Though the current round of discussions between L&T and the transnationals are on for over three months, sources say the delay on any decision is due to the depressed international alumina prices which have now touched historic lows.

L&T had first mooted the project four years back, but the engineering, construction and cement giant was forced to put the project in the backburner when partner Alcoa of USA chose to walk out from the venture in 1995.

However, this time around L&T wants to be in the project only as a minority partner and engineering-procurement-construction (EPC) contractor, instead of going for an equal joint venture which was its original plan.

Most international aluminium giants have lined up atL&T's doors, say sources, adding that even Alcoa has evinced interest after rival Alcan chose to strenghten its presence in the country. However, this could not be confirmed from L&T.

The project, as had been earlier planned, will come up in Orissa and is likely to cost around $1 billion. L&T officials had earlier indicated that L&T had never shelved the project in the first place. It had also said it was looking for the right partner and the financial viability given the demand projections and financing options.

Industry sources said a delay in taking a final decision on the project can only benefit L&T. "As international prices are at five-year lows, financing a one-million-tonne project could be a major problem."

Also, with the Indian government deciding to throw open the public sector companies - namely Bharat Aluminium Co (Balco) and National Aluminium Co (Nalco) - for grabs, the multinationals may defer their decision on participation in L&T's project, they said.

Pechiney's presence in India isrestricted as a technology partner to National Aluminium, the public sector major. It does not have any equity presence in any domestic aluminium companies. It has recently signed an agreement with Sterlite Industries for transfer of technology to its proposed greenfield smelter.

Alcan is one of the only two aluminium multinationals -- other than Norsk Hydro of Norway -- which has equity in an Indian company.

The project, if it finally takes off, will be the third export-oriented alumina project in the country. Indal, along with Alcan and Norsk Hydro, is setting up a similar-sized alumina project in Orissa.

After much delay, the Gujarat government has also managed to rope in new partners, after Raytheon walked out, in a 7.5-lakh-tonne-per-annum alumina project in Kutch.

L&T has earlier faced severe criticism from investors, in particular the foreign institutional investors (FII), for its decisions to diversify into alumina and steel. L&T had last year announced shelving of a severely-criticised steelproject proposal while it had remained non-commital on the alumina project.