The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved a major road infrastructure project in Odisha, aimed at improving travel and boosting economic activity in the state’s southern districts. The project involves the widening and strengthening of National Highway-326 under the engineering, procurement and construction (EPC) mode.
The approved work covers a stretch from km 68.600 to km 311.700 of NH-326, running through Gajapati, Rayagada and Koraput districts.
The existing two-lane road will be upgraded to a two-lane highway with paved shoulders, making travel safer and more efficient. The total project cost has been pegged at Rs 1,526.21 crore, including Rs 966.79 crore for civil construction, according to the Cabinet Committee on Economic Affairs (CCEA).
At present, the Mohana–Koraput section of NH-326 suffers from poor road geometry, narrow carriageways, sharp curves and steep gradients. These issues make it difficult for heavy vehicles to move safely and slow down the transport of goods to ports and industrial hubs.
The Cabinet noted that the upgrade will fix these problems through geometric corrections, pavement strengthening, and the removal of accident-prone black spots, allowing smoother and uninterrupted traffic flow.
Faster travel, lower costs
Once completed, the improved highway is expected to reduce travel time and vehicle operating costs, while also improving road safety. The upgrade will help increase freight movement and make passenger travel more reliable across the region.
Officials said the project would play a key role in the overall development of southern Odisha, especially in tribal and aspirational areas.
The upgraded NH-326 will offer better connectivity to major national highways such as NH-26, NH-59 and NH-16, and strengthen links to the Raipur–Visakhapatnam corridor. It will also improve last-mile access to key infrastructure including Gopalpur port, Jeypore airport, and nearby railway stations.
Boost for industry, education and tourism
The corridor connects several important industrial and logistics centres, including JK Paper, NALCO, IMFA, Vedanta, Utkal Alumina, HAL and a Mega Food Park. It also links major education and tourism hubs such as the Central University of Odisha, Koraput Medical College, Taptapani and Rayagada.
Improved connectivity is expected to benefit local businesses, educational institutions and tourism destinations by improving access to markets, healthcare and employment opportunities. The construction work is planned to be completed within 24 months from the appointed date for each package. This will be followed by a five-year defect liability and maintenance period, making the total contract engagement seven years.
