An adequate and efficient transport system is a pre-requisite for sustainable economic development. Traffic congestion is a major obstruction to the smooth functioning of transportation system of any country. Creation and periodic maintenance of road infrastructure reduces the congestion in rapidly growing cities, which also has long term economic benefits. Thampanoor flyover lying near to Thiruvananthapuram Railway station and KSRTC bus terminal, is a ‘T’ shaped three arm flyover. Due to heavy volume of traffic commuting through this junction, severe traffic congestion is witnessed during most parts of the day. As a part of the proposed Light Metro Project, a new two-tier flyover is proposed along with modifications of existing flyover. The lower deck of the flyover, will have two lanes of 5.5 m each exclusively to facilitate vehicular traffic in both directions and the upper deck of the 400 m flyover will be used for the movement of the MRTS. Detailed traffic surveys were conducted and economic feasibility analysis of constructing new flyover and widening of existing flyovers with alternatives scenarios were carried out. The economic analysis was done considering ‘with’ and ‘without project’ situations. The analysis reveals that there would be a high return of 13.6% in the case of widening of flyover to four lanes and relatively less IRR of 7.7% in the case of widening existing flyover to four lanes and constructing new flyover. However, if savings in travel time are also considered, the IRR is projected to be 24.3% and 17.8% respectively in two project scenarios.