Legacy issues cast shadow on Hyderabad Metro Rail phase II plans

The Congress government has been pushing for the Central government’s approval to form a Joint Venture (JV) to mobilise funding and secure mandatory clearances for the proposed Hyderabad Metro Rail (HMR) Phase II over the past few months.

During his recent visit to New Delhi, Chief Minister A. Revanth Reddy reiterated his government’s commitment to the project. He confirmed that the State administration intends 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 takeover from L&T, including the outstanding debt of ₹13,000 crore and an equity of ₹2,000 crore.

However, legacy issues from HMR Phase I — a 69.2-km network built across three corridors — may still pose challenges when the empowered committee comprising officials from the Centre and the State meets to examine the modalities for clearing the Detailed Project Report (DPR) for Phase II-A and II-B. These phases cover 162 km across eight corridors at an estimated cost of ₹42,000 crore, according to official sources, who requested anonymity.

A key concern is the 7.5-km corridor between Mahatma Gandhi Bus Station (MGBS) and Chandrayangutta in the Old City, which is expected to face closer scrutiny. Road widening along this alignment has progressed over the past year without major resistance, with nearly 500 structures cleared after payment of enhanced compensation, totalling more than ₹400 crore.

However, the process was recently challenged in court, and officials acknowledge that the empowered committee is likely to take a critical view of construction plans along this stretch. The corridor forms part of Phase II-A, with Chandrayangutta planned as an interchange station for the 36.6-km Nagole–Rajiv Gandhi International Airport (RGIA) line.

Turning the clock, 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 objections from the AIMIM over heritage and religious structures along the route. This impasse led to the Centre withholding ₹254 crore of the sanctioned ₹1,458 crore Viability Gap Funding (VGF) under the public, private partnership (PPP) model.

Once the MGBS-Falaknuma stretch, where a depot was originally planned on a 17-acre site, did not materialise, L&T Metro Rail Hyderabad (L&TMRH) had to construct a one-kilometre link from the 29-km Blue Line (Nagole to Raidurg) to the Green Line, along with a 224-metre viaduct at MGBS to connect the 29-km Red Line (LB Nagar to Miyapur) with the Green Line for operational flexibility. These links were necessary to move trains on the Green Line to depots at Miyapur or Nagole for maintenance.

The Old City stretch became further complicated after the previous BRS government signed a supplementary concession agreement with L&TMRH in July 2022, agreeing to extend an interest-free loan of ₹3,000 crore to help offset losses, including those incurred during the COVID shutdown. Although about ₹900 crore was released in phases, work on the contentious alignment did not progress, with L&TMRH citing the absence of ‘Right of Way’.

Meanwhile, Chief Minister Revanth Reddy revived the project soon after assuming office and even laid the foundation stone for the stretch in March 2024, in the presence of Hyderabad MP Asaduddin Owaisi, adding a political edge to the event. The government released funds for road widening and properties acquisition with an assurance that the heritage and religious structures would not be affected by taking up innovative engineering solutions to build the overhead viaduct and stations.

Officials say the unresolved Phase I segment may influence both the financial settlement with L&T and the Centre’s assessment while reviewing the DPR and integration plans for Phase II.