Economy

Why the delay, Lavasa investors ask MoEF

S. Shanker Mumbai | Updated on November 12, 2017


The stand off between Lavasa Corporation and the Ministry of Environment and Forests, enters a crucial phase with the next hearing of the case scheduled for January 27.

Looking beyond MoEF’s show cause notice served in November 2010, it should be said a sizable number of investors who are now having sleepless nights would have been spared the pain had the MoEF order been issued earlier. About 1,850 apartments have been sold so far totalling over Rs 1,000 crore.

Ms Shobha Jain, Project Director, Educomp, whose joint venture company is setting up an international school at Lavasa, said she was gearing up for admissions in February when the MoEF diktat came. Unwilling to divulge investment details, she said one lakh sqft of school building was ready and 90 per cent of apartments to house her staff too were complete. The staff and teachers were preparing to shift to Lavasa, she said.

An investor, who has a sizable stake in a services project under development, said his bank loan running into crores of rupees had been activated. “My primary concern is whether construction is authorised or not. The environment issue can come later.”

“Where was MoEF when Lavasa’s full page advertisements were splashed across the country? Now, hundreds of investors like me do not want our names mentioned as what was once thought of as a wise investment today is an embarrassment.”

The same would be the case for the international brands that have lent their name to the enterprises that have or are setting shop in Lavasa, not to mention the promoters of the project. Everyone’s reputation is at stake, despite all the due diligence done before investing, not to speak of the banks that have financed projects, he said.

Eight banks and financial institutions hold 11 per cent at an enterprise value of Rs 10,000 crore in the Lavasa Corporation via deep discount convertible debentures. This is beside the advances made to individuals and institutions.

Apollo Hospitals, which is setting up a 200-acre health and wellness centre, opened a 60-bed hospital recently.

The Ministry would have done all a favour if Lavasa’s application for project expansion of 3,000 hectares about 18 months back, which Lavasa claims is still pending, been rejected then and questions raised on the on-going work, another investor said.

While Lavasa had primarily gone to court in December to challenge the MoEF’s jurisdiction over the project, contending that approvals was obtained under the ‘Hill Station Regulations framed under the Maharashtra Town Planning Act (1996)’, the court preferred to club a couple of public interest litigations with the case. It also ordered the MoEF Director to hear Lavasa Corporation regarding the question of “grant or otherwise status quo” in connection with the show-cause notice dated November 25, 2010.

Published on January 25, 2011

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