New Delhi, Sep 22 (IANS): The central government on Tuesday approved the four-laning of the Cuttack-Angul section of National Highway-42 in Odisha, at a total cost of Rs.1,575.38 crore.

The decision to develop the 112-km stretch of NH-42 was taken by the Cabinet Committee on Economic Affairs (CCEA) which met here.

The approval was given under the National Highways Development Project's (NHDP) Phase-III on design, build, finance, operate and transfer (DBFOT) basis in BOT (build, operate and transfer) -toll mode, said a CCEA statement.

"Bids have been invited on the basis of provisions of the model concession agreement subject to such changes as accepted by the PPPAC (public-private partnership approval committee)," the statement said.

"Maximum grant from the government for viability gap funding (VGF) would be 40 percent of the TPC (total project cost)," the statement added.

In March, 2012 the project for four-laning of the 'Cuttack-Angul' section of NH 42 was awarded to Ashoka Buildcon.

However, due to non-fulfillment of condition precedents by the NHAI (National Highways Authority of India), the previous concession agreement was terminated on mutual consent.