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Centre considers 50:50 funding model for Hyderabad Metro Phase II as Telangana submits 162-km expansion proposal

#Infrastructure News#Infrastructure#India#Telangana#Hyderabad
Last Updated : 22nd May, 2026
Synopsis

The Centre has indicated in-principle support for participating in Hyderabad Metro Phase II through a 50:50 cost-sharing arrangement with the Telangana government, according to statements made following a review meeting in New Delhi. The proposed second phase involves a 162-km metro expansion across multiple corridors in Hyderabad and is awaiting final approval from the Union government after submission of the Detailed Project Report and technical documents by the state. The development comes amid the Telangana government’s ongoing transition towards a government-led metro model following the proposed takeover of the existing metro operations from Larsen & Toubro. Alongside metro expansion discussions, the Centre also confirmed sanctions for 39 sewage treatment plants under the AMRUT 2.0 scheme aimed at improving the Musi River ecosystem and urban infrastructure in Hyderabad.

The Union government has indicated its willingness, in principle, to participate in Hyderabad Metro Phase II through a 50:50 funding arrangement with the Telangana government, providing momentum to the proposed large-scale metro rail expansion planned across the city.


G Kishan Reddy stated on Wednesday that Union Minister for Housing and Urban Affairs Manohar Lal Khattar had assured positive consideration of Telangana’s proposal for the second phase of the Hyderabad Metro project during a review meeting held in New Delhi. The Centre, however, is expected to take a final decision after examining the Detailed Project Report (DPR) and technical details submitted by the state government.

The proposed Phase II expansion covers around 162 km and forms part of Hyderabad’s broader urban mobility and infrastructure expansion plans. The project is expected to significantly extend metro connectivity towards emerging residential, commercial and airport-linked corridors across the metropolitan region.

According to available project details, the expansion has been divided into multiple phases and corridors. The Telangana government has proposed Phase 2A and Phase 2B networks, covering extensions of existing lines as well as new metro routes connecting locations such as Kokapet Neopolis, Patancheru, Medchal, Shamirpet and the airport corridor.

The proposed funding structure marks a shift from the earlier public-private partnership model adopted for Hyderabad Metro Phase I, which was implemented by Larsen & Toubro. The state government is now moving towards a joint venture model with the Centre after L&T opted against participating in the second phase expansion.

The transition also coincides with the Telangana government’s efforts to take over operational control of the existing metro network from L&T. Reports indicate that the proposed arrangement involves the state assuming approximately INR 13,000 crore in debt along with an additional equity payout.

Infrastructure and urban development experts have been closely tracking the project due to its potential impact on Hyderabad’s expanding residential and commercial corridors, particularly in western and peripheral growth zones where large-scale office developments, Global Capability Centres and residential projects are witnessing increased activity.

Apart from the metro expansion discussions, the Centre also informed Telangana representatives that 39 sewage treatment plants had been sanctioned under the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) 2.0 scheme for cleaning the Musi River. The sanctioned projects involve an estimated investment of INR 3,975 crore aimed at improving sewerage infrastructure and urban services in Hyderabad.

The Hyderabad Metro expansion proposal is currently under review by the Ministry of Housing and Urban Affairs, with approvals expected to depend on technical evaluation, funding structure and compliance with the Metro Rail Policy framework.

Source - PTI

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