HYDERABAD: The estimated project cost of the northern segment of the Hyderabad Regional Ring Road (RRR) has significantly escalated beyond the initial estimates provided in the Detailed Project Report (DPR).
According to the DPR accessed by TNIE, the project was originally estimated at Rs 11,961.48 crore. However, due to delays in execution, the cost has now increased to approximately Rs 15,000 crore.
In 2018, the then BRS government proposed the RRR project with an initial budget of Rs 9,164 crore. After the Ministry of Road Transport and Highways (MoRTH) approved the proposal, a consultancy was appointed in 2022 to prepare the DPR, which was submitted in March 2023 with an updated cost estimate of Rs 11,961.48 crore. Since then, officials have revised the estimate to around Rs 15,000 crore due to rising material costs, particularly for cement and steel.
The northern section of the RRR extends from Sangareddy to Choutuppal, while the southern section runs from Choutuppal back to Sangareddy, with a total length of 158 kilometers. Approximately 1,900 hectares of land will be required for the project. As per the DPR, the northern segment is to be executed in six packages, designed for speeds of up to 120 km/h.
HAM or EPC Mode Suggested for RRR
The report also clarified that the project is not viable under the Build, Operate, Transfer (BOT) model.
The DPR states: “The equity Internal Rate of Return (IRR) of the project section for the maximum concession period and maximum grant in BOT mode is less than 15%, hence this project is not viable in BOT mode. Based on the IRR and Net Present Value (NPV) values from authority cash flows, the project shall be taken up in Hybrid Annuity Mode (HAM) or Engineering, Procurement, and Construction (EPC) mode. Hence, considering the regional development surrounding the Hyderabad area, it is suggested to take up [the project] in either HAM or EPC mode.”
If executed in HAM mode, projected revenues from the northern RRR segment are estimated at Rs 15,768.02 crore over 20 years starting from 2027 and Rs 9,485.84 crore for the following 15 years after 2027. These projections are based on calculated toll rates and projected revenue growth at an assumed vehicular growth rate of five percent.
