While 40% of the project cost will be released during the 12-month construction period, the remaining will be paid over a 10-year Operations & Maintenance period through semi-annual annuities. File
| Photo Credit: V. RAJU
The Municipal Administration & Urban Development (MA&UD) Department on Saturday accorded administrative sanction for implementing two pilot projects in Visakhapatnam and Vijayawada, costing about ₹479 crore, under the first phase of the City Roads Improvement Program (CRIP).
MA&UD Principal Secretary S. Suresh Kumar said in a press release that the two cities would have 110-km of priority urban corridors — 88.54 km in Visakhapatnam costing ₹306.95 crore and 23.54 km in Vijayawada estimated to cost ₹171.14 crore, for which the Greater Visakhapatnam Municipal Corporation (GVMC) and Vijayawada Municipal Corporation (VMC) would notify their Requests for Proposals (RFPs) next week.
Overhaul of city roads
The CRIP is aimed at overhauling the condition of city roads across the State, with priority to quality, structural integrity, safety, and contractor accountability for a 10-year period, and it follows the Design-Build-Finance-Operate-Transfer (DBFOT) – Hybrid Annuity Model (HAM), which is widely regarded as one of the most efficient PPP structures for ensuring quality, transparency, and sustained asset maintenance.
Under HAM, 40% of the project cost will be released during the 12-month construction period against verified milestones and the balance 60% over a 10-year Operations & Maintenance (O&M) period through semi-annual annuities. This model incentivises the concessionaires to prioritise durable construction to reduce long-term maintenance liabilities.
The CRIP includes comprehensive and integrated redevelopment of streets, moving beyond road surface improvement to a full-scale transformation of the urban corridor ecosystem comprising capital and O&M works.
“The AP Urban Infrastructure Asset Management Limited has been appointed Independent Engineer for the CRIP,” Mr. Suresh Kumar said, adding that the RFP structure had been made contractor-friendly to encourage participation by both standalone and consortium-based bidders, including capable local firms.
Published – December 13, 2025 06:33 pm IST
