L&T Seeks Exit from Hyderabad Metro, Cites Heavy Losses and Lack of State Support

The future of Hyderabad’s Metro Rail has become uncertain after Larsen & Toubro (L&T), the company behind the project, formally asked to withdraw from it. L&T said it has faced huge financial losses and has not received the support it expected from the Telangana government.

As the majority stakeholder in the Public-Private Partnership (PPP), L&T has offered to sell its equity to either the state or central government. The company says rising costs, heavy debt, and the COVID-19 pandemic have pushed it into financial stress. Metro services were shut for more than five months during the pandemic, leading to a sharp drop in ridership and revenue.

The dispute between L&T and the state is not new. Back in 2017, the company asked for Rs 3,756 crore to cover cost overruns and delays. That amount has since grown, but officials say no assistance has been given. L&T has also made it clear it does not want to take part in the state’s proposed Phase-II metro expansion under the same PPP model.

The firm has warned that having two separate operators for Phase-I and Phase-II would create problems in ticketing, operations, and revenue sharing, making the system more complicated for passengers. To avoid this, L&T has suggested creating a new Special Purpose Vehicle (SPV). Under this plan, the government would take over both existing and upcoming metro lines, ensuring one unified operator for the city’s entire network.

Currently, the Telangana government holds 10% of the project. It has not yet given an official response to L&T’s letter.

Hyderabad Metro, with its Red, Green, and Blue lines, covers 69.2 kilometers and is India’s largest metro system built under a PPP model. Once seen as a success story in urban transport, the project now faces an uncertain future.