The decision came after Telangana Chief Minister A Revanth Reddy met housing and urban affairs minister Manohar Lal Khattar, railway minister Ashwini Vaishnaw and coal and mines minister G Kishan Reddy in New Delhi on Monday and Tuesday.
The state government said SBI Caps will assess the valuation of Hyderabad Metro’s Phase-I assets. It will also look at the financing requirements for the proposed takeover by helping raise loans and potential lending arrangements. In addition to this, it is also expected to assess the expansion of the second phase, the construction cost and financing.
The Centre and the state government will decide the future course of action based on a report from SBI Caps, government officials said.
Sources aware of the discussions said that a special purpose vehicle (SPV) with equal equity participation from the Centre and the Telangana government will be created for the Metro Phase-II. Under the proposed structure, the existing Metro Phase-I assets would also be transferred to this SPV, which would then explore raising financing for future expansion, including Phase-II, based on the valuation of those assets.
The development comes after Reddy’s repeated appeals to the Centre to approve the second phase of Hyderabad Metro, and a week after he publicly alleged that the transfer of a proposed Rs 13,600 crore refinancing arrangement through the Indian Railway Finance Corporation (IRFC) had been delayed despite all formalities being completed by the state government.
The Telangana government acquired Hyderabad Metro’s existing assets from concessionaire L&T Metro Rail Hyderabad as of June 1. Last week, Reddy offered that the state was willing to execute the proposed Phase-II expansion independently if the Centre granted the required approvals.State government officials familiar with the discussions told ET that the Rs 13,600 crore IRFC refinancing package remains on the table as of now, but its future will be determined as part of the broader review of funding requirements for both phases of the Metro project. They added that the decision to appoint a consultant for an independent evaluation is indicative of the Centre’s interest in participating in both the Phase-I takeover and Phase-II expansion.
As part of the arrangement, a senior central government official and Telangana’s special chief secretary for municipal administration and urban development will coordinate with the consultant during the evaluation process.
The proposed Phase-II expansion is expected to add more than 120 km to Hyderabad’s Metro network and is among the state’s key urban infrastructure projects.