Hyderabad: Six months after formally deciding to part ways, the transition of Hyderabad Metro Rail from Larsen & Toubro to the state govt remains stuck in procedural limbo, with the crucial share purchase agreement yet to be finalised. Though the plan was for the state to take over operations from April 1, the start of the financial year, officials now indicate that the agreement is likely to be signed before April 30. Sources said the consultant, IDBI, is in the process of finalising the share purchase agreement and will soon submit it to the govt. Officials in the municipal administration department attributed the delay partly to the ongoing process of firming up borrowing arrangements with the Indian Railway Finance Corporation (IRFC). “It has been decided to raise around Rs 13,000 crore from IRFC as part of the takeover plan. Of the total Rs 15,000 crore debt, nearly Rs 2,000 crore is equity. While the debt component will be settled with lenders, the equity portion is to be paid to L&T,” sources said. However, arranging this equity has emerged as a key hurdle. Since the govt is taking over the project through Hyderabad Metro Rail Limited, it is required to settle the equity component, but officials said the state is currently not in a position to release these funds immediately, contributing to the delay. Under the financing plan, IRFC will fund nearly 75% of the debt — about Rs 13,000 crore — in Japanese yen, while the remaining 25% will be mobilised in Indian rupees. Officials noted that the share purchase agreement is the central document governing the entire transaction, detailing payment structures, conditions, and operational arrangements.Delay in clearancesAnother factor slowing progress is the delay in administrative clearances. Officials said the consultant is awaiting time from the chief minister, who also holds the municipal administration portfolio, to review and finalise the agreement. His recent engagements, including assembly sessions and election campaigning in Kerala, have pushed timelines. Once the agreement is closed, the govt is expected to shift focus to operational continuity and may formalise arrangements with the existing agency handling the metro’s technical operations.
