# Hyderabad Metro Phase-I takeover, Phase-II expansion hit funding hurdle 2026-09-25T22:36:48+00:00 | Governance | Indian Opinion Desk Corroboration: 1 independent outlet Nearly a year after the Telangana government signed an agreement with Larsen & Toubro (L&T) to take over Hyderabad Metro Rail Phase I, the buyout process and the proposed Phase II expansion have stalled over funding issues. The initial proposal involved paying Rs 2,100 crore for L&T's equity and assuming around Rs 13,000 crore in debt, later revised after due diligence. SBI Caps, tasked with securing a lender for about Rs 13,500 crore, has been unable to finalise a deal despite approaching several agencies, including institutions in Gujarat's GIFT City. No lender has shown willingness to offer the low-interest rates the government seeks, officials said. The Indian Railway Finance Corporation withdrew from a proposed Rs 13,527-crore loan days after signing an agreement earlier this year. The Centre is reportedly unwilling to sign a joint venture agreement for the Rs 38,595-crore Phase II until Phase I is under a single operating entity. Meanwhile, L&TMRH, operating the metro since November 2017, is expected to receive another three-month extension. Nearly five lakh daily passengers face a longer wait for improved connectivity. ## Indian Opinion Analysis PPP metro buyouts in India are rare, and this case tests whether states can refinance operational debt without central guarantees. The Telangana government's insistence on low-interest loans clashes with lenders' risk appetite, especially without a sovereign backstop. Phase II's planned 122.9-km network, linking key suburbs and the airport, cannot proceed until the Centre signs a joint venture, which it has tied to a single operating entity. The key number to watch is whether SBI Caps can secure a loan before L&TMRH's next operating extension expires, likely in three months. ## Coverage - thehindu.com Tags: Hyderabad Metro Rail, Indian Railway Finance Corporation, Larsen & Toubro, SBI Caps, Telangana government Canonical: https://indianopinion.org/hyderabad-metro-phase-i-takeover-phase-ii-expansion-hit-funding-hurdle/ License: Summary and commentary (c) Indian Opinion, reusable with attribution. Facts belong to the linked sources. Cite: https://indianopinion.org/hyderabad-metro-phase-i-takeover-phase-ii-expansion-hit-funding-hurdle/#story-in-brief