Hyderabad metro rail ticket fares hike appears imminent

Hyderabad Metro Rail faces fare hike due to financial constraints, debt restructuring, and increased operational costs.

Hyderabad Metro Rail ticket fare hike seems to be inevitable with L&T Metro Rail Hyderabad (L&TMRH), the firm which has built and runs the public transport system getting ready to bit the bullet after dilly-dallying for the last two years.

L&TMRH chief executive officer and managing director K.V.B. Reddy has confirmed the same but has not indicated the percentage of the hike being considered. “The operations cost has increased by 160% over the years . Our cumulative loss of ₹6,598 crore and high interest rate for loans taken is killing us,” he said.

Despite debt restructuring, the interest rate on loans taken for the project has climbed back to 7.5-8%. The Covid pandemic has also significantly impacted the financial viability of the project increasing the risk of becoming an NPA – non performing asset, though the parent company L&T has been pumping in around ₹1,000 crore annually for interest payments.

The annual revenue of ₹1,400 crore from fares and real estate - monetised eight million sq.ft of the permitted 18.5 million sq.ft , is not sufficient, claimed Mr. Reddy and has pointed out that there has been no revision from the initial launch fares of ₹10-₹60 in the last seven-and-half years. The company is also armed with recommendation of the Centre appointed Fare Fixation Committee submitted in 2023.

Moreover, L&TMRH also needs fresh funds urgently to purchase new train sets as the lease option from other metro systems like Nagpur did not work out. “We are conscious of the demand for increasing services during peak hours, but we need money for the new trains. Notwithstanding financial constraints, we have finalised an indigenous metro rail coach manufacturer to purchase 10 train sets of three coaches each costing upto ₹400-₹450 crore in two phases. Talks are at an advanced stage and the initial tender is for five train seats,” said the MD.

It will take at least 15 months from the date of signing for these to join the existing fleet of 57 train sets running across 69.2 km of three dense traffic corridors of the capital region. The possibility of the world’s biggest public, private partnership metro rail project, where L&TMRH has infused about ₹21,000 crore, breaking even is only by 2033 carrying an estimated 7/7.5 lakh passengers a day, said Mr. Reddy.

Daily passenger intake is now about 4.75 lakh a day during weekdays and 3.5 lakh during weekends in the three corridors (Red line: Miyapur to LB Nagar 29 km), Blue line: Nagole to Raidurg 29 km and Green line: JBS to MGBS 11 km).