The group's management stated that the Orissa project would not lead to any significant shareholder value creation. A detailed techno-economic feasibility study conducted by ICF Kaiser (Asia) Pty Ltd and Bechtel Australia Pty Ltd (Kaiser-Bechtel) for the project led the group's management taking the decision to shelve the project.

``They felt that in the present configuration, it (the Orissa project) will not generate returns for the shareholders, commensurate with the size and risk of the project,'' the statement said.

With this decision, Hindalco project became the second mega-greenfield venture in Orissa, along with Tata Steel's integrated unit at Gopalpur, tofall by the wayside in the last 18 months. The unofficial reasons cited by both the Tatas and the Birlas appear to be quite similar - poor infrastructure and indifference of the state government.

There are also significant similarities between the two proposed projects: both were to cost their respective promoters around Rs 10,000 crore when complete, and would have provided employment to over 5,000 each. While the Tatas squarely blamed the Orissa government for the scrapping of the project, the Aditya Birla group has been more discreet with the official reason cited being: "the project will not lead to significant shareholder value creation".

However, Hindalco sources said that in two years since the project was announced, the company has not been allotted "even an inch of land" by the state government. "It is not that the project would have been financially unviable but the risk involved with the project, considering the amount of investment that was to be made, is immense given the volatile politicalenvironment," they added.

"Going in for a greenfield project of this scale, it is understood that the gestation period will be high and that the share price will take a hit. When a company starts a major project, it pre-supposes such possibilities," the sources added. The greenfield venture was to be set up in two phases with the final configuration being a one million tonne alumina refinery, a 2.5 lakh tonne per annum smelter, a coal-fired 650 mw power plant, a captive jetty and bauxite mines with annual capacity of three million tonnes.