L&T plans to quit Hyderabad Metro and blames free bus rides, slammed for ‘bad excuse’

While L&T has blamed the Telangana government’s free bus rides for women for low metro ridership, critics have called this an unreasonable excuse.
Hyderabad Metro
Hyderabad Metro
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Infrastructure giant Larsen & Toubro (L&T), which has been handling the Hyderabad Metro Rail project in a public-private partnership mode, has said that it is considering selling off the project, saying it was causing a ‘dead burden’ due to low ridership. While senior officials of the company have talked about their divestment plans at least since 2022, for lowering the firm’s debt burden among other reasons, the company has now blamed the state government's recently introduced free bus ride scheme for women for low ridership on the metro rail.

In a recent interview with Business Today, L&T’s president, whole-time director and Chief Financial Officer R Shankar Raman has blamed the Telangana Congress government’s ‘Mahalakshmi scheme’, which provides free bus rides to women and has been a big hit, for low ridership and the divestment plans. His remarks against the scheme, which is also in place in states like Tamil Nadu and Karnataka, and has been promised in Andhra Pradesh by the opposition TDP, has triggered a row. 

Free bus rides for women in state-run buses have often stirred debates. While they are celebrated for empowering women, enhancing their mobility and access to public spaces, a few sections have raised objections, calling it a ‘freebie’ that ‘burdens’ state finances. Auto drivers too have objected to the scheme, saying it has hurt their business.  

Besides, soon after coming to power, Telangana Chief Minister Revanth Reddy put ongoing metro works are on hold, redrew the route plans, and also asked officials to look into the related agreements to probe alleged benefits handed to L&T Metro Rail Hyderabad Limited. 

However, it is important to note that Hyderabad Metro has been facing a financial crisis way before the free bus ride scheme was introduced. In fact, in June 2021, L&T Metro rail authorities had met the then CM K Chandrashekar Rao, seeking financial assistance. In the details submitted to the previous BRS government, L&T had said that the firm had recorded Rs 400 crore loss in the first quarter of that financial year alone. 

Several people have also been calling out L&T for their alleged poor planning of the Hyderabad metro project which they say resulted in the loss of ridership, such as not increasing the number of metro trains, not handling congestion during peak hours, failure to extend the metro line till Gachibowli and so on. 

In an interview to Business Today, R Shankar Raman called the Congress government’s free bus ride scheme ‘not sustainable’. “Some of these sops are done on the back of political promises, which is not going to help the state finances because what is the point in making the state's transport corporation go bankrupt… there's no fun in doing that," Raman told Business Today. He also said that private capital is being used to set up a “modern, zero-polluting transport system” like the metro rail, but simultaneously, the state government is spending money on “making people use polluting buses.” He also said that the free bus rise scheme is leading to a gender redistribution in public transport, as women use buses for free while men pay Rs 35 on average for a commute, calling this an “unsustainable” trend. 

Shankar Raman told Business Today that currently, around 4.8 lakh people use the metro daily. “We need to lighten the dead burden of this project because of the current ridership," Raman said. 

He said that while the Congress government’s welfare initiative for women is good, it is not healthy for a huge city like Hyderabad to rely on buses that cause pollution. He also said that decisions made on political promises cannot help state finances. “The state finances can go bankrupt. There is no fun in doing that”. 

This claim has also been criticised widely. Srinivas Alavilli, an Integrated Transport and Road Safety Fellow at the World Resources Institute (WRI) and a sustainable mobility advocate, compared Raman’s complaints against free public transport to free school education. “Metro and bus have different commuters. Both have lot of scope to grow in every city as India grows. L&T wants to exit for other reasons and making excuses,” he said. 

Meanwhile, Raman said in the BT TV interview that L&T has successfully negotiated a Rs 3,000 crore soft loan with the Telangana government, which is to be repaid over time without any interest. Raman added that the firm is also looking at monetising some of the real estate attached to the Metro. 

"My own assessment is that when we sit down for FY26 FY31 plan, this could be an asset to be monetised in that period because it would then be of interest to investors, particularly the pension funds and global funds, given the 65-year concession,” he told BT TV.

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