Lavasa gets Jairam Ramesh blow: All work in lake city illegal

In a major blow to the ambitious Lavasa lake city project near Pune, the Union environment ministry headed by Jairam Ramesh has termed all construction activities in the 25,000-hectare project illegal.

A show cause notice from the ministry deems all structures so far unauthorised as they have been built without any environment clearance under its notifications of 2004 and 2006.

The notice requires that the “status quo ante for construction and development as on date should be maintained” pending decision on the notice. It simply means that no further construction can be undertaken.

The Lavasa Corporation, a group company of Hindustan Construction Corporation (HCC), has also been asked why the unauthorised structures should not be demolished “in entirety”. It means that all big bungalows, villas and farm houses may face action now.

Ramesh told DNA that he had given 15 days to the state government and the promoters to respond, and halt all activity until a decision was taken in the matter.

Many influential politicians, bureaucrats and others have villas and plots in the Lavasa lake city. No action has yet been taken. Former revenue minister Narayan Rane had gone on record a few weeks ago saying that it was too late in the day to initiate any move since it had already come up.   

He has suggested that the state should impose only compounding fee on the developers.

Of late, there has been a flood of petitions to prime minister Manmohan Singh and UPA chairperson Sonia Gandhi complaining about how the entire forest land had been encroached upon, acquired and developed in violation of rules. Ramesh decided to act swiftly as the Maharashtra government had been dragging its feet.

The ministry’s notice has put the fate of the real estate firm’s proposed Rs2000-crore IPO in jeopardy. It was recently cleared by the Sebi. The notice came at a time when Lavasa Corporation is already in the thick of a bribery scam, and its offices have been raided by CBI.

A spokesperson of the Lavasa corporation said, “We are still to receive the notice. As and when such a notice is received we will respond after studying it.”

When asked why the firm figures on the list of recipients of loans from banks which have been under the CBI scanner in the loans kickback scam recently, and there’s a fear in the market that banks may review all the loans given to several companies, Ajit Gulabchand, chairman of HCC & Lavasa, defended the project.

“Lavasa is a project of great importance to the Maharashtra government’s policy of building a hill station. In this context, we had to raise money with the banks and all transactions have been very clear and syndicated without any special favours or anything at all.”

The show cause notice asks the developers to provide the status of the project “with photographs/satellite maps indicating the constructions as on 18.3.2004, 7.7.2004, 14.9.2006 and up to date”. It says that the developers had built over 1,000 metres above sea level on 47.3 hectares of land without obtaining prior clearance.