Indo-Russian titanium venture to begin as partners settle row

The much-hyped Indo-Russian industrial project?Titanium Products Pvt Ltd (TPPL) ?is soon going to be implemented as the estranged partners of the project agreed to amicably settle their dispute.

As per their agreement, the Indian partner?Kolkata-based Sharaf Agencies (SAPL)?will withdraw from the project allowing the Russian partner to go ahead with the project on its own. The dispute over the financial implications will be decided by an arbitrator.

State industries minister, Raghunath Mohanty, said the two partners have intimated the government that they have settled their dispute. The Russian promoters will execute the project, he said, adding the dispute of payment of compensation to the Indian partner would be decided by arbitration.

Representatives of the joint venture SAPL and Titanium Mineral Products (TMPL), the Indian partners, and Russian Federation and JSC Technochem Holding , the overseas promoters held discussions on Thursday on the core issues of special economic zone, land transfer and compensation for the investment. An eight-member Russian delegation represented the Russian promoters in the discussion.

The Indian promoters reportedly said they are ready to quit the project if their demands were accepted by the Russian promoters. While the Indian partners are reluctant to transfer 200 acre allotted by the state government for the project to the joint venture company Titanium Products (TPPL) they are demanding compensation for the investment they had made on the project.

The Russian promoters , having 55% stake in the project, have been objecting to certain decisions of the Indian partners having financial implications.

The two partners, however, agreed to resolve the issue amicably with the intervention of the state government. Besides the industries minister, the industry principal secretary, Sourav Garg, IIDCO chairman Priyabrata Patnaik, IPICOL managing director Suresh Patnaik, and industries director Hemanta Sharma mediated to solve the dispute. Titanium Products had signed an MoU with the Orissa government in October 2008 to set up the country?s first integrated Titanium Complex at Chatrapur of Ganjam district with an estimated investment of about Rs 2,000 crore.

The promoters have entered into a long-term contract with the Indian Rare Earths Ltd (IREL) for supply of 2 lakh tonne of raw materials primarily ilmenite per annum for the project. TPPL will have a long-term buy-back contract with the Russian partner for purchase of not less than 45,000 TPA of titanium slag and 30,000 TPA of pigment titanium dioxide.

As per the MoU , the complex, which will come up as an anchor project of the sector specific special economic zone (SEZ) developed by Saraf Agencies, will have facilities for the manufacture of 1,08,000 TPA of titanium slag, 68,000 TPA of high purity pig iron(a co-product), 40,000 TPA of titanium dioxide pigment, and titanium sponge.

Stating that the required 250 acre has already been acquired, he said the first phase of project ?titanium slag and pig iron facilities?will come up by October 2010.