Silence looms over Hyderabad Metro Rail Phase II despite Centre-State agreement on its joint venture and funding
It has been a month since the Centre and the Telangana government agreed to form a joint venture not only to take up the proposed
It has been a month since the Centre and the Telangana government agreed to form a joint venture not only to take up the proposed Hyderabad Metro Rail (HMR) Phase II project but also to devise a financial mechanism for acquiring the 69.2-km Phase I network from L&T Metro Rail Hyderabad. Union Ministers Manohar Lal Khattar (Housing and Urban Affairs), Ashwini Vaishnaw (Railways), G. Kishan Reddy (Coal and Mines) and Chief Minister A. Revanth Reddy were said to have arrived at an amicable formula to move the project forward. The understanding involved appointing SBI Caps to revalue the Phase I project and create a joint mechanism with officials from both governments to oversee the process. Since then, however, there has been silence. Apart from Mr. Revanth Reddy writing to Mr. Khattar seeking early appointment of a financial consultant and Mr. Kishan Reddy assuring that he would pursue the matter with his Cabinet colleague, there has been no indication of when the next steps will be taken.
Khattar’s recent written reply stating that the Centre had not approved any new metro rail project for Telangana may or may not signal the direction the issue is headed. Yet, the shifting of goalposts over the years have undoubtedly hampered metro rail expansion in Hyderabad. Successive State governments, first under the BRS and now the Congress, have made repeated attempts to secure approval for Metro Phase II. Proposals ranged from the 5-km LB Nagar-Nagole link and the Lakdikapul-Miyapur corridor to the Airport Metro line from Gachibowli. The present government has proposed seven routes spanning 122 km under Phase II-A and three additional routes under Phase II-B. However, none has moved beyond the approval stage in the past six years. “The Centre can raise questions on any aspect that may not have been addressed at the DPR (Detailed Project Report) stage.
States cannot build metro rail systems or railway lines without its approval. Accessing multilateral funding at concessional rates is also difficult without the Centre’s sovereign guarantee, which is why States seek joint ventures,” said a senior official, requesting anonymity. As a result, DPRs have undergone multiple revisions over concerns ranging from projected ridership figures and financial viability to disclosure of technical details. Additional issues emerged over HMR ownership structures for Phases I and II, proposals involving the Regional Rapid Transit System (RRTS), and eventually the Centre’s offer to partner in both phases. The proposal also included helping identify a funding agency if the State government chose to acquire Phase I and service the associated debt. Though the offer came after two public sector entities (IDBI & DMRC) had already valued HMR Phase I and the State had lined up funding for the acquisition, including ₹1,462 crore as equity, and almost pulled off a ₹15,527 crore loan from IRFC – Indian Railway Finance Corporation, it was seen as a breakthrough that finally brought the Centre and the State onto the same page.
The BriefWire