HMR Phase 1 handover likely next year as L&T’s 15-year Metro journey nears end

L&T Metro Rail Hyderabad (L&TMRH), which built and has been operating Phase 1 of the Hyderabad Metro Rail (HMR) across 69.2 km in three high-density corridors, is expected to hand over operations to the Telangana Government within the next six months to a year.

This marks the end of a 15-year-long public-private partnership (PPP)— once hailed as the world’s largest elevated metro rail project under the PPP model — and brings to a close a complex and often turbulent relationship between L&T and successive governments.

Officials sources indicated that Chief Secretary K. Ramakrishna Rao played a key role in breaking the ice with L&T’s top management, ensuring the ball is back in the Centre’s court to approve a Joint Venture (JV) with the State Government for HMR phase 2 of 76.4 km and estimated to cost ₹24,269 crore.

Concerns have already been raised about the continuity of operations across the Red Line (LB Nagar–Miyapur), Blue Line (Nagole–Raidurg), and Green Line (JBS–MGBS) once the government — likely through its special purpose vehicle, Hyderabad Metro Rail Limited (HMRL) — takes over. However, these concerns may be unfounded.

L&TMRH has outsourced operations and maintenance to Keolis, a French multinational headquartered in Paris, since inception. Keolis, which also operates metro systems in London, Dubai, Paris, and recently Pune, is expected to be retained post-handover.

Despite financial losses, L&TMRH is credited with running a tight and efficient operation, maintaining clean infrastructure, minimal breakdowns, and high service frequency. The Keolis contract runs until November 2026, and the handover timeline is likely to align with this.

Keolis manages 57 trainsets, metro infrastructure, CBTC (Communication-Based Train Control) systems, and contributes to 80% of the digital ticketing solutions. HMR boasts over 99.5% punctuality and a 90%+ passenger satisfaction rate, making it one of the best-rated metro networks in India.

It must be noted that L&T was awarded the HMR project by the then Andhra Pradesh Government, signing the Concession Agreement (CA) on Sept 4, 2010, well before the state’s bifurcation. Financial closure was achieved in a record six months on March 1, 2011, with a ₹11,000 crore loan sanctioned by a consortium of 10 banks led by State Bank of India (SBI) — the largest fund tie-up for a non-power infrastructure PPP project in India at the time. Official sources also state that the project’s journey reflects how public policy shifts can impact large infrastructure ventures, even when backed by public sector funding.