Kerala government to shoulder ₹1,629 crore for outer ring road project in capital

Kerala government shoulders ₹1,629.24 crore liability for outer ring road project, boosting economic development in the region.

Giving a major boost to the proposed Outer Ring Road (ORR) project under the Capital Region Development Programme, the Kerala government has decided to shoulder a liability of ₹1,629.24 crore for the construction of the ORR from Vizhinjam to Navaikulam in Thiruvananthapuram.

The delay in reaching a consensus on cost-sharing for land acquisition for the project, including main carriageways and service roads, between the Kerala government and the Centre was impeding the progress of the project.

The Cabinet meeting held on Wednesday (August 7, 2024) ratified the cost-sharing agreement as sought by the Centre. A draft quadripartite agreement involving the Kerala Infrastructure Investment Fund Board (KIIFB), the National Highways Authority of India (NHAI), Capital Region Development Project-II (CRDP) and the Public Works department has been approved by the Cabinet with riders for the development of a 45-metre-wide road.

The ORR is conceived as a state-of-the-art road corridor which is largely a greenfield alignment that connects the Vizhinjam port on the southern end and Kallamballam Junction on NH-66 leading to Mangalapuram junction and Kollam towards the northern end.

The KIIFB will provide the 50% of the cost (about ₹930.41 crore) required for the land acquisition. Around ₹477.33 crore required for the construction of service roads will be met from the scheme of MIDP (Major Infrastructure Development Projects) and the amount has to be repaid by the State government to the NHAI within 5 years. Apart from this, the Kerala government will forego the State share of the goods and services tax (GST) pegged at around ₹210.63 crore and a royalty of ₹10.87 crore to be levied on the construction materials.

The State has also made it clear that the construction materials exempted from paying the royalty can be used only for the construction of this stretch of the national highway. A joint team of engineers appointed by the NHAI and the geologist deputed by the district administration concerned should certify the quantity of products to be exempted from royalty. The GST share of the State will be given as a grant to NHAI. 

The proposed ORR is expected to bring in huge economic development in the underutilised region through which the new national highway passes when the all-weather Vizhinjam International Deepwater Multipurpose Seaport is commissioned. The port has begun limited-scale operations on a trial basis as of July 12.