Why Hyderabad Metro takeover deal continues to raise transparency concerns

Questions continue to surround the Telangana government's Rs 15,000-crore Hyderabad Metro takeover, with key documents, valuation details, financing arrangements and commercial asset assessments remaining undisclosed. Opposition parties have demanded transparency, while conflicting claims over loan approvals have further fuelled concerns.

Hyderabad: Even as the Telangana government and the Centre trade charges over delays in financing for the Hyderabad Metro takeover, a larger question remains unanswered: why has one of the biggest public infrastructure transactions in the State’s history been shrouded in secrecy?

The Telangana government’s takeover of Hyderabad Metro Rail Phase-I from Larsen & Toubro (L&T) is valued at nearly Rs 15,000 crore, making it one of the biggest infrastructure acquisitions undertaken by the State. The transaction involves the assumption and refinancing of debt estimated at around Rs 13,600 crore, along with an equity settlement reportedly pegged at around Rs 1,461 crore.

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While the Cabinet approved the acquisition and the Assembly subsequently endorsed it through a resolution, several critical aspects of the transaction remain undisclosed. The complete Share Purchase Agreement (SPA), detailed due diligence reports, valuation methodology, debt restructuring arrangements, lender agreements, liability transfer provisions and indemnity clauses have not been placed in the public domain.

The controversy surrounding the Rs 13,600-crore IRFC refinancing loan has further exposed the opacity surrounding the transaction. While Chief Minister A Revanth Reddy claimed that all conditions had been fulfilled and the funds were being delayed by the Centre, Union Minister G Kishan Reddy contended that disagreements continued over loan conditions and repayment priorities. The conflicting narratives have only deepened concerns about the exact terms of the financing arrangement.

Questions are also being raised about the valuation process itself. The government’s initial estimate spoke of a Rs 15,000-crore deal comprising roughly Rs 13,000 crore in debt and Rs 2,000 crore in equity. The eventual equity settlement, however, reportedly came down to around Rs 1,461 crore, prompting queries about how the final acquisition value was negotiated and assessed.

Beyond debt and equity, the Hyderabad Metro takeover also comprises substantial commercial assets, including valuable land parcels, development rights and revenue-generating properties linked to the project. Yet, the valuation of these assets, future monetisation plans, revenue-sharing mechanisms, escrow arrangements and the State’s long-term financial exposure have not been comprehensively explained.

While the ruling Congress defended the takeover as a strategic necessity to facilitate future Metro expansion, the main opposition BRS raised questions over the deal and demanded transparency.

Recently, BRS MLC Dasoju Sravan accused the Congress administration of maintaining secrecy over the funds spent and loan arrangements related to the takeover. Suspecting irregularities, he demanded a judicial inquiry into the deal and full public disclosure of all documents to prevent it from turning into a scam or encouraging real estate profiteering.

However, there has been no response from the State government or the Metro authorities in this regard. Surprisingly, the BJP has also remained silent on the deal, except for countering Revanth Reddy’s allegations against the Centre over the loans.