Union Parliamentary Affairs Minister Kiren Rijiju announced on Thursday, 16 July 2026 that the Union Cabinet, under the leadership of Prime Minister Narendra Modi, has approved the development of a 6/4-lane elevated corridor along the Varuna River Bank in Uttar Pradesh, including ramps and loops, at a total capital cost of ₹10,998.32 crore. The project will be executed on the Hybrid Annuity Model (HAM).

Context

Rijiju shared the Cabinet decision on X, writing: 'Under the leadership of Hon'ble PM Shri Narendra Modi ji, the Union Cabinet approves the development of a 6/4-lane elevated corridor along the Varuna River Bank, including ramps and loops, in Uttar Pradesh on Hybrid Annuity Model at a total capital cost of ₹10,998.32 crore.' The Varuna River is a tributary of the Ganga flowing through Varanasi district in eastern Uttar Pradesh, one of India's most congested urban corridors.

Varanasi, a city of significant religious and commercial importance, has long faced acute traffic congestion along river-adjacent roads. An elevated corridor along the Varuna River Bank is intended to ease surface-level gridlock and improve freight and passenger movement through the city.

Policy Backdrop

The project falls within the broader ambit of Bharatmala Pariyojana, launched in 2015, which targets the development of approximately 34,800 km of national highways, including elevated urban corridors in high-density zones. Uttar Pradesh has been a priority state under this programme given its population density and its position on the Delhi–Kolkata freight corridor.

The Hybrid Annuity Model, adopted by the Union Cabinet in 2016, is a public-private partnership structure under which the government funds 40 per cent of the project cost during construction, with the private developer recovering the remaining investment through annuity payments over the concession period. HAM was introduced to revive highway development after the earlier Build-Operate-Transfer model encountered sustained failures due to traffic-risk uncertainty.

Stakeholders and Impact

Varanasi commuters and logistics operators stand to benefit most directly from the corridor, which will reduce travel time along one of the city's most congested stretches. The project is also expected to generate construction employment and stimulate ancillary economic activity in eastern Uttar Pradesh.

For highway developers and infrastructure financiers, the HAM structure limits traffic-risk exposure and provides a predictable revenue stream, making the project attractive for private participation. Uttar Pradesh's infrastructure pipeline has grown substantially in recent years, and this approval adds a significant urban-mobility component to that portfolio.

What's Next

Following Cabinet approval, the next procedural steps will include issuance of a Request for Qualification and subsequently a Request for Proposal to shortlist and select a private concessionaire. Land acquisition in Varanasi district will be a critical determinant of project timelines, as urban elevated corridors typically require clearances across multiple jurisdictions.

With the Cabinet sanction now in place, the project moves into the tendering phase. Its execution will be closely watched as a test of the Centre's ability to deliver large-scale urban infrastructure in one of India's most symbolically and commercially significant cities.