Mumbai/New Delhi: The environment ministry on Wednesday gave conditional clearance to a $31 billion hillside township being developed by Hindustan Construction Co. (HCC), bringing a long-running dispute between the firm and authorities closer to conclusion.

Lavasa is a planned city being built near Pune by HCC.

The ministry of environment and forests’ clearance was granted on the condition that the developer is given the green light by the local state pollution board, and that various regulations are followed throughout construction.

“If in future, is it found that any condition is in violation of Environment (Protection) Act, 1986, legal action shall be initiated against the project proponent," the ministry said in a letter to the developers posted on its website.

HCC says it is losing around 2 crore ($405,000) a day on the project impasse.

Last month, the firm posted a loss of 40.54 crore in the quarter to end-September, sending its shares down nearly 5%.

“The inordinate delay has led to a huge set back to the project and Lavasa Corporation has a challenging task at hand to bring the project up to speed and to meet our commitments," HCC said in a statement.

Authorities declined to give approval to the township last month, saying it had not complied with conditions specified by a ministerial panel probing the project’s violation of green rules.

Land acquisition for development has become a politically charged issue in India, as big business comes up against angry landowners and a heavy-handed environment ministry that has been accused of stymying growth in Asia’s third-largest economy.

Protests by local villagers and interventions from the government have delayed a $12 billion steel mill by South Korean firm POSCO, spooking investors and harming foreign interest in infrastructure projects.

Hindustan Construction has already agreed to meet previous conditions including a written commitment to not repeat environmental violations, a revision of development areas to conform to town- planning norms and the creation of an environmental restoration fund.

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