The Cabinet Committee on Economic Affairs (CCEA) approved major national highway development projects in Madhya Pradesh and Bihar on June 3, 2026, with a total investment of ₹8,351.65 crore. These projects, covering a combined length of 377.18 kilometres, aim to address severe traffic bottlenecks and improve regional road safety. The expansion will be executed using public-private partnership models, including the Hybrid Annuity Mode (HAM) and Build-Operate-Transfer (BOT) Toll frameworks.
Overview of the Approved Highway Projects
The national highway expansions are strategically aligned with the PM Gati Shakti National Master Plan to improve multi-modal connectivity across central and eastern India. By upgrading these corridors, the government aims to link key agricultural, industrial, and tourist nodes to regional transport hubs.
The two projects differ in terms of their length, cost, and execution models, tailored to the specific traffic demands and financial structures of the regions:
| Project Detail | Madhya Pradesh Corridor | Bihar Corridor |
|---|---|---|
| National Highway | NH-347B | NH-31 and NH-231 |
| Length (km) | 233.65 | 143.53 |
| Approved Cost | ₹4,415.60 crore | ₹3,936.05 crore |
| Implementation Model | Hybrid Annuity Mode (HAM) | Build-Operate-Transfer (BOT-Toll) |
| Bypass Construction | 16.20 km (Khargone Bypass) | 6.73 km (Purnea Bypass) |
Madhya Pradesh: Upgradation of National Highway 347B
The approved project in Madhya Pradesh involves the development of a 233.65-kilometre corridor on National Highway 347B (NH-347B). This project covers the districts of Betul, Khandwa, Khargone, and Barwani, which include several tribal and aspirational areas. The initiative is split into two major segments to optimize regional transport efficiency:
- Upgradation of the 125.01-km Hiwarkhedi, Roshni, Ashapur, and Rudhy section from an intermediate lane standard to a two-lane standard with paved shoulders.
- Widening of the 108.64-km Deshgaon to Julwaniya section from a two-lane highway to a four-lane standard.
To ease traffic congestion in urban areas, a 16.20-km Greenfield bypass will be constructed around Khargone city. The project will connect six economic nodes, such as textile, food, and industrial parks, as well as five major logistics nodes, including the airports at Indore and Nagpur and critical railway stations at Betul and Khandwa. The construction phase is expected to generate 19.5 lakh direct person-days and 23 lakh indirect person-days of employment.
Bihar: Four-Laning of NH-31 and NH-231
In Bihar, the CCEA approved the upgradation and widening of a 143.529-kilometre stretch covering parts of National Highway 31 (NH-31) and National Highway 231 (NH-231) to a four-lane standard. Spanning the districts of Khagaria, Bhagalpur, Katihar, and Purnea, this corridor forms a critical segment of the Patna-Purnea route. The estimated capital cost of the project is ₹3,936.05 crore.
As part of the project, a 6.729-km greenfield bypass will be constructed around Purnea city to alleviate urban traffic bottlenecks. Under the PM Gati Shakti framework, the corridor connects five economic nodes (including a textile cluster, two mega food parks, and two fish and seafood parks) and 11 logistics nodes, such as railway stations and Purnea Airport. The project is designed to reduce the travel time along the corridor to approximately two hours, improve road safety, and lower vehicle operating costs.
Understanding HAM and BOT-Toll PPP Models
The execution of these projects leverages two distinct Public-Private Partnership (PPP) models: the Hybrid Annuity Mode (HAM) and the Build-Operate-Transfer (BOT) Toll mode. These models allocate financial risk and responsibilities differently between the government and private developers.
Hybrid Annuity Mode (HAM)
Introduced in 2016 to revive private participation in highway projects, HAM is a combination of the government-funded EPC (Engineering, Procurement, and Construction) model and the private-funded BOT model. Under HAM, the government, through the National Highways Authority of India (NHAI), provides 40% of the project cost in installments linked to construction milestones. The private developer finances the remaining 60% through equity and debt. The government collects the toll and makes fixed biannual annuity payments to the developer to cover their investment, interest, and maintenance costs, completely absorbing the traffic volume risk.
Build-Operate-Transfer (BOT-Toll) Model
Under the BOT-Toll model, the private developer is responsible for the entire financing, construction, operation, and maintenance of the highway section. The developer recovers their investment and earns profits by directly collecting toll revenues from vehicles using the road during a designated concession period. Since the developer collects the tolls directly, the developer bears the complete traffic volume and revenue risk. The government has recently revived this model for projects with high traffic density and assured viability, reducing direct financial strain on the public exchequer.
The Cabinet Committee on Economic Affairs (CCEA)
The Cabinet Committee on Economic Affairs (CCEA) is one of the key standing committees of the Union Cabinet in India. It is chaired by the Prime Minister of India and consists of senior cabinet ministers holding key portfolios such as Finance, Home Affairs, Defence, and Road Transport.
Established under the Government of India (Transaction of Business) Rules, 1961, which are framed under Article 77 of the Indian Constitution, the CCEA is an extra-constitutional body. Its primary mandate is to review economic trends, formulate consistent policy frameworks, and approve major public sector investment proposals, particularly those exceeding the financial threshold of ₹1,000 crore. By delegating detailed economic evaluations to this subset of the cabinet, the government ensures rapid and highly coordinated decision-making.
Key Takeaways
- The Cabinet Committee on Economic Affairs (CCEA) approved highway development projects in Madhya Pradesh and Bihar on June 3, 2026, with a total investment of ₹8,351.65 crore.
- The Madhya Pradesh project covers 233.65 kilometres of National Highway 347B (NH-347B) and will be executed under the Hybrid Annuity Mode (HAM) at a cost of ₹4,415.60 crore.
- The Bihar project covers 143.529 kilometres of NH-31 and NH-231 under the Build-Operate-Transfer (BOT) Toll mode at an estimated cost of ₹3,936.05 crore.
- The approved projects include greenfield bypasses of 16.20 kilometres around Khargone city and 6.729 kilometres around Purnea city to resolve urban congestion.
- The Hybrid Annuity Mode (HAM) was introduced in 2016 as a public-private partnership framework where the government funds 40% of the project cost during construction.
- The CCEA is chaired by the Prime Minister of India and operates under the Government of India (Transaction of Business) Rules, 1961.
