The takeover of HMR Phase I has become critical for the state government as it could then approach the Center to push through the proposed Joint Venture (JV) for the 162-km Metro Phase II (A & B) across eight corridors in the National Capital Region. | Photo credit: File Photo
The Telangana government’s plan to take over the 69.2 km Phase I of Hyderabad Metro Rail (HMR) from PPP (Public-Private Partnership) concessionaire L&T Metro Rail Hyderabad (L&TMRH) may not have been finalized by the end of next month.
Although the state government announced its commitment to disburse ₹15,000 crore – ₹13,000 crore in debt and ₹2,000 crore in equity – to acquire the first phase across the highly trafficked Red (29 km, LB Nagar to Miyapur), Blue (29 km, Nagole, Nagole, Green Corridor) to Raid. L&TMRH, several gray areas remain.
To begin with, the two consultants appointed by the government’s special vehicle Hyderabad Metro Rail Limited (HMRL) have so far submitted only preliminary reports. IDBI Capital was 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), looked into the technical aspects of the project. Their final reports are expected in mid-March.
“The preliminary report is just that. The final reports may contain much more complex details. The government’s decision will depend on these findings. Both consultants are public sector entities of high repute, selected to ensure that the public interest remains paramount as thousands of crores of taxpayers’ money are involved,” senior official sources said, requesting anonymity.
The consultants were also asked to review the numerous short- and long-term contracts signed by L&TMRH to ensure that none of them became future legal hurdles.
On the technical side, DMIL’s preliminary findings are said to indicate that the government may need an infusion of up to ₹1,000 crore or more to offset attrition and maintain the current operational capacity without expanding HMR Phase-I. The agency examined rolling stock, propulsion and traction systems, CBTC technology (standards for communication-based train control), maintenance procedures, operational depots, warehouses.
Hyderabad Metro Rail | Photo credit: File photo
Meanwhile, the financial consultant appears to have arrived at a buyout value of ₹15,000 crore, reportedly admitting that he did not have access to the complete financial transaction records from L&TMRH since the inception of the project due to their voluminous nature at the time of filing the preliminary report, sources said.
It is not clear whether the report includes major transactions of the concessionaire such as the lease of the 15-acre Raidurg land worth ₹1,200 crore, the soft loan of ₹900 crore provided by the previous BRS government, revenue generated over the last eight years and other such details.
A committee of officials headed by Chief Secretary K. Ramakrishna Rao as well as a Cabinet sub-committee comprising Deputy Chief Minister Mallu Bhatti Vikramarka and Ministers D. Sridhar Babu and N. Uttam Kumar Reddy were informed of the news. However, it is not known whether these issues were discussed.
The final reports from both consultants will first be submitted to HMRL, which will present a consolidated report to a Cabinet sub-committee to determine the financial contours of the transaction. “Consultants have been appointed to conduct a thorough audit, so it would be presumptuous to take the ₹15,000 crore purchase as final without fully examining all the financial transactions and the technical status of HMR Phase I. The final outcome should be determined by the final audit reports,” sources said.
The takeover of HMR Phase I became critical for the state government as it could then approach the central government to push through the proposed joint venture (JV) for the 162 km Metro Phase II (A & B) across eight corridors in the National Capital Region, estimated at ₹42,000 crore.
This is due to the reluctance of L&TMRH to integrate Phase I of HMR with the proposed Phase II. It is also understood that the acquisition of 60 new Tube cars – a process initiated by HMRL and awaiting Government approval – can only continue after the takeover, when the Tube rail system becomes a fully state-run entity.
Published – 27 Feb 2026 22:30 IST
