The Union Budget may not have allocated funds for new projects in Telangana, but the second phase of the Hyderabad Metro Rail project remains under active consideration, with approvals expected in the coming months, senior government officials said Tuesday.

The Rs 24,269 crore Hyderabad Metro Rail Phase II expansion, spanning 76.4 km across five corridors, is currently undergoing technical evaluation by the Union Ministry of Housing & Urban Affairs. The budget proposals presented by Finance Minister Nirmala Sitharaman in Parliament will not impact the project’s progress, according to officials involved in the discussions.

“The evaluation process is ongoing, with the proposal being examined by relevant ministries, including railways and surface transport,” an official stated on condition of anonymity. “Given that the project aligns with central guidelines for metro rail joint ventures, there is optimism about securing approvals.”

Revised estimates for Mass Rapid Transit System (MRTS) and metro projects nationwide have been pegged at Rs 24,691 crore for 2024-25, with proposals amounting to Rs 31,239 crore for the current financial year. Officials believe these figures indicate a favorable environment for the Hyderabad Metro Rail expansion.

The Telangana government is seeking a sovereign guarantee from the Centre, a crucial requirement to secure funding from international financial institutions such as the Japan International Cooperation Agency (JICA), the Asian Development Bank (ADB), and the New Development Bank (NDB). This backing would facilitate loans at concessional interest rates, easing financial planning for the project.

The funding structure for Hyderabad Metro Rail Phase II comprises a 30 per cent contribution (Rs 7,313 crore) from the Telangana government, 18 per cent (Rs 4,230 crore) from the Centre, and 48 per cent (Rs 11,693 crore) through external loans. The remaining 4 per cent (Rs 1,033 crore) is expected to be raised via public-private partnership (PPP) investments.

Officials noted that nearly 10 per cent of the Centre’s capital expenditure was left unutilized last year, potentially increasing the likelihood of project approval. “Following the passage of appropriation bills, revised estimates will be reviewed. While revenue expenditure faces constraints, capital investments, particularly in infrastructure, continue to receive priority,” they explained.

Hyderabad Metro Rail Phase II aims to enhance connectivity across key corridors, including:

Nagole to Shamshabad RGIA (Airport Corridor): 36.8 km

Raidurg to Kokapet Neopolis: 11.6 km

MGBS to Chandrayangutta (Old City Corridor): 7.5 km

Miyapur to Patancheru: 13.4 km

LB Nagar to Hayatnagar: 7.1 km

In a recent precedent, Chennai Metro Phase II secured central approval in October last year, setting an encouraging example for similar projects.