Last week, infrastructure giant Larsen and Turbo ( L&T) has formally requested to exit the high-profile Hyderabad Metro Rail Project due financial losses and to lack of support from the Telangana government. The company in writing said it was open to selling more than 90% equity stake to either the state or central government through a new Special Purpose Vehicle (SPV). The proposal includes the transfer of operations and maintenance of Phase I, along with the planned Phase II-A and Phase II-B corridors. Despite Telengana government’s request, L&T remained firm on its stance with no headway appeared possible in the near future.
According to latest reports, Telangana government led by Chief Minister Revanth Reddy has agreed to take over Phase-I of Hyderabad Metro Rail project from L&T Group by paying Rs 2,000 crore for the equity in the concessionaire L&T Metro Rail Hyderabad Ltd, official sources said on Thursday. The decision was taken after a meeting between CM along with senior officials of the state government and L&T group CMD S N Subrahmanyan today evening.
After detailed negotiations, with an objective to expedite the phase 2 approval by GoI, it was agreed in principle that the State government would take over Phase-I Metro Rail project by taking over the debt of the project, which now stands at about Rs 13,000 cr. Further, the state government will pay about Rs 2,100 cr to L&T towards their equity investment in LTMRHL as a one-time settlement.
L&T requested the government to take over its ₹5,900 crore debt for the equity value and referred to the Supplementary Concession Agreement signed on July 22, 2022, under which the government still owes ₹2,100 crore out of a ₹3,000 crore interest-free loan. After extensive negotiations, both parties agreed to proceed with the settlement to expedite HMR Phase 2 approval by the Centre. The State government has submitted proposals for eight new metro lines under Phase 2A and 2B totalling 163 km of additional network.
Chief Secretary K Ramakrishna Rao, Advisor to Government of Telangana (Urban Transport) NVS Reddy, Principal Finance Secretary Sandeep Kumar Sultania, MA&UD Secretary K Ilambarithi, and others were present, along with KVB Reddy, MD and CEO of LTMRHL
