The Hyderabad Metro Rail, operational since 2017, has been a lifeline for lakhs of commuters. But its troubled journey offers a sobering lesson. Once showcased as the world’s largest metro project under the public-private partnership (PPP) model, it now stands as proof of the model’s deep flaws in building essential infrastructure. Even with a corporate giant like Larsen & Toubro (L&T) at the helm, the project was crippled by financial stress and cost overruns—demonstrating that urban transport systems cannot depend on private enterprise.
The project’s cost eventually touched over ₹22,000 crore. L&T was given government support, loans from a consortium of banks, and 280 acres of real estate to ensure viability. Yet losses mounted to nearly ₹5,000 crore as revenues fell—about 21 percent lower than the previous year—and state support fell short. Inevitably, L&T sought to divest its 90 percent stake. Matters came to a head when Telangana moved to launch Phase II, while the Centre insisted on L&T’s participation in a tripartite framework. The company refused, and after negotiations, the state agreed to take over the metro—assuming ₹13,000 crore of debt and paying L&T ₹2,000 crore. While pragmatic, the settlement has left the public to bear the costs.
The metro today ferries close to five lakh passengers daily, with demand for more coaches and expansion rising steadily. The immediate task before the state government is to ensure efficient operations, add capacity quickly, and move ahead with expansion. That will be the litmus test of its stewardship. But the broader message goes beyond Hyderabad: mass rapid transit is a public good, involving huge capital investment and long gestation. It cannot be tied to profit margins or commercial risk.
The trajectory of the Hyderabad Metro exposes the hollow promise of the PPP model in such vital sectors. The ever-prescient ‘Metro Man’, E Sreedharan, had long warned that entrusting civic infrastructure of this scale to private players was a grave mistake. Policymakers must heed that advice. Future metro projects should better be conceived and operated by government. Anything less would risk repeating Hyderabad’s costly experiment.