GVMC approves Annuity Payout model for 88km road upgrade

The Greater Visakhapatnam Municipal Corporation (GVMC) council has approved the implementation of the ‘Annuity Payout Model’ for the development and maintenance of 88.35 km of roads within the corporation limits, announced Commissioner Ketan Garg in a release on Wednesday

He said: “With an estimated project cost of ₹307 crore, the model will ensure consistency in road quality, uniformity in construction, and timely completion of works, while reducing expenditure and improving financial efficiency for the GVMC.”

Mr. Garg said that the new model is being introduced in Visakhapatnam city for the first time and offers significant advantages. It will replace the present system where multiple contractors are awarded small individual works. Under the Hybrid Annuity Model (HAM) the entire project will be assigned to a single, large contractor, ensuring consistency, quality and uniformity in road design.

Currently, the GVMC spends approximately ₹90 crore annually on road maintenance, with frequent tendering. The Annuity Payout Model will attract reputed contractors who can deliver high-quality results without delays caused by multiple tendering. Similar projects have been successfully implemented in Hyderabad and Thiruvananthapuram.

“The project will cover major roads 40 feet wide or more. The work scope includes road resurfacing, development of the central median, greenery development, and the provision of various urban amenities.”

The roads selected under the Annuity Payout Model are in zone II (31.61 km), zone III (14.24 km), zone IV (8.65 km), zone V (3.70 km), and zone VI (30.15 km). Selection of the zones was based on technical feasibility, traffic density, and strategic importance, covering key, major, arterial, and VVIP movement corridors, he said.

The bidder’s scope includes Capital Expenditure (CapEx) for project components such as lighting, utility ducts, CCTV cameras, dustbins, benches, safety equipment, major junction development, bio-toilets, parking, way-finding systems, and bus shelters.

Operation and Maintenance (O&M) responsibilities will encompass mechanical sweeping, drainage cleaning, pothole repairs, landscaping, street light maintenance, road marking, maintenance of road and street furniture, and civil and electrical maintenance of junctions.

As per the GVMC officials, works must be completed within one year, after which the contractor maintain the roads for 10 years. Revenue generated from advertisements and other streams will be adjusted against the Annuity Payments.

The Andhra Pradesh Urban Infrastructure Asset Management Limited (APUIAML) will provide Transaction Advisory and Independent Engineer Consultancy services to the GVMC for this project.