Cabinet Approves ₹1,526 Cr Upgradation of NH-326 to Boost Connectivity in Odisha

The Mohana–Koraput section of NH-326 currently suffers from sub-standard geometry, including intermediate-lane stretches, deficient curves, and steep gradients.

 

The Union Cabinet, chaired by Prime Minister Shri Narendra Modi, has approved the widening and strengthening of National Highway-326, upgrading the existing 2-lane section to a 2-lane highway with paved shoulders from Km 68.600 to Km 311.700 in Odisha. The project will be taken up under NH(O) on the Engineering, Procurement, and Construction (EPC) mode.

This strategic highway improvement is poised to transform connectivity across southern Odisha, particularly benefiting the districts of Gajapati, Rayagada, and Koraput—regions with high tourism, tribal populations, and emerging industrial activity.

Financial Outlay

• Total capital cost: ₹1,526.21 crore

• Civil construction cost: ₹966.79 crore

The investment reflects the Government’s commitment to building high-quality transport infrastructure in aspirational and underserved regions.

Why Upgrading NH-326 Matters

The Mohana–Koraput section of NH-326 currently suffers from sub-standard geometry, including intermediate-lane stretches, deficient curves, and steep gradients. These limitations:

• Restrict movement of heavy vehicles

• Reduce freight throughput to key ports and industrial hubs

• Impair safety and increase travel time

The upgradation will correct these constraints by:

• Improving geometry through realignment of curves and gradients

• Removing black spots

• Strengthening pavement

• Adding paved shoulders for safer travel

The overall outcome will be faster, safer, and more reliable movement of goods and passengers.

Enhanced Connectivity to Key Economic Corridors

Once upgraded, the corridor will provide seamless connectivity to major highways and logistics nodes including:

• NH-26, NH-59, NH-16, and the Raipur–Visakhapatnam corridor

• Gopalpur Port, Jeypore Airport, and multiple railway stations

• Industrial hubs such as JK Paper, Mega Food Park, NALCO, IMFA, Utkal Alumina, Vedanta, HAL

• Educational and tourism landmarks including Central University of Odisha, Koraput Medical College, Taptapani, and Rayagada

The improvements are expected to reduce travel time by 2.5–3 hours and cut distance by around 12.46 km, significantly reducing vehicle operating costs.

Economic analysis shows an EIRR of 17.95%, justifying the project’s public value despite a negative FIRR (-2.32%)—reflecting strong social and developmental benefits.

Implementation Strategy

The project will be implemented on the EPC mode with an emphasis on modern, high-quality construction practices. Contractors will adopt advanced technologies including:

• Precast box structures and drains

• Precast RCC/PSC girders for bridges

• Precast crash barriers and friction slabs

• Cement-Treated Sub-Base (CTSB) layers

Monitoring will be supported by:

• Network Survey Vehicle (NSV) assessments

• Periodic drone mapping

• Real-time tracking via Project Monitoring Information System (PMIS)

• Day-to-day oversight by an Authority Engineer

The construction period for each package is 24 months, followed by a 5-year defect liability/maintenance period, making it a 7-year contract cycle.

Employment and Regional Development Impact

The project will significantly boost the socio-economic landscape of southern Odisha by:

• Accelerating industrial growth and freight efficiency

• Supporting tourism development in scenic and tribal regions

• Enhancing access to healthcare and education

• Strengthening inter-state connectivity with Andhra Pradesh

• Creating large-scale employment for skilled, semi-skilled, and unskilled workers

Local industries involved in construction materials, transport, logistics, and equipment maintenance will also benefit, creating a ripple effect across the regional economy.

A Major Step Toward Inclusive Growth in Southern Odisha

By improving mobility, reducing travel time, and enabling safer road conditions, the NH-326 upgradation will unlock new opportunities for trade, tourism, and tribal-area development—supporting the Government’s vision of inclusive, sustainable and regionally balanced growth.