Rs 32,000 crore greenfield highway to connect ASR with Amaravati

The center has approved the proposed route of a new 1,107-km greenfield national highway, with 457 km passing through Andhra Pradesh, including nearly 200 km in Alluri Sitarama Raju (ASR) district. The AP portion is estimated to cost around Rs 32,000 crore, while the total project cost is set at more than Rs 72,000 crore. Passing through Araku, Paderu, Chintapalli and Koyyuru before connecting to the Amaravati Outer Ring Road (ORR), the corridor could strengthen tourism, logistics and land-market activity across the region.

Greenfield highway to cover key areas across Andhra Pradesh

The Andhra Pradesh stretch of the highway will pass through ASR, Parvathipuram Manyam, Polavaram, East Godavari and Eluru districts. Within ASR district, the route will cover Araku, Dumbriguda, Hukumpeta, Paderu, G Madugula, Chintapalli, GK Veedhi and Koyyuru mandals.

The corridor is expected to provide an alternative route to the congested Kolkata-Chennai National Highway (NH-16), improving passenger and freight movement through remote agency areas. The highway will eventually connect with the Amaravati ORR near Agiripalli, giving the ASR and northern agency belt a direct road link towards the capital-region network.

Property at a glance: Key markets around the corridor

The proposed highway connects markets with very different property profiles. While Amaravati and the wider Vijayawada region have established residential markets, the ASR belt is more relevant for tourism, land, and local commercial activity. For a consistent comparison, the property figures below are based on Square Yards data.

Source: Square Yards; average asking prices as of June 2026.

Amaravati connection strengthens the real estate market

The connection with the Amaravati ORR near Agiripalli is one of the project’s most important elements from a real estate perspective. The highway will bring the ASR-Araku belt closer to the capital-region road network, while Amaravati real estate and surrounding locations are already part of the wider Vijayawada-Tadepalli-Mangalagiri property market.

The highway should therefore be viewed as an additional connectivity layer rather than an immediate trigger for property appreciation. Its significance could emerge through better movement of people, goods and services between the capital region and northern Andhra Pradesh, potentially adding to the long-term relevance of Amaravati real estate.

NH-516E and new highway could create a parallel network

The project’s most distinctive feature is its relationship with NH-516E. It connects Rajahmundry with Vizianagaram through Rampachodavaram, Koyyuru, Paderu and Araku. Work on the corridor is progressing, with more than 60% completed.

The new greenfield highway will pass through several of the same broad locations and will run parallel to NH-516E at some points. This could create a wider road network around Koyyuru, Chintapalli, G Madugula, Paderu and Araku, improving access to multiple regional routes.

For real estate, the impact is likely to be more visible around major junctions, settlements, tourism destinations and areas where commercial activity can expand. Better connectivity could also improve the viability of logistics, roadside businesses, and tourism-linked development, while stronger regional links could support the wider Amaravati real estate market by improving access to the capital region.

Araku and Paderu belt could gain from tourism access

The property story changes considerably once the highway enters the ASR belt. Araku, Paderu and surrounding areas have a stronger tourism and hospitality profile than a conventional urban housing market. Improved road connectivity could support hotels, homestays, restaurants, tourist facilities and other local commercial activity.

The new highway could add another layer of accessibility to an area where tourism is already an important economic activity. However, the development impact will depend on land-use permissions, environmental restrictions and supporting infrastructure.

Highway network could strengthen freight and local commerce

The project also has a significant logistics dimension. The AP portion will pass through predominantly rural and agency areas before reaching the Amaravati region. A faster road connection could improve the movement of agricultural and other regional goods towards larger commercial centers.

NH-516E’s development is similarly intended to improve regional connectivity and support the movement of agricultural produce and other goods. With both corridors serving parts of the same geography, locations with access to either or both routes could become more relevant for warehousing, transport, roadside commerce and agriculture-linked businesses.

Land acquisition will cover more than 128 villages

Land acquisition is another major component of the project. Acquisition for the new highway will cover more than 128 villages across the route. The acquisition will also cover reserve forest areas in parts of Araku and Dumbriguda mandals.

This distinction is important for the real estate market. Acquired land should not automatically be treated as developable property, particularly where forest areas and regulated zones are involved. Instead, development impact is more likely to emerge around existing settlements, road junctions, and legally developable areas that gain improved access to the highway.

For investors tracking Amaravati real estate, the key factor will therefore be how the new highway integrates with the existing capital-region road network rather than the highway announcement alone.