The port and special trade zone at Mundra in Gujarat run by the Adani Group has violated several environmental conditions, according to a committee set up by the environment ministry, potentially hurting the expansion plans of India’s biggest private port firm.

The five-member panel, headed by Sunita Narain, director general of Centre for Science and Environment, which also included officials from the environment ministry and experts on coastal ecosystems and disaster management, submitted the report to environment minister Jayanthi Natarajan on Thursday.

“The company has also bypassed environmental procedures in certain cases," said the report, which is available on www.cseindia.org.

The Adani power plant and waterfront project has been criticized by activists for its adverse ecological impact. The environment ministry had set up the panel to examine allegations of environmental destruction and non-compliance by the project.

The Adani Group said it wasn’t breaking any rules.

“As a responsible corporate, we have been complying with the applicable rules and regulations," it said in a media release. “We will continue to work closely with the government for preservation of environment and upliftment of the communities in which we operate. We are studying the report in detail and will work out appropriate steps. The north port has not been developed at all and hence this will not impact the current operations of the company."

Hemant Bhattbhatt, a senior director at audit and consulting firm Deloitte Touche Tohmatsu India Pvt. Ltd, said, “If the allegations are proved right, it should impact the Adani group and its fortunes."

He added that the group had already been hit by the government’s decision to deny security clearance on bidding for port projects since November 2010.

The committee used remote sensing technology to assess environmental damage that had occurred over the past decade. It concluded that there were various cases of non-compliance, including widespread destruction of mangroves. Seventy-five hectares of mangroves have been lost on Bocha Island, which was declared as a conservation zone under the environmental clearance conditions, the panel said.

“The company has not taken precautions to guard against blocking of creeks because of construction activities; satellite imagery shows signs of deterioration and loss of creeks near the proposed North Port," the report said, adding that the company had not taken stipulated measures to ensure that the channels that bring sea water for use in the thermal power plant and then discharge were lined with a protective material so that there is no chance of ground water contamination. “This was a clear condition set at the time of clearance," it said.

The report also said that the company was found wanting on the inventory of fly ash utilization and disposal.

The committee found instances in which statutory procedures had been circumvented through the use of multiple agencies, at the centre and state level, for obtaining clearances for the same project, Narain said.

“The public hearing procedure, which is a critical part of project clearance and helps to understand and mitigate the concerns of local people, has also been bypassed on one pretext or another," she said.

Narain added that fishermen, who depend on the coast for their livelihood, were the worst hit by these changes. “The development on the coast, on their land has clearly left little space for them," said Narain.

The report suggested that there should be a plan to ensure access to basic facilities, including a dedicated fishing harbour, by the local people.

The panel has recommended that the ministry create an Environment Restoration Fund, which should be 1% of the project cost (including the cost of the thermal power plant) or 200 crore, whichever is higher. The fund should be used for the remedying environmental damage in Mundra and for strengthening regulatory and monitoring systems. It has also recommended that environmental clearance of the North Port be cancelled to conserve mangrove forests and maintain the ecological balance of the coastal zone.

The panel has also made recommendations on mangrove conservation, fly ash management and disposal, salinity control, coastal safety (including earthquakes and tsunamis), project clearance conditions and post-clearance monitoring.

“If monitoring was rigorous, public and credible, there would have been no need for this committee. Which is why we have recommended that there is a need to create a monitoring system to ensure that corrective action suggested by this report is taken within a time-bound manner," said Narain.

“All our problems have been heard and the report has brought them out," said Naran Gadhavi, the president of the Kheti Vikas Seva Trust, set up by local farmers, which was opposed to the project.

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