development. L&T, which invested around ₹5,900 crore, cited cumulative losses exceeding ₹6,000 crore, operational challenges, and delays in promised financial support as reasons for its exit. The handover is expected to be complete by the end of the fiscal year 2025-26, allowing the government to streamline integration with upcoming Phase 2 lines.
Phase 1 of the metro spans 69.2 km across three elevated corridors—Red, Blue, and Green—connecting key areas from Miyapur to Nagole, JBS Parade Ground to Raidurg, and Nagole to Rajiv Gandhi International Airport. It serves nearly 500,000 passengers daily, contributing to reduced traffic congestion and lower CO2 emissions in a city plagued by urban sprawl. However, the system’s growth has been hampered by capacity constraints, with calls for additional coaches to meet peak-hour demands.
The PPP framework, once hailed as the world’s largest in urban rail transit, has drawn criticism for its structural flaws. Experts have argued that entrusting such capital-intensive public goods to private entities risks prolonged gestation periods and fiscal imbalances. In Hyderabad’s case, integration issues between Phase 1 and 2 stations, coupled with unmet viability gap funding from the central government, exacerbated L&T’s financial woes. The Telangana government’s intervention is seen as a pragmatic step to safeguard operations, though it adds to the state’s debt burden at a time of fiscal tightening.
On the expansion front, the state cabinet approved Phase 2B in June 2025, encompassing 86 km across three new corridors at an estimated cost of ₹19,579 crore. This includes key routes such as the 7.1 km Corridor VIII from LB Nagar to Hayathnagar, aimed at easing suburban commutes. The proposal has been forwarded to the Centre for approval, with assurances of continuity in funding despite earlier budget delays. Construction on select segments, including a novel double-decker flyover near Madinaguda, is slated to begin by late 2025, potentially serving 800,000 additional daily riders.
Yet, these developments are overshadowed by persistent challenges. A recent study highlighted safety gaps for women commuters, with only 11% reporting harassment incidents but widespread unawareness of tools like the T-SAFE app. Nighttime travel remains a concern, prompting calls for enhanced lighting, CCTV coverage, and dedicated patrols. Operational costs have also surged, driven by maintenance, women-only coaches, and concessions for seniors, leading to discussions on fare hikes despite public resistance.
Adding to the mix, Hyderabad Metro authorities issued a reminder on October 2 about RBI regulations prohibiting passengers from carrying cash exceeding ₹2 lakh, with non-compliance resulting in denied boarding—a measure aimed at curbing money laundering but likely to inconvenience legitimate travelers. Separately, the system recently facilitated a life-saving green corridor for a heart transplant, underscoring its role in emergency logistics.
As Hyderabad positions itself as a global IT hub, the metro’s evolution under state stewardship will be closely watched. Chief Minister A. Revanth Reddy has emphasized seamless integration with broader urban renewal efforts, including the Musi Riverfront project and net-zero city ambitions. Critics, however, urge transparency in debt management and equitable fare policies to ensure the network remains accessible to all sections of society.
With Phase 2 approvals pending and daily ridership on the rise, the coming months will test the government’s ability to balance fiscal realities with the pressing need for sustainable mobility in one of India’s fastest-growing urban centers.
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Last Updated on: Friday, October 3, 2025 2:19 pm by Republic Business Team | Published by: Republic Business Team on Friday, October 3, 2025 2:19 pm | News Categories: News, India
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