Hyderabad: The proposed expansion of Hyderabad Metro Rail has run into fresh uncertainty, with the Centre and the Telangana government deciding to commission a new valuation of Phase I before moving ahead with Phase II, effectively pushing the long delayed project back to the review stage.
The fresh exercise will be carried out by SBI Capital Markets, which has been asked to reassess Phase I and examine plans for an expanded Phase II network of up to seven corridors covering 122 km. The move comes despite the State government having already signed an agreement last month for a proposed ₹13,527 crore loan from the Indian Railway Finance Corporation to take over Phase I and enable the next stage of metro expansion.
The latest decision has triggered uncertainty over the fate of the IRFC loan, with no official clarity yet on its disbursal, the timeline for the fresh valuation, or whether the earlier assessment reports cleared by the State government will now be reopened.
IRFC loan uncertainty clouds Hyderabad Metro expansion
Sources said the delay may be linked to differences between the Ministry of Railways and the Ministry of Housing and Urban Affairs over issuing a no objection certificate, a key requirement believed to be holding up the release of funds. Officials, however, have not made any formal statement on the issue.
The State government had earlier relied on valuation and technical reports prepared by public sector agencies, including IDBI Capital and DMRC International, to assess the financial and operational status of Hyderabad Metro Phase I. Based on those reports, the Telangana government and L&T had reportedly agreed on an equity contribution of around ₹1,462 crore, after which the IRFC funding proposal moved forward.
It now remains unclear whether SBI Capital Markets will simply review those findings or undertake a full reassessment of Phase I, including the financial structure, asset valuation and operational performance of the existing metro network.
The uncertainty is significant because Phase II cannot move forward in its current form unless the State government assumes control of Phase I from L&T. That takeover is central to the plan for seamless integration between the existing metro network and the proposed new corridors.
Senior officials from the Centre and the State are understood to have agreed on a joint oversight mechanism for the process. However, the latest development has effectively slowed momentum on the project, leaving Hyderabad Metro Phase II in limbo even after months of negotiations and financial planning.
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