Hyderabad Metro: Fare Hike Amid Rs 625 Crore Loss

Hyderabad Metro: Fare Hike. The Hyderabad Metro Rail, run by L&T Metro Rail Hyderabad (L&TMRH), is set to raise fares, having delayed the hike by two years. L&TMRH Managing Director and CEO K.V.B. Reddy has assured that there is indeed a possibility of fare revision, although not declaring the percentage. Operating expenses have risen by 160% while cumulative losses are at ₹6,598 crore, plunging the company into financial trouble.

Debt Burden and Pandemic Impact

The metro venture, even after debt restructuring, is still reeling from financial difficulties. The cost of loans has risen to 7.5–8%, putting further pressure. The Covid-19 pandemic accelerated the problem, raising the possibility of becoming a non-performing asset (NPA). L&T has been pouring ₹1,000 crore every year into the metro system to pay interest, but that is not enough.

Revenue Challenges and Fare Fixation

Annual income from fare revenue and monetization of real estate is ₹1,400 crore. With just eight million square feet of the allowed 18.5 million square feet monetized, financial stability has not been achieved. Fares on tickets, fixed between ₹10 and ₹60 since the metro’s opening seven years ago, have not been updated. The company has recommendations from the Centre-appointed Fare Fixation Committee (submitted in 2023), which may inform future changes.

Acute Requirement for New Train Sets
Apart from fare hikes, L&TMRH also has an acute requirement to acquire new train sets. Leasing alternatives from other metro networks, including Nagpur, failed to materialize. With increasing commuters’ demand, the firm has concluded an indigenous supplier to provide ten new train sets. Each set consisting of three coaches will cost approximately ₹400–₹450 crore, with a preliminary tender for five sets already in process.

Projected Growth and Future Plans

It will take about 15 months after signing for the new trains to be ready. Currently, Hyderabad Metro Rail operates 57 train sets on three congested corridors of 69.2 km. The ₹21,000 crore venture plans to achieve a break-even by 2033 with a projected daily ridership of 7–7.5 lakh passengers.

Managing Passenger Load Effectively
Weekday ridership is an average of 4.75 lakh, reducing to 3.5 lakh during weekends. The metro runs over 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). The authorities assure passengers that the present fleet can handle additional passengers if rules of travel are adhered to, like moving within the coaches and not clogging up at doors.

Also Read: Finance: Hyderabad Metro Rail Reports ₹625 Crore Loss

With costs piling up, Hyderabad Metro Rail’s fare increase appears unavoidable as it tries to ensure quality of service and improve the convenience of commuting.