Telangana to Fund Hyderabad Metro Phase II Alone, CM Revanth Reddy Demands NOC

On Monday, Telangana Chief Minister A Revanth Reddy announced that the state government is prepared to execute the Hyderabad Metro Rail Phase II project using 100 percent state equity. Speaking at a press conference in Hyderabad, Reddy demanded that the Union Government issue a No Objection Certificate (NOC) to allow the state to proceed with the expansion work without financial assistance from the Centre.

The decision to fund the project entirely through state resources follows years of delay. According to Reddy, the Centre had previously agreed to sanction the Phase II project with a 50 percent equity share after the contract agency, L&T, expressed its inability to maintain the existing metro line.

L&T had created assets worth Rs 30,000 crore but incurred an annual loss of Rs 400 crore on the line. After consulting with the Centre, the Telangana government took over these metro rail assets for Rs 15,000 crore.

To clear L&T Metro's outstanding bank loan of Rs 13,600 crore, which carried an 8.25 percent interest rate, the state government convinced the Indian Railways Finance Corporation (IRFC) to secure a loan from a Japanese entity at a lower interest rate of 4 percent. However, Reddy alleged that the Central Government blocked the transfer of this loan to the state, despite the state already paying Rs 1,400 crore in dues and submitting an approval letter from the Reserve Bank of India.

Reddy urged Union Minister G Kishan Reddy, who represents Telangana, to take responsibility for releasing the IRFC funds to the state. The Chief Minister pointed out that the metro expansion project covers the jurisdictions of four BJP MPs, including Kishan Reddy's Lok Sabha segment.

He also accused the Centre of discriminating against Telangana, noting that the Union Government recently approved metro rail projects for Ahmedabad, Uttar Pradesh, and Visakhapatnam while delaying Hyderabad's expansion. Reddy emphasized that the state does not want to politicize the issue and aims to successfully complete both the takeover of Phase I and the construction of Phase II.