Hyderabad, September13, 2025:
Larsen & Toubro (L\&T) has asked the Telangana government and Centre to take over operations of Hyderabad Metro Phase-I, citing unsustainable financial losses.
According to a recent letter, Phase-I — covering three corridors and about 69.2 km — has been bleeding money. L\&T claims that ticket revenue, subsidies, and pending payments are far from enough to cover day-to-day expenses.
Major costs include electricity bills, staff salaries, maintenance charges and other overheads. L\&T says many dues remain unpaid by government bodies.
The company has also flagged issues arising as Phase-II is being planned. Operational, revenue-sharing, and fare-management concerns between Phase-I and Phase-II may complicate efforts.
L\&T is open to handing over Phase-I completely or transferring its equity. Another option is setting up a Special Purpose Vehicle (SPV) for future operations.
Daily ridership remains high — around 450,000 commuters use the metro. Still, that is not enough to offset the losses.
The Centre has asked Telangana government for clarifications on the Detailed Project Report (DPR) for Phase-II, especially cost-sharing, unresolved Phase-I liabilities, and fare structures.
Key Takeaways
- L\&T has formally requested transfer of Hyderabad Metro Phase-I operations to state or central government due to rising losses.
- Losses stem from high operational costs vs low fare income, plus delayed government payments.
- The gap between Phase-I infrastructure and proposed Phase-II routes raises complications in fare sharing.
- Possible solutions include full handover, SPV formation, or new funding models under government oversight.
- Commuter numbers are significant, but not enough to make Phase-I self-sustainable.