The Indian Ministry of Road Transport and Highways has signed a concession agreement with an unnamed company for widening the 311-km road from Nechipu to Hoj in Arunachal Pradesh state to a two-lane national highway at a cost of Rs14.8bn ($274m).

Trans Arunachal highway will extend from Tawang in Arunachal Pradesh to Bogibeel bridge in Assam state.

As well as the road widening, work also includes improving existing pavement, construction and upgrading of major and minor bridges, culverts, road intersections, interchanges, as well as drains.

The project will be implemented over the next five years on a build-operate-and-transfer model under the Indian government’s Arunachal Pradesh Package of Roads and Highway.

After completion, the project is expected to improve the internal connectivity of western districts of Arunachal Pradesh with Itanagar, Seppa and Bomdila.

The project is also expected to give a boost to the socio-economic development of the state, as well as help in hydropower projects coming up in Arunachal Pradesh.

It will also facilitate the security and defence agencies to combat anti-national activities in addition to the threat on border areas.

The trans-Arunachal road project will require Rs12.5bn ($231.3m) for civil works during the four and half years of construction.

Following completion, the project will be operated by the concessionaire for a period of 17 years.

The Indian ministry will provide 80% of the construction costs, worth Rs10bn ($185m), to the project authority during the construction phase and the rest will come through annuity payments.

The project was originally unveiled in January 2008 by the Indian Government and approved by Indian Cabinet in January 2009; but the tendering was cancelled twice due to the high annuity quotes.