Larsen & Toubro (L&T) has secured a major metro construction contract in Noida worth between ₹1,000 crore and ₹2,500 crore, even as the infrastructure giant prepares to exit its investment in Hyderabad Metro amid mounting financial losses. The latest development highlights the company's continued involvement in metro infrastructure projects despite its decision to withdraw from the Hyderabad Metro operations.
According to a statement issued by L&T on Monday, the company has been awarded the contract for the Noida Metro Aqua Line Extension project. The work involves constructing a 15.1-kilometre elevated viaduct along with 10 metro stations.
The project is expected to be completed within 36 months. The contract adds another significant metro infrastructure assignment to L&T's portfolio, while the company is simultaneously working towards transferring its Hyderabad Metro stake to the Telangana government.
L&T's Hyderabad Metro Exit After Heavy Losses
L&T's decision to withdraw from Hyderabad Metro comes after the project accumulated financial losses of approximately ₹6,600 crore. The company had invested in the Hyderabad Metro project, undertaken its construction and managed its operations under a public-private partnership (PPP) arrangement.
Under this model, L&T carried substantial financial responsibilities, including debt-related commitments and risks associated with passenger revenue. These factors contributed to the financial challenges surrounding the Hyderabad Metro project.
The Telangana government is now preparing to take over L&T's stake in the existing metro network, while also considering the future expansion of the city's metro infrastructure.
Different Business Models in Noida and Hyderabad
The newly secured Noida Metro contract operates under a different financial arrangement compared with L&T's Hyderabad Metro investment.
In Hyderabad, the company participated as an investor, constructor and operator under a long-term PPP structure. In contrast, the Noida assignment is primarily a construction contract, without similar long-term operational responsibilities.
This difference is significant because it allows L&T to continue participating in large-scale metro infrastructure development without taking on the same level of long-term financial and passenger revenue exposure associated with its Hyderabad investment.
Questions Over Hyderabad Metro's PPP Model
The contrasting developments have brought renewed attention to the financial sustainability of Hyderabad Metro's original PPP model. L&T's exit leaves the Telangana government responsible for addressing the financial implications of the existing arrangement and determining the next phase of the network's development.
While L&T continues to secure metro construction opportunities in other cities, Hyderabad's experience highlights the financial complexities involved in developing and operating major urban transport projects through public-private partnerships.
The Noida contract marks a fresh infrastructure opportunity for L&T, even as the Hyderabad Metro transition remains a significant financial and administrative challenge for Telangana.
