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Funding for the project includes a $300,000 grant from the Mississippi Department of Transportation and a match of about $80,000 from the city, said Dave Huwe, director of community planning and development.
Cook Coggin Engineers was awarded the contract Tuesday to prepare preliminary drawings for the project.
South Parkway on the north side of Highway 72 will be widened to three lanes to add a right turn lane for traffic to turn westbound.
The access for Liddon Lake Road at the intersection, which currently brings five points together, will be diverted so that traffic enters Highway 72 from a new outlet next to Auto Zone and away from the intersection.