GVMC clears annuity model for 88 km road works

The Greater Visakhapatnam Municipal Corporation has approved the Annuity Payout Model for developing and maintaining 88.35 km of major roads across the city. Commissioner Ketan Garg announced the decision in a statement on Wednesday.

“The Rs 307-crore project will help us improve road quality, maintain uniform construction standards, and complete works on time,” Garg said. “The model will also reduce recurring expenditure and improve the corporation’s financial efficiency.”

He said Visakhapatnam is adopting the annuity system for the first time. The new approach replaces the current practice of awarding several small contracts for individual stretches. “By assigning the entire project to a single major contractor, we expect better consistency and fewer delays,” he said. GVMC now spends nearly ₹90 crore a year on road maintenance through repeated tendering.

Officials noted that Hyderabad and Thiruvananthapuram have already implemented similar systems with positive results.

The project covers roads with a minimum width of 40 feet. The selected stretches fall 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). Officials said the selection was based on traffic load, technical feasibility and the strategic importance of these corridors.

The contractor’s responsibilities include resurfacing, median development, greenery and urban amenities. Capital works will cover lighting, CCTV cameras, utility ducts, benches, dustbins, junction upgrades, bio-toilets, parking areas and bus shelters.

Maintenance for ten years will include sweeping, drainage cleaning, pothole repairs, landscaping, street-light upkeep, road markings and junction facilities. The main works must be completed within one year. Revenue generated from advertisements will be adjusted against annuity payments.

AP Urban Infrastructure Asset Management Limited will act as transaction advisor and independent engineer for the project.