State Cabinet Meet On Feb. 23 Likely To Approve Metro Takeover Plan
The government is keen to complete the process before the end of the current financial year 2025-26 on March 31
Hyderabad: The Cabinet meeting scheduled for February 23 is likely to approve a plan of action for the takeover of the Hyderabad Metro Rail Phase-I project from L&T. Official sources said financial and technical assessment reports have been finalised and will be placed before the Cabinet for approval.
The government is keen to complete the process before the end of the current financial year 2025-26 on March 31, as delays in assuming control of Phase-I have emerged as a major hurdle in securing approvals from the Centre for the expansion of the network.
As part of the process, a committee headed by Chief Secretary K. Ramakrishna Rao prepared detailed financial and technical assessments, which are scheduled for presentation before the Cabinet. The government has initiated formal transition steps, appointing the Delhi Metro Rail Corporation as technical consultant to guide the takeover, while IDBI served as the financial and legal adviser. A separate report detailing outstanding dues payable to L&T Metro Rail Hyderabad Ltd (LTMRHL) has also been prepared.
Officials said discussions are underway between the state government’s metro rail wing, Hyderabad Metro Rail Limited (HMRL), and L&TMRHL to finalise agreements required for the transfer of operations, with negotiations focusing on resolving contractual and operational issues linked to the handover. The Cabinet approval is expected to accelerate administrative and operational changes needed for the transition.
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It may be recalled that the previous Cabinet meeting chaired by Chief Minister A. Revanth Reddy at Medaram on January 18 — the first Cabinet meeting held outside Hyderabad — had decided to expedite the expansion of the Hyderabad Metro Rail and fast-track the takeover of Phase-I from L&T. The Cabinet also approved land acquisition proposals worth ₹2,787 crore for Metro Phase-II and reviewed progress on the takeover process.
The Cabinet noted that proposals for four corridors under Phase-IIA and three corridors under Phase-IIB remain pending with the Centre, primarily due to delays in transferring Phase-I operations from L&TMRHL. To avoid further setbacks, it cleared measures to speed up land acquisition linked to the expansion project.
The state government had earlier signed an agreement on September 25, 2025, with L&TMRHL to take over the entire Phase-I project after the company decided to exit, citing financial losses. Under the agreement, the government agreed to absorb outstanding debt of around ₹13,000 crore and refund nearly ₹2,000 crore towards the company’s equity investment as a one-time settlement.
The government plans to execute Phase-II as a joint venture between the state and the Centre. The Centre has stipulated that L&T must agree to integrate Phase-I operations with Phase-II and arrive at a consensus on revenue sharing and operational costs. L&T declined to participate in Phase-II, citing mounting losses in Phase-I, leaving the state government with little option but to proceed with the takeover and subsequently approach the Centre for approvals.
