Hyderabad Metro Rail Phase-II hits a wall of clearances, turns into a waiting game

Hyderabad Metro Rail’s second phase appears increasingly entangled in a mix of legal hurdles, political undertones and bureaucratic delays. It has been over a month since the Congress government announced its bold move of taking over Phase-I — 69.2 km — from L&T for ₹15,000 crore. The Chief Secretary-led committee tasked with working out the takeover details has not even met so far.

Top officials on both sides admit it will be a long drawn legal process. At the heart of it lies the Concessionaire Agreement (CA) between L&T and the State government — a legal knot that will take time to untangle. Moreover, the fact that the project falls under the Central Metro Act, and the Centre had pitched in ₹1,200 crore under Viability Gap Funding (VGF) means their approval is required.

Meanwhile, Union Minister of Coal and Mines G. Kishan Reddy recently revealed another twist — the revised Detailed Project Report (DPR) for Phase-II comprising 76.4 km across five corridors, costing ₹26,264 crore hasn’t even reached the Union Ministry of Housing and Urban Affairs (MoHUA). This DPR is crucial to integrate Phase-I with the upcoming expansion, highlighting just how complicated the project has become.

Without Centre’s nod?

Despite this, the State government seems keen to push ahead with Phase-II, or at least parts of it, without waiting for the Centre’s mandatory clearances. Since a sovereign guarantee from the Centre is essential for low-interest funding from global lenders, the fallback plan is to borrow from commercial banks, sources claim.

Ironically, L&T Metro Rail Hyderabad (L&TMRH) has long complained that interest payments on its ₹11,000-crore SBI-led loan have been bleeding the company dry — a key reason for its exit, even though ridership and revenues have steadily improved over the years.

But officials insist that without a ‘proper’ DPR and the Centre’s nod, nothing can happen except foundation stones. “Clearances from Central ministries, including MoHUA and Railways, are critical because of interconnected designs, technology and safety issues,” said officials, who worked on Phase-I. And without the Commissioner of Railway Safety’s certification, metro trains simply cannot run.