Cabinet clears ₹20,688 crore highway projects in Maharashtra, Odisha

New Delhi: The Union cabinet on Wednesday approved road projects worth ₹20,688 crore, including the country's largest ever highway project under the build-operate-transfer (BOT) model, a greenfield 374-km Nashik-Solapur-Akkalkot corridor in Maharashtra, a government release said.

Under this public-private partnership (PPP) model, the private player invests the required capital and maintains the infrastructure for a specified period, 20 years in this case. Over this period, the developer recovers the cost through toll levies before transferring ownership to the government.

This greenfield highway would entail a capital expenditure (capex) of ₹19,142 crore, the release said. The other project approved by the Cabinet is widening and enhancing the 206-km stretch of NH 326 in Odisha.

Addressing the media, minister for information & broadcasting Ashwini Vaishnaw said that based on the success of the concession agreement for the greenfield project, similar PPP initiatives may also be explored for other sectors.

“Nashik to Solapur project is the largest PPP-BOT based project in the highway sector. India has a deep experience of PPP model of development in highways,” the minister said. "All issues which have been witnessed in the past, including arbitration, risk sharing, uncertainty of cash flow, traffic projection, have been studied in detail. Basis that study, many new improvements have been done in the concession agreement. Fundamentally, the concession agreement now is much more risk-balanced."

Noting that payment terms and revenue projections have been carefully worked upon and better risk mitigation has been done in a bid to attract more investments, the minister said: "Once this model becomes successful here, then this can also be adopted in other infrastructure sectors like railways, transmission, ports, airports."

An official statement said the six-lane greenfield access-controlled Nashik-Solapur-Akkalkot project will provide connectivity to important cities in the region such as Nashik, Ahilyanagar, Solapur connecting to Kurnool, and it is a major step to facilitate integrated transport infrastructure development under the PM Gatishakti National Master Plan.

The Nashik-Akkalkot greenfield corridor is proposed to be connected to the Delhi-Mumbai Expressway near Vadhawan port interchange and Agra-Mumbai corridor at Nashik, and also provide connectivity from the west coast to east coast.

The other project cleared, widening and strengthening of the existing two-lane NH-326 to highway with paved shoulder, spanning 206.2km, entails ₹1,526.21 crore capex under the engineering, procurement and construction (EPC) mode. Paved shoulder refers to the hard-surfaced strip next to a road's primary travel lanes.

This highway upgrade will result in an overall development of southern Odisha, particularly benefiting the districts of Gajapati, Rayagada, and Koraput, the release said. The corridor connects towns including Mohana, Rayagada, Laxmipur, and Koraput, providing improved intra-state connectivity and enhancing inter-state linkage with Andhra Pradesh through the southern end of NH-326.

Data from the road transport and highways ministry shows India has a total of 146,560km of national highways, with 4,612km constructed in FY26 as of 30 November.

According to experts, the outlook on highways and toll roads is stable for the coming financial year.

Rajashekar Reddy, assistant vice-president & sector head for road and highways at Icra Ltd said: “The outlook on toll road sector remains stable, paving the way for sustained growth in FY2027. Icra projects the vehicular traffic growth to witness y-o-y growth of 3-4% in FY2027 compared to expectation of growth in vehicular traffic of 4-5% in FY2026 amid increased economic activity and low base effect.”

On toll collection prospects, he said that growth is expected to improve to 5-9% and 5-8% in FY26 and FY27, respectively, as against about 6% in FY25. "On the back of healthy toll collections and benign O&M (operation and maintenance) costs, the debt coverage metrics for BOT toll road projects are expected to remain adequate," Reddy added.