The Telangana government is planning to upgrade about 100 km of key roads into four-lane corridors under the hybrid annuity model, including a 43 km stretch between Bhongir on NH 163 and Chityal on NH 65 to improve connectivity between the Warangal and Vijayawada highways. Other proposed stretches include Medchal–Shamirpet and Dundigal–Medchal, each around 10 km and running parallel to the Outer Ring Road, the 15 km Hayathnagar–Anajpur road cutting through the ORR, and a 10 km stretch from Hayathnagar to Taramatipet via Kuntloor.

A senior Roads and Buildings Department official said these roads are planned to be developed into four-lane carriageways with a central median under the hybrid annuity model. Sources said that out of the 29,000 km road network under the R&B Department, around 12,000 km is being developed on the National Highways model through HAM, without imposing toll charges on commuters.

Phase One of the flagship road widening, strengthening and maintenance programme has already been sanctioned. In this phase, 419 roads spanning 5,824.27 km have been grouped into 32 packages, with an approved project cost of Rs 113.99 billion. Under the model, the government pays 40 per cent of the project cost during the construction period in 10 equal instalments of 4 per cent each, linked to physical progress at different stages.

The remaining 60 per cent of the project cost is paid over a 15-year operation and maintenance period in the form of annuities, disbursed every six months. These payments include provisions for price escalation, interest and other applicable costs as per the concession agreement. The concessionaire is responsible for funding construction and maintaining the roads in specified condition throughout the concession period.

Amid demands from contractors for relaxations, the Telangana government is examining best practices adopted in other states. Contractors have sought permission to submit insurance surety bonds instead of bank guarantees, a financial instrument increasingly used in National Highways Authority of India projects as a cost-effective alternative for bid and performance security. In Andhra Pradesh, a letter of credit mechanism is being implemented to ensure timely payments to contractors for completed work.

Deputy Chief Minister Mallu Bhatti Vikramarka is expected to review the matter with Roads and Buildings Department officials on December 18.