Legacy issues cast shadow on Hyderabad Metro Rail phase II plans

The Congress government has been pressing for the last few months to get the Central government’s approval to form a Joint Venture (JV) to mobilize finance and secure compulsory clearances for the proposed Hyderabad Metro Rail (HMR) Phase II.

During his recent visit to New Delhi, Chief Minister A. Revanth Reddy reiterated his government’s commitment to the project. The official confirmed that the State government plans to take over the project from Larsen & Toubro (L&T) next month after completing the necessary financial and legal formalities.

Government-appointed consultants – IDBI Bank and Delhi Metro Rail Corporation (DMRC) – are currently examining the financial and technical aspects of the proposed acquisition from L&T, including outstanding debt of ₹ 13,000 crore and equity capital of ₹ 2,000 crore.

However, lingering issues from HMR Phase I, a 69.2 km network built along three corridors, may still pose challenges when the empowered committee comprising Central and State officials meet to examine modalities for approving the Detailed Project Report (DPR) for Phase II-A and II-B. According to official sources requesting anonymity, these phases cover 162 km along eight corridors at an estimated cost of ₹ 42,000 crore.

Of major concern is the 7.5km corridor between Mahatma Gandhi Bus Station (MGBS) and Chandrayangutta in the Old City, which is expected to come under closer scrutiny. Road widening along this route progressed without major resistance last year; Nearly 500 structures were cleared after payment of enhanced compensation, totaling more than ₹400 crore.

But the process was recently challenged in court, and officials acknowledge that the governing committee will look at construction plans with a critical eye along the way. The corridor forms part of Phase II-A, where Chandrayangutta is planned as an interchange station for the 36.6 km Nagole-Rajiv Gandhi International Airport (RGIA) line.

During the construction of HMR Phase I, the 11 km Green Line from Jubilee Bus Station (JBS) to Falaknuma was halted at MGBS due to AIMIM’s objections to heritage and religious structures on the route. This impasse led to the Center retaining ₹ 254 crore of the ₹ 1,458 crore Viability Gap Fund (VGF) sanctioned under the public, private partnership (PPP) model.

When the MGBS-Falaknuma line, for which a depot was initially planned in an area of ​​17 acres, did not materialise, L&T Metro Rail Hyderabad (L&TMRH) had to build a one kilometer link from the Green Line to the 29 km Blue Line (Nagole to Raidurg) along with a 224-metre viaduct at MGBS to connect the 29 km Red Line (LB Nagar to Miyapur). Green Line for operational flexibility. These connections were necessary for moving trains on the Green Line to depots in Miyapur or Nagole for maintenance.

The Old City tensions were further complicated when the previous BRS government signed an additional concession agreement with L&TMRH in July 2022, agreeing to provide an interest-free loan of ₹ 3,000 crore to help offset losses, including those incurred during the COVID shutdown. Despite releasing around ₹900 crore in phases, work on the contentious alignment did not progress with L&TMRH citing absence of ‘Right of Way’.

Meanwhile, Prime Minister Revanth Reddy revived the project soon after taking office and even laid the foundation stone of the project in March 2024 in the presence of Hyderabad MP Asaduddin Owaisi, giving the event a political dimension. The government provided funds for road widening and property acquisition, assuring that heritage and religious structures would not be affected by adopting innovative engineering solutions for the construction of upper viaducts and stations.

Officials say the unresolved Phase I episode could impact both the financial agreement with L&T and the Centre’s assessment while reviewing DPR and Phase II integration plans.