L&T announced yesterday that a subsidiary of Larsen & Toubro Infrastructure Development Projects (L&T IDPL) has signed the concession agreement with Odisha Government for the Rs 12,925.6 million (US$280 million) State Highway No.10 (Sambalpur - Rourkela) project.

The concession agreement was signed between L&T Sambalpur Rourkela Tollways Limited and the Government of Odisha.

The PPP project was awarded to Larsen & Toubro Infrastructure Development Projects (L&T IDPL) on September 5th after being the lowest bidder among 14 international bidders. The project will be implemented under Design, Build, Finance, Operate & Transfer (DBFOT) basis.

L&T is given 22 years concessional period which includes three years for construction of the project. Under the provisions of Odisha Toll Act, 2010, the company will be entitled to collect toll at three toll gates of the SH-10 for a period of remaining 19 years.

Under the viable gap funding (VGF), the the Central Government will provide Rs 2,585.1 million (US$56 million) as 20 % for the project, the State Government will pump in Rs 2,067.9 million (US$45 million) which stands at 16 %.

The four lane pave-shoulder project will expand over the existing two lane SH-10 and it will connect industrial cities like Rourkela, Rajgangpur, Jharsuguda and Sambalpur. It will also facilitate transportation of mineral carrying heavy vehicles.

Many companies located in the vicinity of the project are Rourkela Steel Plant, L&T Kanbashal Works, UltraTech Cement, Vedanta Aluminum, Bhushan Power and Steel  and large areas of of coal mines of Coal India Limited.

HLCA gave its nod to the project back in November 17, 2009. Department of Economic Affairs (DEA) of Government of India in its 16th meeting cleared the project for VGF with internal rate of return at the rate of 18 %. The bidding of L&T was considered on October 1, 2012 and Empowerment Committee on Infrastructure (ECI) in its 23rd meeting on August 7 this year approved the project.

L&T IDPL has currently 18 road projects in its portfolio.