GVMC’s PPP Road Proposal Triggers Divided Response

The Greater Visakhapatnam Municipal Corporation (GVMC) has proposed developing 54 major roads through a Public-Private Partnership (PPP) annuity or hybrid-annuity model, a move that drew mixed reactions among councillors.

On November 21, at a council meeting, GVMC listed 88.35 kilometres of road across Zones 2, 3, 4, and 6 for the scheme. Under the plan, contractors will be responsible for both construction and a ten-year maintenance period.

The corporation will release 40 percent of the project cost after construction, with the remaining 60 percent paid in instalments over the next decade. Any damage during the maintenance phase must be repaired by the contractor, and GVMC can withhold payments if standards are not met.

While corporators welcomed private participation, they insisted it must come with strict oversight. Specifically, they objected to contractors earning advertising revenue on the same stretches for which they are already compensated for construction and maintenance. Commissioner R. Srinivasa Rao defended the model, noting that the tender value already includes interest on the deferred amount and that contractors are permitted to install hoardings to generate supplementary income. He cited similar systems in Indore and Thiruvananthapuram.

Some GVMC officials remain unconvinced. They recalled a study tour to Indore three years ago where contractors relied entirely on advertising revenue without receiving extra payments—a model that did not take off in Visakhapatnam. These officials argue that paying contractors for construction and maintenance while also permitting advertising earnings would cause losses for GVMC, and have urged a review.

The proposal was kept pending for further scrutiny, with councillors agreeing to revisit the advertising clause before taking a final decision. The council will meet again soon.