Metro Phase-II Cost Escalates By Rs.1,915cr Due To Delayed Approvals By Centre
The government has expressed concern that any further delay could push the construction cost to nearly ₹350 crore per kilometre, taking the overall project cost beyond ₹40,000 crore.
Hyderabad: The estimated cost of the Hyderabad Metro Rail (HMR) Phase-II project has increased by ₹1,915 crore due to delays in securing approvals from the Centre, according to the government’s revised detailed project reports (DPRs). The revised cost of the 122.9-km Phase-II network was placed at ₹38,595 crore, up from the earlier of ₹36,680 crore. The per-kilometre construction cost has risen from about ₹298 crore to ₹314 crore.
The government has expressed concern that any further delay could push the construction cost to nearly ₹350 crore per kilometre, taking the overall project cost beyond ₹40,000 crore.
HMR operates across three corridors covering 69 km under Phase-I, developed at a cost of ₹22,000 crore. Following the recent takeover of the Phase-I project from L&T by the state government, modifications were made to the proposed Phase-II A and B corridors before fresh DPRs were submitted to the Centre.
Initially, five corridors were proposed under Phase-II and corridor-wise DPRs were submitted to the Centre on November 4, 2024. Subsequently, responding to public demand, the government proposed three additional corridors and submitted DPRs for them on June 21, 2025. The eight corridors, covering 162.5 km and including a link to Future City, were estimated to cost ₹43,848 crore. Excluding the Future City corridor, the estimated cost for 122.9 km stood at ₹36,680 crore.
Acting on suggestions from the Union urban affairs ministry, the state government removed the Future City corridor from Phase-II and shifted it to Phase-III after it was found to be financially unviable at this stage. Revised DPRs for seven corridors were then prepared and resubmitted based on January 2026 price levels in accordance with the ministry’s 2019 guidelines.
A committee examining the revised proposals reportedly raised questions about construction costs exceeding metro benchmark prices, particularly on the proposed Old City corridor. In response, the state government submitted detailed explanations justifying the higher estimates.
Officials cited several factors contributing to the cost escalation. The Old City corridor passes through highly congested areas requiring road widening and protection of 21 heritage structures. Construction in these stretches will require longer spans to avoid damage to heritage buildings, resulting in an estimated 15 per cent increase in costs. The need for portal piers at certain locations and a three-level interchange station at Chandrayangutta is expected to raise costs further, with the interchange station alone increasing expenditure by nearly 50 per cent. Skywalks are also proposed from Charminar and Falaknuma metro stations to nearby tourist destinations.
The state government also informed the Centre that an underground station proposed at Shamshabad airport on the Nagole–Shamshabad Airport corridor has increased project costs. On the Raidurg–Kokapet Neopolis corridor, special spans will be required to cross the Outer Ring Road at Nanakramguda and Kokapet. Additional expenditure is also expected on the double-deck section at Gangaram on the Miyapur–Patancheru route and on the LB Nagar–Hayatnagar corridor, where flyovers necessitate special spans, adding an estimated 5 per cent to costs.
Similarly, on the JBS–Medchal corridor, while the main line is 24.51 km long, an additional 0.51-km pocket track and a 2-km depot connection increase the effective project length to 27.02 km. Special spans proposed along this route are expected to add another 5 per cent to construction costs. Additional pocket tracks have also been proposed on the JBS–Medchal, JBS–Shamirpet and Nagole–Shamshabad airport corridors to facilitate train operations during peak hours and emergencies. A 620-metre reversal track has also been proposed at Chandrayangutta.
The government explained that signalling and telecommunications costs have risen because Phase-II extension corridors must use the same Thales, now Hitachi, Communications-Based Train Control (CBTC) system employed in Phase-I. Dependence on proprietary software has necessitated factoring in 50 per cent higher signalling costs and 25 per cent higher telecom costs. Viaduct costs have also increased by around 5 per cent due to the requirement for special spans at major junctions and utility corridors. Road-over-bridges proposed at Aramghar, Shamshabad, Suchitra Junction, Lothukunta and Alwal are each estimated to cost about ₹25 crore based on Phase-I experience.
The state government also highlighted that all seven Phase-II corridors satisfy the Metro Rail Policy requirement of a minimum 14 per cent Economic Internal Rate of Return (EIRR), with projected EIRRs ranging from 14 per cent to nearly 20 per cent. These calculations take into account benefits such as reduced traffic congestion, lower carbon emissions, travel time savings and fewer road accidents. Four of the seven corridors are direct extensions of existing Phase-I routes, and the government argued that improved network connectivity would significantly increase ridership and revenue across the entire metro system.
