Union Road Transport and Highways Minister Nitin Gadkari on Wednesday announced that the Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the construction of a new coastal highway connecting Rameshwar to Paradeep in Odisha under the Hybrid Annuity Model (HAM). The greenfield corridor will be built in two packages covering 160.18 km at an estimated capital cost of ₹8,300.79 crore.

Context

In his post on X, Gadkari said the alignment will pass through the districts of Khurda, Puri, Kendrapada and Jagatsinghpur. He noted that the existing road network in the region, including NH-16 — a stretch of the Golden Quadrilateral — is already a six-lane corridor connecting major urban centres such as Khordha, Bhubaneswar and Cuttack.

The minister framed the new coastal route as a complementary corridor, designed to serve freight movement to and from Paradeep port while easing pressure on the existing inland trunk route. The HAM structure, he indicated, will allow the project to move forward with shared risk between the government and private concessionaires.

Policy backdrop

Gadkari said the project 'aligns with the principles of PM GatiShakti' and is expected to enhance connectivity to nine Economic Nodes and five Logistic Nodes, thereby contributing positively to the country's Logistics Performance Index (LPI).

The PM GatiShakti national master plan, launched in October 2021, was conceived to coordinate infrastructure planning across ministries and link transport assets to economic zones. The Hybrid Annuity Model, introduced in 2016, was designed to revive stalled highway projects by combining engineering-procurement-construction features with annuity payments, lowering the financing burden on private players.

Coastal and port-linked corridors have been a recurring priority since the approval of Bharatmala Pariyojana in 2015, which earmarked dedicated funding for economic corridors, coastal roads and port connectivity. The Rameshwar-Paradeep alignment fits within that lineage, layering a new freight-friendly route alongside legacy arteries like the Golden Quadrilateral, whose original Odisha leg dates back to the National Highways Development Project launched in 1998.

Stakeholders and impact

Gadkari said that once completed, the highway is expected to reduce travel time between Rameshwar and Paradeep by approximately two hours and 30 minutes, and provide 'safe, fast, and seamless connectivity for both passenger and freight traffic'. He added that the project is anticipated to deliver 'significant reductions in fuel consumption, carbon emissions, and vehicle operating costs (VOC)'.

The primary beneficiaries are likely to be freight operators routing cargo through Paradeep, one of the east coast's busiest ports, along with Odisha-based logistics firms and industrial clusters in Jagatsinghpur and Kendrapada. Passenger traffic between the temple-tourism belt around Puri and the industrial corridor near Paradeep is also expected to gain from a dedicated coastal route.

For the Odisha state administration, the project adds a major central investment in coastal districts that have historically depended on a single arterial spine. It also dovetails with broader plans to integrate port hinterlands with manufacturing and mineral-export clusters.

What's next

Attention will now shift to tendering for the two HAM packages, land acquisition across the four listed districts and statutory environmental clearances — typically the slowest steps in greenfield coastal highway construction. The pace at which the National Highways Authority structures the concession agreements will determine when actual construction can begin.

Equally significant will be how the Rameshwar-Paradeep corridor is sequenced with parallel investments at Paradeep port and possible rail linkages under the GatiShakti umbrella. If those threads are stitched together, the new highway could mark another step in the government's continuing push to drive down logistics costs and lift India's standing on the Logistics Performance Index.