Hyderabad Metro Rail Phase II Expansion: Key Approvals Expected Despite Budget Silence
Hyderabad Metro Rail project remains under active consideration. Senior government officials confirmed that approvals for the Rs 24,269 crore expansion are expected in the coming months
Hyderabad: While the Union Budget presented by Finance Minister Nirmala Sitharaman on Tuesday did not allocate specific funds for new projects in Telangana, the highly anticipated second phase of the Hyderabad Metro Rail project remains under active consideration. Senior government officials confirmed that approvals for the Rs 24,269 crore expansion are expected in the coming months, as the project progresses through technical evaluations.
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Project Overview and Evaluation Process
The second phase of the Hyderabad Metro Rail project aims to expand the metro network by 76.4 km, spread across five corridors in the city. Currently, the proposal is undergoing a detailed technical evaluation by the Union Ministry of Housing & Urban Affairs, with key ministries such as railways and surface transport also involved in the assessment.
Despite the Union Budget’s lack of specific allocations, officials involved in the discussions are confident that the project will continue to move forward. According to one anonymous official, the project aligns with the central guidelines for metro rail joint ventures, which increases optimism for securing approvals in the near future.
Funding and Financial Structure
The Telangana government is seeking a sovereign guarantee from the Centre, a crucial step for securing funding from international financial institutions such as the Japan International Cooperation Agency (JICA), the Asian Development Bank (ADB), and the New Development Bank (NDB). With this backing, the project would be able to secure loans at concessional interest rates, significantly easing the financial planning and execution of the project.
The funding structure for Hyderabad Metro Rail Phase II consists of:
- 30% (Rs 7,313 crore) from the Telangana government
- 18% (Rs 4,230 crore) from the Centre
- 48% (Rs 11,693 crore) through external loans
- 4% (Rs 1,033 crore) through public-private partnership (PPP) investments.
Officials also pointed to the fact that nearly 10% of the Centre’s capital expenditure was unutilized last year, which could increase the likelihood of project approval. They noted that capital investments in infrastructure, such as metro projects, continue to be prioritized despite revenue expenditure constraints.
Project Scope and Expected Benefits
The Phase II expansion of the Hyderabad Metro Rail project aims to significantly enhance connectivity across key corridors in the city. The proposed routes include:
- Nagole to Shamshabad RGIA (Airport Corridor): 36.8 km
- Raidurg to Kokapet Neopolis: 11.6 km
- MGBS to Chandrayangutta (Old City Corridor): 7.5 km
- Miyapur to Patancheru: 13.4 km
- LB Nagar to Hayatnagar: 7.1 km
These corridors are expected to improve urban mobility and provide a sustainable solution to traffic congestion in Hyderabad, further boosting the city’s infrastructure and transportation network.
Optimism for Approval Following Chennai Metro’s Success
The approval of Chennai Metro Phase II by the Centre in October 2024 has set a positive precedent for similar projects in India. Officials believe that the success of Chennai Metro’s Phase II may provide a favorable environment for the Hyderabad Metro Rail expansion to receive approval and funding in the near future.
As discussions continue, there is cautious optimism that the Hyderabad Metro Rail Phase II project will gain the necessary approvals to proceed, improving the city’s transport infrastructure and helping meet the growing demand for sustainable public transportation in Hyderabad.
