Building blocks before Lavasa Hill City

ROOTS

The idea was floated by NCP chief Sharad Pawar,who saw a need for a modern hill station as India had not developed one since Independence. The project started under the banner of The Lake City Corporation Pvt Ltd that later changed to Lavasa Corporation Ltd. Purchase of land started in 2002.

BUILDERS & PLANNERS

The company claims to have pumped in Rs 3,000 crore so far. The major stake is with Hindustan Construction Company (64.99%); promoters include Avantha Realty Ltd,Venkateshwara Hatcheries,and Pune-based investor Vithal Maniar. Master plan developed by design consultant HOK,United States.

LEADERS

Sharad Pawars daughter,MP Supriya Sule,and her husband Sadanand Sule had a minor stake in the company from 2002 but withdrew after January 2006 following allegations that the stakeholders profile was responsible for the speed at which the project was getting clearances. Aniruddha Deshpande,a builder close to Pawar,too sold his stake. Other close associates of the Pawar family,such as Maniar,Avantha Realty and Venkateshwara Hatcheries Ltd remain stakeholders.

CONTROVERSIES

These began with the land acquisition process,with protests coming from tribal residents (including Dhangar,Koli,Thakar and Katkari) of the 18 villages the project will span.

This later snowballed into a mammoth controversy about political links,undue favours,violation of environmental norms and many other things.

One PIL challenges the transfer of 141.15 hectares of land belonging to the Maharashtra Krishna Valley Development Corporation to Lavasa Corporation,on the grounds that this land was meant for rehabilitation of families displaced by the Varasgaon Dam and not for private use. The MKVDC was then headed by Sharad Pawars nephew Ajit Pawar.

GREEN ISSUES

Medha Patkars group NAPM has alleged that:

During 2002-2003 alone,the project got 31 no-objection certificates at lightning speed

Lakhs of trees were chopped for the construction

The project was exempted from paying stamp fees for transfer of land; these could be in the range Rs 1,000- 5,000 crore

The company had paid no royalty for extraction and use of minor minerals

The government took three days to acquire and transfer land to Lavasa,though it had been idle since 1975 when it was to acquire 912 acres of surplus land and hand it over to the landless under the land ceiling law

ACTION

The Ministry of Environment and Forests on November 20 issued a show-cause notice that points out:

The project had not got the necessary environmental clearances before starting construction.

Considering the project size,clearance should have been taken from the Union ministry and not from the state government,whose nod was limited to 2,000 hectares,the notice says

Construction should halt and the company should explain why construction already done should not be demolished.

Several violations,including the fact that the part of the construction at a height over 1,000 m above sea-level was not in keeping with environmental norms.

(Ministrys final order is expected by December 31).

LINE OF DEFENCE

Lavasa Corporation alleges that:

The showcause notice was issued in haste at the behest of NAPM.

It is an attempt at stalling the companys Rs 2,000-crore IPO,cleared recently by Securities and Exchange Board of India

Permission to build was granted by state government for 2,000 hectares; project exempt from 1994 and 2004 Environment Impact Assessment notifications.

No environmental degradation; master plan has won international awards for sustainable development; 25 expert organisations helped plan

All correspondence between state,Centre and Lavasa on various permissions has been suppressed.

CLEARED,PENDING

In its recently filed Draft Red Herring Prospectus ahead of its planned IPO,the company says it has got a total of 20 permissions from various agencies starting from the state Urban Development Department which declared the 18 villages,excluding forest lands,as a hill station in 2001. Permission received from state Environment Department,from Collector to purchase private land,and from Development Commissioner (Industries) to purchase 4,000 hectares agricultural land. Application for relaxation of height for special structures,commercial structures,a hotel and public buildings pending with UD Department.

STATUS

The first town of Dasve is to be completed by 2011,followed by the other four,the last by 2021. In its Draft Red Herring Prospectus,the company has declared that as on June 30,2010,it has executed lease deeds,agreements to lease,or issued allotment letters for 896 apartments,461 villas,127 villa plots and 399 rental housing units. It has also entered into MoUs for long-term lease of 90.54 acres to various customers in the commercial,institutional,hospitality and social sectors. A total 106,384 sq ft retail space has been leased to Lavasas subsidiary DRL for setting up and operating retail,food and beverage and other such outlets.