Bhubaneswar: The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved the widening and strengthening of National Highway-326 in Odisha, a major infrastructure push aimed at transforming connectivity and economic prospects in the state’s southern districts.
The project involves upgrading the existing 2-lane highway to a 2-lane road with paved shoulders from Km 68.600 to Km 311.700 under the National Highways (Original) programme on Engineering, Procurement and Construction (EPC) mode. The total capital outlay for the project stands at ₹1,526.21 crore, including a civil construction cost of ₹966.79 crore.
The upgraded corridor will significantly benefit the districts of Gajapati, Rayagada and Koraput by making travel faster, safer and more reliable. At present, the Mohana–Koraput stretch of NH-326 suffers from sub-standard geometry, sharp curves, steep gradients and inadequate carriageway width, which restrict the safe movement of heavy vehicles and slow down freight transport. These constraints will be addressed through geometric improvements, pavement strengthening, removal of black spots and realignment of curves and gradients.
According to the government, the project will reduce travel time between Mohana and Koraput by an estimated 2.5 to 3 hours and shorten the distance by about 12.46 km. It will also lower vehicle operating costs and improve road safety, particularly in tribal and aspirational regions.
The upgraded NH-326 will enhance connectivity with major national and regional corridors, linking NH-26, NH-59, NH-16 and the Raipur–Visakhapatnam corridor. It will improve last-mile access to key infrastructure such as Gopalpur Port, Jeypore Airport and several railway stations. The corridor also connects important industrial and logistics hubs including JK Paper, NALCO, IMFA, Utkal Alumina, Vedanta, HAL and the Mega Food Park, along with educational and tourism centres such as the Central University of Odisha, Koraput Medical College, Taptapani and Rayagada.
The economic internal rate of return (EIRR) of the project is estimated at 17.95 per cent, reflecting strong socio-economic benefits despite a negative financial return, primarily due to significant travel-time savings, reduced operating costs and safety improvements.
Construction will be completed within 24 months from the appointed date for each package, followed by a five-year defect liability and maintenance period. The project is expected to generate substantial direct and indirect employment opportunities and boost allied industries such as construction materials, transport and equipment services.
Once completed, the NH-326 upgrade is expected to play a crucial role in stimulating industrial growth, promoting tourism, improving access to healthcare and education, and driving inclusive socio-economic development across southern Odisha and its inter-state links with Andhra Pradesh.
-OdishaAge
