Cabinet approves Rs 1,526 crore NH-326 upgrade

Cabinet clears Rs 1,526 crore NH-326 upgradation project in Odisha
The Union Cabinet 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, a move aimed at improving connectivity and accelerating economic development in the state’s southern districts.
The project involves upgrading the existing two-lane road to a two-lane highway with paved shoulders from km 68.600 to km 311.700 on NH-326, covering the Mohana–Koraput section. The work will be executed under the Engineering, Procurement and Construction (EPC) mode. Of the total outlay, Rs 966.79 crore will be spent on civil construction.
According to the government, the upgradation will significantly improve travel safety, speed and reliability, particularly benefiting the districts of Gajapati, Rayagada and Koraput. The improved corridor is expected to enhance access to markets, healthcare, education and employment opportunities, contributing to inclusive growth in southern Odisha, including tribal and aspirational areas.
At present, the Mohana–Koraput stretch of NH-326 suffers from sub-standard geometry, narrow carriageway width, sharp curves and steep gradients, which constrain the safe and efficient movement of heavy vehicles. The project will address these deficiencies through geometric improvements such as curve realignments and gradient corrections, removal of accident-prone black spots, and pavement strengthening. These measures are expected to enable smoother freight and passenger movement and reduce vehicle operating costs.
Once upgraded, NH-326 will provide improved connectivity to major economic and logistics corridors, linking with NH-26, NH-59, NH-16 and the Raipur–Visakhapatnam corridor. It will also improve last-mile access to Gopalpur port, Jeypore airport and several railway stations. The corridor connects important industrial units including JK Paper, NALCO, IMFA, Utkal Alumina, Vedanta and HAL, as well as education and tourism hubs such as the Central University of Odisha, Koraput Medical College, Taptapani and Rayagada.
The project is targeted for completion within 24 months from the appointed date for each package, followed by a five-year defect liability and maintenance period. Implementation will involve the use of modern construction and quality assurance technologies, including precast structures, reinforced-earth walls and advanced monitoring tools such as drone mapping and Network Survey Vehicles.
Officials said the project is expected to generate substantial direct and indirect employment during the construction and maintenance phases, while also boosting local industries linked to construction materials, transport and services. Declared as NH-326 in 2012, the highway plays a crucial role in connecting southern Odisha with neighbouring Andhra Pradesh, and the approved upgradation is seen as a major step towards strengthening regional connectivity and socio-economic development.
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