Orissa govt open to pick up stake in titanium project

The Orissa government is open to picking up stake in the proposed Rs 1200-crore titanium project proposed to be developed by the Russian promoters at Chhatrapur in south Orissa's Ganjam district.

“After the exit of Saraf Agencies, the Russian promoters had planned to go alone in developing the titanium project. But of late, they have been looking for an Indian partner. The state government is open to pick up stake in the project if the Russian promoters approach us”, a top official source told Business Standard.

With the titanium project failing to make any headway at the ground level even after the pull out of the Kolkata-based Saraf Agencies, the Orissa government had asked the Russian promoters to settle all outstanding dues of their erstwhile joint venture partner- Saraf Agencies and start work on the project as soon as possible.

The state government had asked the Russian promoters to settle all disputes with Saraf Agencies through arbitration.

Saraf Agencies had invested around Rs 100 crore on the project.

The titanium dioxide plant was originally supposed to be developed as a joint venture between the Russian promoters and Saraf Agencies. Both parties had formed a special purpose vehicle called Titanium Projects Private Ltd (TPPL) for executing the project.

But work on the ambitious project had hit a roadblock due to sharp differences between the consortium partners over the title of land allotted to the project by the state owned Industrial Infrastructure Development Corporation of Orissa Ltd (Idco).

Idco had allotted 250 acres of land at Chhatrapur, the project site in south Orissa's Ganjam district, in the name of Saraf Agencies which was stridently opposed by the Russian partners of the project. The Russian promoters wanted the land allotment in the name of the SPV- TPPL.

Even after several rounds of negotiations, the two sparring partners failed to cut any ice, with the dispute finally culminating with the exit of Saraf Agencies from the project.

As per the original scheme of things, the Russian partners- State Property Management Agency had 51 per cent stake in the JV and Tekhnokhim Holding 4 per cent stake. The balance 45 per cent stake was held by the Indian partner- Saraf Agencies.