By L. Venkat Ram Reddy

Copyright deccanchronicle

Hyderabad: The state government on Thursday decided to take over the Hyderabad Metro Rail Phase-1 project from Larsen & Toubro (L&T), paving the way for faster execution of Phase-2. The decision, finalised at a high-level meeting chaired by Chief Minister A. Revanth Reddy, marks a significant shift in Hyderabad’s urban transport strategy.As part of the agreement, the state will absorb nearly Rs 13,000 crore of outstanding debt of L&T Metro Rail Hyderabad Ltd (LTMRHL) and make a one-time settlement of Rs 2,000 crore towards its equity investment. This will give the government complete ownership of Phase-1 and enable smoother clearance and implementation of the proposed Phase-2A and Phase-2B expansions.The move follows repeated objections from the Union government, which had insisted on operational integration between Phase-1, built under the public-private partnership (PPP) model, and the state-led Phase-2 network.L&T, which signed the Metro PPP concession in July 2009 in undivided Andhra Pradesh, launched Hyderabad Metro services in November 2017 after the formation of Telangana. Despite being billed as the world’s largest metro under the PPP model, the project ran into financial stress. Mounting losses, cost overruns, alignment changes, and the impact of the Covid-19 pandemic prompted the company to exit, offering to divest its 90 per cent stake in Phase-1 and opting out of Phase-2.L&T also reminded the government that under the Supplementary Concession Agreement of July 2022, Rs 2,100 crore was still due out of a sanctioned Rs 3,000 crore interest-free loan. Nevertheless, both sides agreed to a settlement plan that would ensure legal compliance while protecting public interest.Thursday’s meeting was attended by Chief Secretary K. Ramakrishna Rao, transport adviser N.V.S. Reddy, finance secretary Sandeep Kumar Sultania, MA&UD secretary K. Ilambarithi, HMRL managing director Sarfaraz Ahmad, and senior officials from the Chief Minister’s Office. Hyderabad, once ranked second in the country for Metro Rail network length in 2014, has now slipped to ninth position. The state has already submitted proposals for eight new corridors spanning 163 km under Phase-2A and Phase-2B to the Centre. Officials are hopeful that with Phase-1 under government control, approvals for the expansion will be expedited.Chief Minister Revanth Reddy emphasised that seamless integration of both phases was essential for efficient operations, revenue sharing, and passenger convenience. He said the takeover would help remove procedural hurdles, secure quicker clearances from the Centre, and restore Hyderabad’s status as a leading metro hub.L&T was represented by Group CMD S.N. Subrahmanyan, Advisor D.K. Sen, and LTMRHL MD & CEO K.V.B. Reddy. During deliberations, the company reiterated its position that it had exited the business of owning and operating transport concessions and could not participate as an equity partner in Phase-2.