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Hyderabad Metro

Rapid transit system in Hyderabad, India

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hyderabad metro rail
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Through Hyderabad, India and Public–private partnership

A 30-kilometre (19-mile) stretch from Miyapur to Nagole, with 24 stations, was inaugurated on 28 November 2017 by Prime Minister Narendra Modi. This was the longest rapid transit metro line opened in one go in India. It is estimated to cost ₹18,800 crore (US$2.0 billion). As of February 2020, about 490,000 people use the Metro per day. Trains are crowded during the morning and evening rush hours. A ladies only coach was introduced on all the trains from 7 May 2018. Post-COVID, 450,000 passengers were travelling on Hyderabad Metro daily on average by December 2022. On 3 July 2023, Hyderabad Metro Rail achieved a daily ridership of 0.51 million.

History

The Hyderabad Metro rail project was initiated by the NDA government in 2003. As Hyderabad continued to grow, the Multi-Modal Transport System (MMTS) had insufficient capacity for public transport, and the Union Ministry of Urban Development approved construction of the Hyderabad Metro rail project, directing the Delhi Metro Rail Corporation to conduct a survey of the proposed lines and to submit a Detailed Project Report (DPR). To meet rising public transport needs and mitigate growing road traffic in the twin cities of Hyderabad and Secunderabad, the state government and the South Central Railway jointly launched the MMTS in August 2003. The initial plan was for the Metro to connect with the existing MMTS to provide commuters with alternate modes of transport. Simultaneously, the proposals for taking up the construction of MMTS Phase II were also taken forward.

In 2007, N. V. S. Reddy was appointed managing director of Hyderabad Metro Rail Limited, and the same year, the Central Government approved financial assistance of ₹ 1639 crore under a Viability Gap Funding (VGF) scheme. The option of an underground metro system in Hyderabad was ruled out by L&T due to the presence of hard rocks, boulders and the topography of the soil in Hyderabad. Hyderabad Metro initially began under the Andhra Pradesh Municipal Tramways (Construction, Operation and Maintenance) Act, 2008, and later, it came under the Central Metro Act which permitted revision of fares. On 26 March 2018, the Government of Telangana announced that it would set up an SPV "Hyderabad Airport Metro Limited (HAML)", jointly promoted by HMRL and HMDA, to extend the Blue Line from Raidurg to Rajiv Gandhi International Airport, Shamshabad, under Phase II after the completion of Phase I in 2020.

Initial bidding

The bidding process was completed by July 2008 and awarded to Maytas, which failed to achieve financial closure for the project as per schedule by March 2009.

Re-bidding

The state government cancelled the contract and called for a fresh rebidding for the project. In the July 2010 rebidding process, Larsen & Toubro (L&T) emerged as the lowest bidder for the ₹121.32 billion (US$1.3 billion) project. L&T came forward to take up the work for about ₹14.58 billion (US$150 million) as viability gap funding as against the sanctioned ₹48.53 billion (US$500 million). The Bharatiya Janata Party government proactively pursued the project, but it was delayed due to separate state agitation and later due to the apprehensions of the new government. A consortium of 10 banks led by State Bank of India sanctioned the entire debt requirement of the Hyderabad Metro project, which was the largest fund tie-up in India for a non-power infrastructure public-private partnership (PPP) project at that time.

Ownership transfer

Following the inauguration of the first stretch of Hyderabad Metro in November 2017, L&T requested the state government to provide approximately ₹3,756 crore to address cost overruns and delays in site handovers. By February 2020, cumulative losses had reportedly exceeded ₹5,000 crore. This was further worsened due to the high-interest loans taken under the public–private partnership model contributing to financial strain. The COVID-19 pandemic further impacted operations, as prolonged shutdowns resulted in an additional loss of around ₹382 crore. In response, L&T sought a bailout of ₹3,000 crore from the government, of which ₹1,000 crore was approved. L&T was also forced to restructure the debt in an effort to reduce its losses. Despite a gradual recovery in ridership, annual losses continued to rise reaching ₹625.88 crores in FY2025. The company also criticized that the state’s free bus travel scheme for women could affect metro ridership, although the metro simultaneously recorded peak passenger numbers.

Soon after, L&T informed the state government that it would not participate in Phase‑2 of the Hyderabad Metro project. The central government stated that if L&T opted out of Phase‑2, the state government would need to integrate Phase‑1 with the new phase. The company rejected the revenue-sharing model proposed by the state and began exploring options to exit the project entirely. In response, the state government proposed acquiring L&T’s stake for ₹15,000 crore, comprising the transfer of ₹13,000 crore in outstanding loans and a ₹2,000 crore payout, or alternatively allowing L&T to sell its stake privately with the government matching the highest bid. L&T countered with a demand of ₹20,000 crore, reflecting ₹7,000 crore in equity and incurred losses. The government rejected this valuation, noting that L&T had already received a ₹900 crore soft loan from the government and ₹2,200 crore from real estate sales. After several months of negotiations, the two parties reached a final agreement for the government to acquire L&T’s stake for ₹15,000 crore, including the loan transfer and payout. Ownership transfer shall be finalized by the end of March 2026.

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