Civil society groups call Hyderabad Metro takeover a bailout, demand transparency

Civil society organisations have alleged that the Telangana government’s decision to take over Hyderabad Metro Rail amounts to a bailout of L&T with public money rather than a genuine takeover. They demanded transparency in the agreement and raised concerns over the Rs 13,527 crore refinancing loan from IRFC.

Hyderabad: Amid growing debate over the Telangana government’s decision to take over the Hyderabad Metro Rail (HMR), several civil society organisations have alleged that the exercise amounts to a bailout of a private company using public money rather than a takeover.

Representatives of the organisations questioned the government’s decision and demanded that the entire takeover agreement be made public.

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D. Narasimha Reddy of Citizens for Better Public Transport asked why the government had not placed the agreement in the public domain. He also questioned the Central government’s silence over the proposed Rs. 13,527 crore refinancing loan from the Indian Railway Finance Corporation (IRFC).

“The government calls it a takeover, but it is actually a bailout of a private company with public funds. Why is L&T moving away from Metro operations? The Centre is aware of the implications of the IRFC loan, yet it has remained silent,” he alleged.

Narasimha Reddy said the takeover appeared to protect private investment while doing little to safeguard passenger interests. He urged the government to conduct a comprehensive cost-benefit, risk-benefit and financial viability analysis of Metro Phase I before proceeding with the Phase II expansion.

The organisations also questioned the viability of the proposed Phase II project. They argued that extending the Metro to the proposed Future City reflected misplaced priorities and would offer limited benefits to commuters.

Urban Development Forum member M. Srinivas criticised the Congress government for not maintaining transparency throughout the takeover process. He also questioned the justification that financial losses were the primary reason for the takeover.

Srinivas said L&T’s claim that the project suffered losses because of the Covid-19 pandemic was debatable. He pointed out that the concessionaire had originally planned to develop 18 million square feet of commercial space to supplement fare revenue but had developed only about 2 million square feet so far.

“Who is responsible for the failure of this business model?” he asked.

He also questioned the Centre’s insistence that the State take over Phase I before receiving approval for Phase II. According to him, the issue ultimately revolved around nearly 300 acres of prime land allotted to L&T for commercial development.

Srinivas further demanded that the State government explain why SBICAPS had been appointed as the new consultant for the transaction and clarify the status of the earlier exercise undertaken by IDBI.

Demands:

– Publish a comprehensive CAG-audited financial statement for Phase I
– Disclose full terms of the Rs. 13,527 crore IRFC refinancing agreement – including who bears the cost
– Place Phase II demand studies, ridership projections, and viability assessments in the public domain before central approval
– Initiate formal public consultations with communities all along seven proposed Phase II corridors
– Disclose the complete revenue-sharing arrangement with the PPP concessionaire, including all commercial land development income