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Ministry report takes Lavasa to task; firm weighs its options

Ministry report takes Lavasa to task; firm weighs its options
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First Published: Wed, Jan 19 2011. 12 04 AM IST

Updated: Wed, Jan 19 2011. 12 05 AM IST
Bangalore/Mumbai: The environment ministry’s expert appraisal committee (EAC) report on the Lavasa hill city project near Pune said that the development has damaged the environment and violated land acquisition norms in the eco-sensitive area of the Western Ghats, prolonging the work stoppage at the site.
The ministry also submitted the 76-page report, dated 17 January, in the Bombay high court on Tuesday before a division bench of justices V.C. Daga and Rajesh Ketkar. The case will now come up for hearing on 27 January.
The report, based on a three-day site visit by senior ministry officials, is a detailed analysis along with a set of observations of the Central and state-level EAC that visited the Lavasa project site earlier this month.
This was in response to a court order passed on 22 December after hearing a petition filed by Lavasa Corp. Ltd, challenging a 25 November show-cause notice by the environment ministry.
The ministry had then asked Lavasa to prove within a fortnight that it did not violate environmental norms in its hill city development, stalling construction at the project site.
Lavasa, which says it is India’s first hill city project, and is being developed by Lavasa Corp., is spread across 20,000 acres and has seen an investment of Rs.4,000 crore so far.
Hindustan Construction Co. Ltd holds?a?64.9%?stake?in Lavasa, with the Avantha Group having 16%, Venkateshwara Hatcheries Group 12.79% and a private investor 12.79%.
The report indicates violations on the “hill city” nature of the project and questions its environmental impact due to substantial changes in land use, hill-cutting, quarrying and water supply plan among others.
The ministry’s order concerns itself more with jurisdiction than environmental issues, Lavasa Corp. said.
The “MoEF (ministry of environment and forests) does not have objective and measurable norms. Therefore, instead of restricting themselves to environmental issues, MoEF has resorted to questioning state government jurisdiction” and various other processes, Lavasa Corp. said in a statement. “These have nothing to do with environmental issues, which the court had directed them to study.”
Mint reviewed a copy of the MoEF report.
“The haphazard way in which hill cutting has taken place in the project area is expected to result in landslides, high erosion and consequent siltation of water bodies...,” the MoEF report said. “The committee noted during the site visit that obvious damage has been done for the sake of speedy development of the hill town and ‘flexible’ development controls guided by market considerations. There should have been a constant update of investigations related to impact assessment based on changing construction typology, intensity and area.”
The report also recommends that the state government review the Hill Station Development Policy in view of the nature of the Western Ghats, an environmentally sensitive zone.
A Lavasa spokesperson told Mint that the company’s lawyers are studying the order and will explore all options available, including an appeal against the report in the Bombay high court.
“This is a huge investment in my constituency and over a lakh of people are directly and indirectly associated with it,” Supriya Sule, member of Parliament and daughter of Union agriculture minister Sharad Pawar, told Mint on Tuesday. “I don’t want that economic balance to be disrupted and people scared to invest in the project.”
Lavasa’s initial promoters included Sule and her husband and close associate, Aniruddha Deshpande. The Sules offloaded their stake in the project in 2004.
At stake is also the proposed initial public offering (IPO) of Lavasa. In November, Lavasa obtained the approval of market regulator Securities and Exchange Board of India to raise Rs2,000 crore through an IPO.
“Though the company has got time to come clean on this matter in terms of the IPO, investors have not expressed positive sentiments towards the issue since the controversy broke out last year,” said a real estate analyst, who didn’t want be named. “Even if the company were to go for a public issue anytime soon, I am not sure if there would be an appetite for it.”
The report says that during the January site visit, EAC was not given any documents regarding the Maharashtra government’s powers to give environment clearance in 2004 and the approval doesn’t mention specifics of the project construction, including conditions for mitigating environmental impact.
The Lavasa project is spread across 18 villages with Adivasi (tribal) communities in the area.
According to the report “there has been a large-scale diversion of ‘ceiling surplus’ land which was allotted to these Adivasis” and no scheme of rehabilitation of affected villagers was made available to EAC during its visit.
EAC has also found that the environmental impact assessment report carried out by National Environmental Engineering Research Institute, Nagpur, in 2004 was inadequate as an assessment of the Lavasa project.
The Lavasa spokesperson said that if construction had continued, Dasve, one of the villages that was being developed in the project, was scheduled to be handed over by December 2011.
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First Published: Wed, Jan 19 2011. 12 04 AM IST