Caught between MoEF and state, Lavasa wants PM to intervene

Even as Hindustan Construction Company (HCC) awaits the verdict on the stay order of their hill town Lavasa, in the Bombay High Court and ping pongs between the state and central government, the company says it has been unfairly handed a stick.

Ajit Gulabchand, Chairman and Managing Director of HCC, on Monday appealed to Prime Minister Manmohan Singh to intervene in the issue of Lavasa saying "gross injustice" had been done to it.

"We are being unjustly treated, we have tried every avenue. I am appealing to the cabinet and the PM to intervene at this late stage and correct the situation and the wrongs done," Gulabchand told CNBC-TV18 in an interview.

 Caught between MoEF and state, Lavasa wants PM to intervene

HCC's Lavasa hill town project, near Pune. Lavasa Corporation.

India's Ministry of Environment and Forests (MoEF) on Friday refused to grant a green clearance to the first phase of Lavasa, a hill city project near Pune, citing that it had not complied with pre-conditions.

The MoEF said that the final decision on environmental clearance to the Rs 3,000 crore project would be taken based on the Maharashtra Government's "credible action" on the issue. However, the Maharashtra government is yet to make a decision on the action it needs to take against Lavasa - till which time the project will be in limbo, unless the court intervenes.

"As the pre condition on the credible action on violation of EIA Notification, 2006 has not been complied with, the Ministry is unable to issue the Environmental Clearance to the first phase of Hill City project (2000 ha) of M/s LCL," the ministry said.

The order also said that final decision on Lavasa is "subject to the final orders of the High Court of Bombay as the matter is sub-judice".

The pre-condition included that the Maharashtra government to initiate credible action against Lavasa for violations under the Environment (Protection) Act. However, the Maharashtra government is yet to make a decision on the action it needs to take against Lavasa - till which time the project will be in limbo, unless the court intervenes.

The environment ministry's order follows the Bombay High Court directive to it last month, to pass a final order on Lavasa's regularisation application, with regard to constructions at its township project near Pune, in three weeks.

Terming the order "a serious lack of governance", Gulabchand said, "I invite then to come visit Lavasa and see the work we have done - for the environment, social integration, upliftment - in every way and what is at stake here."

Gulabchand pointed out that "entrepreuneurs need a certain amout of certainity and a predictability" and incessant delays in clearances and the uncertainity in infrastructure projects does not bode well for foreign investors.

"If you start stopping projects, if you start delaying decisions on matters - then when they appear to be so grossly unjust and they hinge around some technical condition - do you think you are creating this confidence, certainity, predictability? Do you think that augurs well for investment in India?" Gulabchand said in an interview to CNN-IBN.

Gulabchand cited that apart from crores in losses to HCC, the closure of the projetc has caused joblessness for at least 10,000 people, at least 2,000 homebuyers, businesses and third party contracts have been affected and more than a 100 local businesses have shut down.

"There are huge consequences and I think the environment ministry must factor the consequences against just one condition which is not to be met by Lavasa," Gulabchand told CNBC-TV18.

Reacting to Friday's order, Lavasa Corporation said the order was disappointing, "highly discriminatory and unjust ".

"After eleven months of continued delaying tactics, the MoEF has yet again evaded grant of Environment Clearance (EC). To suggest that the State Government of Maharashtra has not yet taken action is not a good enough reason for delaying grant of EC, to such a large and important project, under development for last seven years," Lavasa said in a statement.

Lavasa Corporation had challenged the 25 November notice issued by MoEF directing a stay on construction of its project - for not obtaining mandatory environment clearances before starting the project in 2004 - in the Bombay High Court. Lavasa is a subsidiary of the Hindustan Construction Company.

Watch Ajit Gulabchand talk to CNN-IBN:

See the Ministry of Environment and Forests' order dated 13 October, 2011:

Order Lavasa13102011

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Updated Date: Dec 20, 2014 04:48:28 IST