The Union Cabinet on 5 March 2005 approved the National Highways Development Project (NHDP) Phase III and a special package for development of roads in the North East.

The Cabinet approved 4/6 laning of 4,000 km of National Highways under NHDP Phase III – A. In principle approval was also granted for 4/6 laning of additional 6,000 km under NHDP Phase III – B. NHDP Phase III will be implemented on BOT basis and the overall cost of four-laning of 10,000 km (4,000 km of Phase III-A and 6,000 km of Phase III-B) would be Rs.55,000 crore.

A total of 71 stretches aggregating 10,417 km have already been identified for NHDP Phase III by the Ministry of Shipping, Road Transport and Highways, based on high density of traffic, connectivity of State capitals with NHDP Phase I and II and connecting places of economic, commercial and tourist importance. To be implemented during X and XI Five Year Plans, the contribution of the Government towards NHDP Phase III will be in the form of (i) grant to the extent of up to 40 per cent of the cost of works, and (ii) meeting the entire expenditure on consultancy, land acquisition, etc. The National Highways Authority of India will execute the project,

The Cabinet also approved the Special Accelerated Road Development Programme in the North Eastern Region. Under this special package, a length of 6,396 km of roads in the North East will be developed at an investment of Rs.10,500 crore in two phases.