L&T proposes Hyderabad Metro Phase 1 handover to Telangana Govt amid Phase 2 expansion plans

Hyderabad, India (Metro Rail Today): Hyderabad, India – In a significant development concerning India’s largest metro public-private partnership (PPP) initiative, Larsen & Toubro (L&T) has formally expressed its intention to hand over the 69.2 km Hyderabad Metro Phase-I network to the government. The move comes as the state prepares for the rollout of Hyderabad Metro Phase-II, raising operational and financial questions over managing the two phases seamlessly.

In a recent communication addressed to Union Housing and Urban Affairs Minister Manohar Lal Khattar, L&T cited ongoing financial losses as a primary reason for the proposed transfer of ownership and operations. The company urged the Central or Telangana State Government to take over Phase-I, which currently comprises three operational corridors and has been hailed as a landmark in India’s metro infrastructure landscape.

Operational and Financial Concerns

With Phase-II set to utilize the existing Phase-I infrastructure to provide seamless connectivity, L&T flagged significant challenges in areas such as:

• Fare-sharing mechanisms

• Electricity cost settlements

• Operational coordination between the two phases

According to sources, L&T warned that running Phase-I trains on Phase-II tracks—or vice versa—could create complex revenue-sharing and operational cost issues, unless a unified management structure is implemented. As a result, the company suggested that the government should either take over Phase-I or ensure the two systems operate independently.

Mrs. Mamta Shah, MD & CEO of Urban Infra Group, weighed in on the development:
“The Hyderabad Metro was a pioneering PPP model in India, but evolving financial and operational complexities now demand a reset. A government takeover could ensure long-term sustainability and integrated expansion aligned with public mobility goals.”

Centre Seeks Clarifications from Telangana

The Union Ministry of Housing and Urban Affairs has reportedly asked the Telangana government to provide detailed clarifications on the Phase-II Detailed Project Report (DPR), particularly on:

• Agreements with L&T regarding joint operations

• Cost-sharing and revenue models

• Unresolved Phase-I liabilities

The Centre has also posed questions to the state on how it plans to maintain seamless commuter experience across both phases without causing fare discrepancies or administrative overlap.

About Hyderabad Metro: Past and Future

Launched in 2017 and built under a PPP model with L&T Metro Rail Hyderabad Ltd (L&TMRHL), the Phase-I network includes:

• Corridor 1: Miyapur – LB Nagar

• Corridor 2: JBS – MGBS

• Corridor 3: Nagole – Raidurg

Together, they form one of India’s most modern and automated metro networks. However, low ridership during the COVID-19 pandemic, coupled with high capital costs and limited fare-box recovery, have pushed the project into sustained losses, prompting L&T’s decision.

Meanwhile, the Telangana government has proposed Phase-II extensions, including:

• Miyapur–Patancheru

• LB Nagar–Hayathnagar

• MGBS–Chandrayangutta

These extensions are critical for connecting Hyderabad’s fast-growing suburbs and reducing pressure on existing roads.

What’s Next?

As the ball is now in the government's court, the coming weeks are expected to determine whether:

• A takeover of Phase-I by the government will proceed

• A hybrid or restructured PPP model will be considered

• Or the two phases will be operated separately with distinct protocols

For Hyderabad Metro’s 4+ lakh daily commuters, a swift resolution will be essential to ensure that expansion does not come at the cost of service quality or fare shocks.