Hyderabad: The Telangana government is closely studying the Maharashtra government’s handling of the Mumbai Metro Rail Phase-1 takeover process as it prepares for a similar exercise in Hyderabad.
Official sources said a high-level committee led by Chief Secretary K. Ramakrishna Rao is scheduled to visit Mumbai soon to meet Maharashtra government officials and examine the modalities adopted for the metro’s transfer from the private operator to state ownership. The study tour aims to help Telangana identify challenges and avoid the pitfalls that have delayed the Mumbai Metro takeover, sources added.
In Maharashtra, the state cabinet approved the takeover of Mumbai Metro Line-1 in March 2024 from Anil Ambani-led Reliance Infrastructure Limited (RInfra), which developed and operated the project under a public-private partnership (PPP) model.
The project, launched in 2014, had RInfra holding a 74 per cent stake and the Mumbai Metropolitan Region Development Authority (MMRDA) owning the remaining 26 per cent. However, the process has been delayed due to disputes over valuation and the heavy debt burden on both the company and the state agency.
Despite an approved offer of Rs 4,000 crore to acquire RInfra’s stake, the Maharashtra government has yet to complete the deal, reportedly because of fiscal constraints and disagreements with RInfra over the project’s valuation.
The Telangana government and L&T have only reached an in-principle agreement for the Hyderabad Metro takeover. The final terms and modalities still need to be worked out through mutual discussions to ensure legal and statutory compliance. The Telangana government is keen to learn from Mumbai’s experience before finalising the terms of the final agreement with L&T.
The Hyderabad Metro, also built under a PPP model with L&T, has an outstanding debt of about Rs 13,000 crore. The in-principle agreement reached between L&T and the Telangana government proposes assuming L&T’s current debt of Rs 13,000 crore and providing a one-time settlement of about Rs 2,000 crore for L&T’s equity investment.
Officials have cautioned that these liabilities will fall under the Fiscal Responsibility and Budget Management (FRBM) framework, potentially affecting the state’s borrowing capacity and credit limits.
The committee headed by the Chief Secretary is tasked with negotiating a financially-viable and legally-compliant structure for the Hyderabad Metro takeover. The government aims to ensure that the transfer of ownership — including payment of L&T’s equity and assumption of its loans — proceeds smoothly without triggering fiscal imbalances. Officials are also exploring the possibility of refinancing high-interest loans through international funding agencies at lower rates.
By analysing the hurdles that stalled the Mumbai Metro takeover — including valuation disputes, debt-servicing challenges, and policy reversals — Telangana hopes to craft a more transparent and financially sound roadmap for Hyderabad.
