The move follows yet another series of meetings between MRL, its estranged joint venture partner Southern Petrochemical Industries Limited (Spic) and the ministry of petroleum to sort out the wrangle over the ill-starred Arochem, which remains on paper nine years after being incorporated.

Both Spic and MRL declined comment when contacted. If through, it will see the end of a 11-year tale of bureaucratic fillibusters and legal snafus which have led to the project remaining stalled despite seven separate governments at the centre and four prime ministers having `approved' it at some point or the other. This will also see resumption of work on SPC, promoted by Spic on its own, tomanufacture purified treaphthalic acid (PTA) and polyester filament yarn.

SPC is currently stalled by a court order after MRL moved court alleging irregularities in the allotment of land to SPC, which was carved out from the original allotment made to Arochem by the government of Tamil Nadu.The pullout decision is likely to close 11 years of uncertainty clouding Arochem, although the prospects of the project itself - to manufacture aromatics like orthoxylene, paraxylene and benzene from naphtha - may see the light of day at a later date, with either Spic going it alone or with a new partner.

However, Spic's resources will be focused for the present on getting SPC going again, provided the legal barriers were removed. At present, it is not clear whether MRL will pursue its breach of trust case to claim damages and/or compensation, although indications are that with MRL exiting Arochem, the case may also be dropped if Spic agrees to refund its investment in Arochem with compensation.

Even if thathappens, it may be coming barely in time to save SPC as a viable project, on which close to Rs 900 crore has already been spent (largely public funds from financial institutions and banks).

Apart from the huge cost escalations (the project cost has nearly doubled), several exposed sections of the semi-built plant have been badly damaged by the elements. Further, the actual state of equipment and stores worth hundreds of crores of rupees, which have been lying untouched in open air, and enclosed bonded warehouses inside the project area, remains unknown.