Even as the two major partners in the Rs 2,000-crore joint venture are yet to resolve their dispute over the ownership of the project land, Indian promoter Kolkata-based Saraf Agencies (SAPL) has proposed that the company be allowed to put up the project Synthetic Rutile Dioxide plant on its own with Chinese technology.
Claiming that the 234 acre allotted to it is not subject to arbitration, the company has sought the state government's permission to go ahead with the project. SAPL chairman SM Saraf met state industries secretary Parag Gupta to discuss the issue.
The state government, however, wants to move cautiously. It is reportedly trying to cover up its mistake of allotting land in favour of SAPL instead of the JV with which it had signed the MoU.
Since it is a high-profile project involving two countries, the state government will make all efforts to save this project, a top official of the state government told FE. The titanium joint venture was conceived following talks between Prime Minister Manmohan Singh and Russian president Vladmir Putin during latters visit in 2007.
Meanwhile, a writ petition has been filed in the Orissa High Court seeking status of the project. The Land Losers Association of the Ganjam district has prayed the court for a direction to the state government to give adequate compensation for the land, failing which the land be returned to the owners.
Following the courts direction, state chief secretary BK Patnaik has sought a status report on the project from IPICOL, a state government concern that facilitates investment.
The project is hanging fire for over four years as the two partners have locked horns in a legal battle. The conflict between the two partners started over allotment of land for the project. As several attempts for mutual reconciliation with the mediation of the state government failed, the two parties moved for an arbitration under the chairmanship of Justice HS Agarwal.
At one point, the central government suggested the project be taken up with Nalco or Indian Rare Earth (IRE) as the Indian partner in place of SAPL. Then state industries principal secretary T Ramachandru suggested the OMC be considered as a partner. However, this could not materialise as SAPL refused to surrender the land.
As part of the Indo-Russian bilateral cooperation, the Russian Federation along with JSC Technochem Holding had floated a joint venture with Indias SAPL to set up a special economic zone (SEZ) with an integrated titanium project as the anchor tenant at Gopalpur in Orissas Ganjam district. The JV Titanium Products (TPPL) where the foreign partners have a total 55% stake, inked an MoU with the Orissa government on October 15, 2008, to set up the project. The JV proposed to invest R2,000 crore in two phases to produce around 1,08,000 tonne titanium slabs, 40,000 tonne titanium-dioxide pigment, 10,000 tonne titanium sponge and 68,000 tonne pig iron annually. While R1,150 crore was earmarked for the first phase, the rest R850 crore was to be utilised in the second phase.
The decline has cut costs for tiremakers such as Bridgestone Corp and MRF. Demand may exceed production in India by 76,000 tonne this year and by 100,000 tonne next year, Budhraja said.
The imports are not price-driven, but need-driven due to the slow growth in production on the one hand and stockpiles not being enough, Budhraja said. BloombergThe project was scheduled to be completed by 2011 and production was to begin from August 2012.
Since the SAPL was the original applicant for the land, Idco allotted the land in favour of Kolkata-based company instead of TPPL, the joint venture company. This was objected by the Russian Federation which insisted that the land be directly transferred to TPPL. The foreign partner did not agree to a proposal that the land be sub-leased in favour of TPPL. Pointing out that the land has been developed with $126 million provided by it, the Russian Federation wanted that the land be owned by the JV. This lead to a dispute between the two partners.