Hyderabad Metro Rail on Tuesday snapped its consultancy contract with Delhi Metro Rail Corporation, a move, which comes close on the heels of Andhra government taking a tough stand against the DMRC managing director E Sreedharan who has questioned the viability of the project.

"The letter by DMRC managing director Sreedharan was completely baseless and Andhra Pradesh government has taken serious note of it. We have snapped our association with DMRC on Tuesday on mutual consent," Hyderabad Metro Rail managing director NVS Reddy said.

While Sreedharan could not be reached for comments, a DMRC spokesperson said the firm was unaware of any such developments.

Last week, Sreedharan had questioned the viability of running a metro rail network under build-operate-transfer (BOT) mode.

In his letter to Planning Commission deputy chairman Montek Singh Ahluwalia, Sreedharan had alleged that the example of Hyderabad Metro as a successful BOT operation was misleading and it could "lead to a big political scandal". "As a consultant, his (Sreedharan's) role is to protect our interest, but unfortunately he is not doing so. Therefore, we have decided to cut all our links with DMRC," Reddy said. Taking a serious note of allegation by Sreedharan, Andhra Pradesh government had asked the DMRC MD for an unconditional apology. In a strongly-worded letter to Sreedharan on Monday, principal secretary (municipal administration) and Hyderabad Metro Rail Ltd (HMR) chairman C V S K Sarma threatened to take legal measures for defamation.

“You have made certain unfounded allegations and insinuations and talked about your smelling a political scam in your letter. This has caused enormous harm to the reputation of Government of Andhra Pradesh,” Sarma said in the letter to Sreedharan.