Indo-Russian titanium project in jeopardy

The Indo-Russian initiative for a Rs 2000-crore titanium project in Orissa has been pushed into deeper uncertainty as two sparring partners of the project, the Kolkata-based Saraf Agencies and the Russian promoters, have failed to reach any settlement on land allotment and share holding

The impasse continues despite a tripartite meeting involving the Orissa government, Saraf Agencies and the Russian promoters held on Tuesday and subsequent two rounds of meeting between the joint venture partners to sort out the differences.

“There has been no breakthrough in our talks and we could not arrive at any settlement despite two rounds of bipartite meetings. At present, there seems to be no way as to how we can convince the Russian promoters”, a top official of Saraf Agencies told Business Standard.

The project was to come up near Chhatrapur in Ganjam district under the banner of Titanium Products Pvt Ltd (TPPL). It is not clear whether the joint venture partners of, who are at loggerheads on the issues of land allotment and shareholding, would have a fresh round of talks.

Saurabh Garg, the state industries secretary said, “We have not received any communication from either of the parties on the progress of their talks. The state government is open to talks with the promoters of the titanium project but first they need to communicate to us.”

On Monday, the state government had directed the two partners of the project to iron out their differences. It may be noted that the proposed titanium project had run into rough weather after the Russian promoters had threatened to pull out of the project due to disputes with Saraf Agencies.

At the heart of the dispute was the controversial manner of land allotment for the project by the Orissa State Industrial Infrastructure Development Corporation (Idco).

Saraf Agencies had entered into a land lease agreement with Idco for around 200 acres of land near Chhatrapur in February this year. The Kolkata-based realty player intended to sub-lease the land to TPPL which had drawn flak from the Russian promoters, who wanted the land directly allotted to the JV company.

While Saraf Agencies held 45 per cent stake in the project, the Russian government held 51 per cent with the remaining four per cent belonging to JSC Technochim Holding, a Russian firm.

TPPL has proposed to invest around Rs 2,000 crore in two phases. This included Rs 1,150 crore in the first phase and Rs 850 crore in the second phase. The first phase of the project was scheduled to be completed by October 2010.

In the second phase, the company needed about 350 acres of land to develop the Special Economic Zone (SEZ). The proposed titanium plant will produce 1,08,000 tonnes of titanium slag, 68,000 tonnes of high purity pig iron, 40,000 tonnes of di-oxide pigment and 10,000 tonnes of titanium sponge per annum.