New Delhi, Dec 31: The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the widening and strengthening of the Mohana–Koraput section of National Highway (NH-326) in Odisha, officials said on Wednesday.  

The project, to be executed on EPC mode, involves upgrading the existing 2-lane stretch with paved shoulders from Km 68.600 to Km 311.700 at a capital cost of Rs 1,526.21 crore.

Financial Outlay

The sanctioned cost includes ₹966.79 crore for civil construction. The project is expected to be completed within 24 months, followed by a five-year defect liability period, making the total contract engagement seven years.

Benefits to Southern Odisha

The upgradation will significantly improve travel safety, reliability, and speed, particularly benefiting the districts of Gajapati, Rayagada, and Koraput. Enhanced connectivity will support local communities, industries, educational institutions, and tourism centres by improving access to healthcare, markets, and employment opportunities.

Corridor Development

Currently, the Mohana–Koraput stretch suffers from sub-standard geometry, deficient curves, and steep gradients, restricting safe movement of heavy vehicles. The project will correct these deficiencies, remove black spots, and strengthen pavements. It will also link NH-326 with major corridors such as NH-26, NH-59, NH-16, and the Raipur–Visakhapatnam route, improving last-mile access to Gopalpur port, Jeypore airport, and key railway stations.

Industrial hubs like JK Paper, NALCO, Utkal Alumina, Vedanta, and HAL, along with educational and tourism centres such as Koraput Medical College and Taptapani, are expected to benefit from faster freight movement and reduced travel time.

Economic and Social Impact

Economic analysis indicates an EIRR of 17.95%, driven by travel-time savings of 2.5–3 hours and reduced vehicle operating costs. Though the FIRR is negative (-2.32%), the project’s justification lies in its social and non-market benefits. Construction and maintenance activities are expected to generate substantial employment opportunities for skilled and unskilled workers, while boosting local industries supplying materials and services.

Officials said the initiative reflects the government’s commitment to inclusive growth in tribal and aspirational districts, ensuring better connectivity between Odisha and neighbouring Andhra Pradesh.