Hyderabad Metro Hit By Free Bus Blitz: L&T Plans To Quit Project After 2026

In a recent announcement, L&T, the major stakeholder in the Hyderabad Metro project in Telangana, revealed plans to divest its ownership post-2026.

L&T holds a 90 per cent stake in the metro project, with the remaining 10 per cent owned by the Telangana state government.

R Shankar Raman, L&T's President and CFO, attributed this decision to the waning appeal of the metro system following the implementation of a free bus scheme by the Congress government in Telangana.

Raman highlighted a noticeable shift in transportation patterns, noting an increase in women commuters opting for free bus rides over metro journeys, while men are gravitating towards railway travel.

The Mahalakshmi bus scheme, offering free rides to women and transgenders on government-operated non-AC buses in Telangana, has significantly impacted metro ridership, leading to approximately 4,80,000 daily users.

With a 65-year concession to operate the metro system, the company aims to address declining ridership concerns. In response to the evolving scenario, L&T also secured a soft loan of Rs 3,000 crore from the Telangana government, aimed at easing financial burdens and strategising for future monetisation opportunities, including real estate assets linked to the metro infrastructure.

Raman emphasised the potential for asset monetisation between FY26 and FY31, attracting interest from investors, particularly pension and global funds, given the project's extended concession period, reports India Today.

While acknowledging the state government's efforts to enhance public transportation, Raman cautioned against over-reliance on pollution-prone vehicles, emphasising the unpredictability of such initiatives and their impact on transportation dynamics.

Raman's statements underscore the complex interplay between government policies, public transit preferences, and corporate strategies in shaping urban transportation landscapes.

The Hyderabad Metro Rail is the world’s largest metro project in public-private partnership mode. Currently, it covers 69.2 km across three corridors.

Corridor I — Miyapur to LB Nagar

Corridor II — JBS to MGBS

Corridor III — Nagole to Raidurgam