The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved the widening and strengthening of a key stretch of National Highway-326 in Odisha, at a total cost of Rs 1,526.21 crore.
The project involves upgrading the existing two-lane highway to a two-lane road with paved shoulders from kilometre 68.600 to kilometre 311.700, covering the Mohana–Koraput section of NH-326. The work will be implemented under the National Highways (Original) scheme on Engineering, Procurement and Construction (EPC) mode.
According to the Cabinet decision, the project includes a civil construction cost of Rs 966.79 crore and is aimed at improving road safety, reducing travel time, and enhancing connectivity in southern Odisha.
At present, the Mohana–Koraput stretch suffers from sub-standard road geometry, sharp curves, steep gradients and inadequate carriageway width, which restrict safe movement of heavy vehicles and increase logistics costs. The approved upgrade will address these deficiencies through geometric corrections, pavement strengthening and removal of accident-prone black spots.
Once completed, the improved highway is expected to reduce travel time between Mohana and Koraput by around 2.5 to 3 hours and shorten the distance by nearly 12.5 kilometres. The project has an estimated Economic Internal Rate of Return (EIRR) of 17.95 per cent, driven largely by time savings, lower vehicle operating costs and safety gains.
The upgraded corridor will enhance connectivity to major national highways including NH-16, NH-26 and NH-59, and improve access to key logistics and economic hubs such as Gopalpur Port, Jeypore Airport and several railway stations. It will also support faster movement of goods to coastal ports and industrial centres.
The project is expected to benefit the districts of Gajapati, Rayagada and Koraput by improving access to markets, healthcare, education and employment opportunities, particularly in tribal and aspirational regions of southern Odisha. Improved road infrastructure is also likely to boost tourism and industrial activity in the region.
Construction will be carried out using modern quality-assurance technologies, including precast structures, reinforced concrete girders, cement-treated sub-base layers and reinforced-earth wall systems. Progress and quality will be monitored through Network Survey Vehicles, drone mapping and the Project Monitoring Information System.
The work is targeted for completion within 24 months from the appointed date, followed by a five-year defect liability and maintenance period. The project is also expected to generate substantial direct and indirect employment during both construction and maintenance phases.
NH-326 was notified as a National Highway in August 2012 and connects several key towns in southern Odisha while providing an important link to neighbouring Andhra Pradesh.
