Union Budget Leaves Telangana Metro Projects in Limbo, But Hopes Remain High for Second Phase of Hyderabad Metro Rail

Hyderabad Metro Phase II May Get Clearance Despite Budget Snub
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Hyderabad Metro Phase II May Get Clearance Despite Budget Snub

Highlights

The Union Budget, presented by Finance Minister Nirmala Sitharaman, has been a major letdown for Telangana, with no new projects receiving funding approval.

The Union Budget, presented by Finance Minister Nirmala Sitharaman, has been a major letdown for Telangana, with no new projects receiving funding approval. However, there's a silver lining for the state, as officials are optimistic that the second phase of the Hyderabad Metro Rail project will still move forward in the coming months.

The second phase of the project, which spans 76.4 km and is estimated to cost ₹24,269 crore, has not been affected by the budget proposals, according to top government officials. These sources, who wished to remain anonymous, clarified that the Detailed Project Report (DPR) for the first phase of works, covering five key corridors, is currently being reviewed by the Union Ministry of Housing & Urban Affairs.

"The budget proposals will not impact the metro rail project. The DPR is in the process of technical evaluation and will be circulated to relevant ministries, including railways and surface transport. We are confident the project will receive the necessary approvals as it meets all criteria for a joint venture with the Centre," said the officials.

The second phase of the Hyderabad Metro Rail project is seen as critical for the city's expansion, with several important corridors planned. These include the Nagole-Shamshabad RGIA (Airport Corridor), Raidurg-Kokapet Neopolis, MGBS-Chandrayangutta (Old City Corridor), Miyapur-Patancheru, and LB Nagar-Hayat Nagar corridors. Together, these lines will cover a total of 76.4 km, significantly expanding the metro network and easing traffic congestion in the growing city.

The Telangana government is hoping for a sovereign guarantee from the Centre, which would allow it to secure loans from multi-lateral agencies like JICA (Japan International Cooperation Agency), ADB (Asian Development Bank), and the New Development Bank at low-interest rates. The state's share in the project is ₹7,313 crore (30%), while the Centre will contribute ₹4,230 crore (18%), with loans making up ₹11,693 crore (48%) of the total cost.

"With the revised budget estimates for MRTS and metro rail projects across the country set at ₹24,691 crore for 2024-25, and proposals amounting to ₹31,239 crore, the Hyderabad Metro Rail project stands a good chance of receiving the necessary approvals," said the officials.

While the Union Budget has caused concern, there are high hopes that the metro project will receive approval in the next couple of months. It is worth noting that 10% of the Centre’s capital expenditure went unutilized last year, making the metro project a potential beneficiary.

The Telangana government is also keen to move ahead with the metro's construction, despite the challenges posed by the budget. With the technical evaluation process under way and the anticipation of approval from the Centre, Telangana remains hopeful that the second phase of the Hyderabad Metro Rail will soon become a reality.

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