Lavasa in limbo: How politics, environmental concerns are holding up a Rs 50,000 cr project

Frequent policy flip-flops by various state governments and allegations of wrong doing by the activists have brought work at Lavasa, a Rs 50,000 crore township project near Pune, to a virtual standstill. The latest order by the Maharashtra government revoking the special planning authority (SPA) status for Lavasa Corporation, the company that is executing the project, has just added to the project’s woes. Lavasa Corporation is a subsidiary of Mumbai-based infrastructure company Hindustan Construction Company.

“The government should clarify their stand on Lavasa. How will we work if this keeps going on?Project is getting affected. Are they against the project?" asks Vitthal Maniyar, a close aide of NCP chief Sharad Pawar whose brainchild the project is learnt to be, and former board member of Lavasa. Maniyar is a founder of and an investor in the project.

The latest government action has brought the project under the government’s ambit and it now has to submit its proposals to the Pune Metropolitan Regional Development Authority (PMRDA).

According to Kiran Gitte, chief of PMRDA, the government had to issue a separate notification as there was no PMRDA-like authority earlier. “This was bound to happen with PMRDA coming into existence…. They (Lavasa) were given the special planning authority because there was no such authority in existence when the project was proposed. But now with the formation of PMRDA they will have to seek permissions from us,” said Gitte.

But will this mean that PMRDA will also verify the old permissions given by the SPA? “We will have to see that,” said Gitte, adding, “We will act if there is some complaint. But I will not say that the project will not be scrutinised. It will also be done if the need be.”

Lavasa Corporation, on its part, has claimed it has not yet received an official intimation on the revocation of its SPA status.

Background

In fact, the Lavasa project, which was started in 2002, has been controversial right from the word go due to political and environmental reasons. The project envisages building a new city and hill station on the bank of the Varasgaon dam on the Mose river. It is spread over 12,000 acres and encompasses 18 villages. The city was proposed to house residential facilities, hotels and be a tourist destination as well and slated for completion in 2029.

The reported closeness to Pawar and his Nationalist Congress Party only stymied the prospects of the project.

As the company kicked off land acquisition, the project hit the first roadblock with residents of Mugaon and surrounding villages – mostly Adivasis – opposing it as land was their only source of income.

They were against the large-scale cutting of trees and land acquisition by Lavasa.

“We were opposing but our voices were never heard. We then came to know that Medha tai (Patkar) was visiting a nearby village. We decided to pay a visit to her seeking help. We got the support from National Alliance of People’s Movements and Mose Khore Bachao Samiti was formed,” said Leelabai Margale, a resident of Mugaon.

“They had taken 5 acres of my land. They kept pressurising us with the help of the police. But we decided to keep fighting. This decision (the revoking of SPA status) is a big victory for our movement,” she claimed.

According to Suniti Su Ra, an activist and a close aide of Medha Patkar, the villagers were being given a short shrift by the company. “The villagers visited us with some documents they had got under the Right to Information Act. We studied the documents and realised there were irregularities,” she said.

The company was acquiring cultivable land. It was giving a negligible amount for the river water it used but it was going to build dams and earn money out of it, she claimed.

Thus NAPM decided to take up the issue. In 2008, a protest was organised at the Azad Maidan in Mumbai. Congress leader and then minister Patangrao Kadam promised action but nothing was given in writing. So a Jan Aayog was called. A committee with Arvind Kejriwal, Y.P Singh and Nirmalkumar Suryawanshi as members studied the project and submitted a report.

“The report made us we realise the company has been flouting many environmental norms during construction. So we decided to file a case in the high court,” Suniti said.

The activists had to struggle hard to even get the required documents. According to them, there were irregularities in the sale deeds. They organised a dharna in Delhi in 2010 and got to meet then environment minister Jairam Ramesh.

“We told him about all the issues we had found. He decided to give a stay to the construction and issue a show-cause notice,” Suniti said.

A central committee visited Lavasa and submitted its report to the ministry. After a few days, a conditional clearance was granted to Lavasa for construction over 2,000 hectares.

According to Suniti, the NAPM had questioned the SPA status as part of their struggle. “We felt the status gave powers to Lavasa to take decisions arbitrarily,” she added.

Ramesh recently admitted that even he was under pressure for taking decision on the project. “I was the first one to initiate an action against Lavasa. But I was branded as anti-national. We cannot make all people happy. It is important to maintain honesty in the government,” Ramesh said at a press conference in Pune (read here and here ).

All the while, the project suffered.

The project undone

According to Maniyar, the environment ministry’s action had a huge impact on Lavasa.

“We were ready to work with the environment ministry and were seeking all clearances. But this stand of the government and the notices issued had a negative impact. We couldn’t continue with the construction," he said.

According to him, Lavasa Corporation had taken loans from almost nine banks and the environment ministry’s notice rendered it difficult to repay them and also to any additional loan. Maniyar says the project has been stuck for last two years.

“We are struggling to work out the financial situation. What is our mistake? You should check the background of the investors in the project. Along with HCC, all the investors are from reputed background. Why doesn’t government clarify their stand about the project?” he asked.

Fadnavis, who was then the leader of opposition in Maharashtra, had raised the Lavasa issue in the legislative assembly.

“It seems that he was acting out of obligation. Narendra Modi had visited Lavasa when he was the chief minister of Gujarat and had praised the entire project. In fact, he had also invited the company to explore a similar project in his state. It is surprising that the present Maharashtra government, led by the BJP, is taking this stand. How are we supposed to work in this manner?” Maniyar asks.

He fears seeking permissions from PMRDA, which has many proposals in front of it, may lead to further delays.

The company has thus far invested Rs 6,500 crore and construction across two villages is already over. The city is largely dependent on tourism for the survival as of now. Parking and entrance fees are being charged apart from the money needed to use the facilities. However, the project has incurred a loss of Rs 4,000 crore.

Politically motivated?

As the project was conceived by Pawar and with his close aides involved in it, many believe that the decision to revoke the SPA status is politically motivated. They feel it is a message to Pawar. The senior political leader had supported Lavasa openly even when it was facing a flak for flouting norms (read here and here ). His daughter Supriya Sule and son-in-law Sadanand Sule had stake in the project, which they later sold. Though they are no longer associated with the project, there are others involved who are are said to be close to Pawar. Though the BJP leaders are claiming that revocation of the SPA status is a technical decision, it is going to have an impact on the project.

For the villagers too, the struggle is far from over despite they claiming victory after the recent government notification revoking the SPA status. Many of the children from the 18 villages had enrolled in the schools started here.

“We were told that the education will be free. But now they are demanding a fee of Rs 2,000 per month. This is a move to suppress us. But we will fight,” Leelabai claimed.

With the court case still on, the SPA status revoked and construction halted, Lavasa’s future remains bleak.

“We expect the required environmental clearances will be taken and norms adhered to, now that it has come under PMRDA. I hope this is not a ploy by the government to lend a helping hand to Lavasa by bringing it under their ambit,” said Suniti.

Meanwhile, the company is ready to work closely with the PMRDA and cooperate with the government to take the project forward.

“Lavasa could have been the first smart and clean city. That is how we are maintaining it now. We have to charge the money for the maintenance. But we are trying to work out on the finances. We will go ahead with the project in any case,” Maniyar is confident.