Telangana Govt scouting for second transactional tech consultant to take over Hyderabad Metro Rail Phase-I

The Telangana Government and its special purpose vehicle, Hyderabad Metro Rail (HMR) Limited, are in the process of appointing another transaction consultant to assist with the takeover of Phase-I management and operations from L&T Metro Rail Hyderabad (L&TMRH), specifically to address technical aspects.

The need for a second consultant arose after it was realized that the agencies tasked with scrutinizing the financial and legal aspects of the 69.2 km project, spread across three corridors, may not have the expertise to evaluate its technological components, according to official sources.

During the tender finalization stage for the first consultant for the ‘non-technical sovereign audit’, eventually awarded to IDBI Capital, it became evident that none of the shortlisted agencies, including SBI Caps and PNB, possessed the capability to assess technical aspects, which require personnel experienced in metro rail and railway technology.

Consequently, it was decided to seek assistance from another consultant with proven expertise in metro rail technology for a technical due diligence audit to assess the rolling stock, electric traction, signalling (CBTC), operations control centre, etc.

Public sector firms such as Delhi Metro Rail Corporation (DMRC), RITES, and National Capital Region Transport Corporation (NCRTC) are among those likely to be considered if preference is given to government entities, though the participation of overseas expert consultants has not been ruled out.

The Chief Secretary-led panel has been mandated to complete scrutiny of the financial and technical aspects of Phase-I within ‘100 days’, in order to meet the Chief Minister’s deadline for takeover before the start of the next financial year. However, senior officials believe that a thorough audit could take four to five months. “There are numerous short- and long-term contracts of L&TMRH that the consultant agencies must examine to ensure these do not become legal bottlenecks later”,said top sources.

One certainty is that the payment of ₹15,000 crore, including the debt component as per the agreement between L&T and the State Government three months ago, must be settled before the latter assumes control of the project.

The government was compelled to buy out HMR Phase-I from concessionaire L&TMRH after it declined to participate in the integration with the proposed HMR Phase-II (2A) of 76.4 km expansion across five corridors, estimated to cost ₹24,269 crore.

The integration was insisted upon by the Centre for passenger convenience and to facilitate the formation of a Joint Venture (JV) with the State Government for sourcing funds from international agencies at low interest rates. One of the plans under consideration is to monetize the 200-odd acres of land tied to the project, along with commercial space development, including four malls developed by L&TMRH, sources added.