Nalco aluminium park draft faces state review

On the advice of the government, Nalco had submitted the draft MoU to IDCO for comments and observations way back in December 2007.

It has been pending with IDCO since then.

"We will seek some changes in the draft MoU and the government through IDCO will make its observation in the next couple of days", a senior official of the state industry department told Business Standard.

The finalisation of the MoU is important as it will lay down a clear cut roadmap for the development of the aluminium park.

This will be followed by formation of a special purpose vehicle (SPV) to set up the project.

Though conceived as a 50:50 joint venture (JV) between the two partners in the draft MoU, the government and the company differ on cost sharing.

While the company wants the initial investment for infrastructural development to be considered as its stake in the joint venture, the state government wants the company to bear the land cost which will not be considered as its stake in JV.

In this context, the government is weighing the options of changing the shareholding pattern to 51:49 in its favour in the proposed JV, sources said.

The aluminium park was proposed to come up over 500 acres adjacent to the company's existing smelter plant at Angul in the first phase.

However, Nalco is rethinking on the size of the land to be developed in the first phase as only 171 acres of government land is available adjacent to the company's smelter plant in Angul.

During a recent meeting with the chief secretary Ajit Kumar Tripathy, Nalco CMD, CR Pradhan opined that the company would like to develop the Aluminium park only on the available government land in the context of problems associated with the private land acquisition.

The government was toying with the idea of minimum acquisition of private land.

"We are in discussion and nothing has been finalised. The proposed aluminium park may come up on about 200 acres with minimum private land acquisition", added the official.

Besides, the government is exploring the possibility of entrusting the Angul-Talcher Development Authority (ATDA) to develop the infrastructure for the park.

Similarly, the government will identify a nodal officer to co-ordinate and monitor the progress of the aluminium park.

The initial investment by the partners for infrastructure development was proposed to be treated as their contribution towards their respective stakes in the JV.

Similarly, power for the proposed aluminium park was to be purchased at the market rate. The proposed park will accommodate both upstream and downstream aluminium industries. These include caustic soda, aluminium fluoride, CT pitch, CT coke, casting, extrusions, aluminium conductor, aluminium plates and rounds manufacturing units.

Nalco has expressed its commitment to supply the raw material required by the units located in the aluminium park on a priority basis.

The company contributed Rs 1933.05 crore to public exchequer in 2007-08 with the contribution to the state's exchequer being Rs 287.45 crore.