The Telangana government has agreed in principle to take over Hyderabad Metro Rail Phase-I, currently under a public-private partnership. As part of a one-time settlement, the state will pay Rs 21 billion to L&T towards its equity investment and assume the project’s debt of around Rs 130 billion.

The decision follows discussions between Chief Minister A. Revanth Reddy and L&T Chairman & MD S.N. Subrahmanyan, aimed at resolving outstanding issues and facilitating the second phase of the metro, which awaits clearance from the Centre for a joint venture.

L&T had declined to participate in Phase-II due to concerns over seamless operations, revenue sharing, and cost mechanisms, instead offering to divest its entire Phase-I stake, effectively converting it into a state-owned entity. The takeover will be executed in a calibrated manner, ensuring compliance with all legal and statutory requirements, and includes detailed discussions on financials, asset valuation, and debt restructuring.