Hyderabad Metro Phase-II Costs Surge by ₹1,915 Crore Amid Approval Delays
The estimated cost of the Hyderabad Metro Phase-II project has increased by ₹1,915 crore to ₹38,595 crore. Delays in central approvals and technical complexities, including heritage preservation and complex engineering requirements, have driven up the total investment needed for the 122.9-km transit network.
Highlights
- •Hyderabad Metro Phase-II costs have risen by ₹1,915 crore due to central approval delays.
- •The total project budget for 122.9 km is now estimated at ₹38,595 crore.
- •Technical challenges, including heritage site protection and special spans, contribute to higher construction expenses.
- •The project maintains an projected economic return of 14% to 20% despite budget increases.
The Hyderabad Metro Rail (HMR) Phase-II project has faced a significant financial setback, with the total estimated cost surging by ₹1,915 crore. This increase is primarily attributed to delays in securing necessary clearances from the central government, according to the latest revised detailed project reports (DPRs). The budgetary requirement for the expansive 122.9-km network has now climbed to ₹38,595 crore, up from the previously projected ₹36,680 crore, causing the per-kilometre construction cost to rise from approximately ₹298 crore to ₹314 crore.
Impact of Project Delays and Rising Costs
Authorities have expressed growing concern that any additional postponement in implementation could elevate construction expenditures further, potentially exceeding ₹350 crore per kilometre and driving the total project cost past the ₹40,000 crore threshold. The Hyderabad Metro administration, having recently taken over Phase-I operations from L&T, has meticulously modified the proposed Phase-II A and B corridors to align with current requirements before submitting updated documentation.
The evolution of the project scope has been substantial. Initially, five corridors were planned, followed by a proposal for three additional routes in mid-2025 in response to public demand. However, following guidance from the Union Ministry of Urban Affairs, the Future City corridor was removed from Phase-II and shifted to Phase-III for better financial viability. The government has resubmitted reports for seven corridors based on January 2026 price standards.
Technical complexities have further influenced these rising figures. The Old City corridor, for instance, passes through densely populated zones, necessitating extensive road widening and structural protections for 21 designated heritage sites. Engineers have planned for longer spans and a multi-level interchange at Chandrayangutta to mitigate structural risks, which alone adds significantly to the budget. Additional expenses are linked to the specialized underground station at Shamshabad Airport and unique requirements for crossing the Outer Ring Road at Nanakramguda and Kokapet.
Maintaining Connectivity and Economic Returns
Despite the cost escalation, the state government remains optimistic about the project's viability. Officials stated that all seven corridors currently meet the Metro Rail Policy mandate, projecting an Economic Internal Rate of Return (EIRR) between 14 per cent and 20 per cent. This projection factors in critical urban benefits, such as the alleviation of traffic congestion, reduced carbon emissions, significant travel time savings, and improved road safety. As four of these routes are direct extensions of the existing system, the government anticipates that improved network connectivity will drive substantial ridership growth and bolster overall revenue for the Hyderabad Metro Rail network in the coming years.
