STILL BORN CITY?

The fu­ture of Lavasa, dream project of NCP strong­man Sharad Pawar, looks bleak af­ter its sta­tus as spe­cial plan­ning au­thor­ity is re­voked

India Today - - REAL ESTATE - By Ki­ran D. Tare

The Ma­ha­rash­tra gov­ern­ment’s an­nounce­ment on May 23, re­vok­ing the spe­cial plan­ning au­thor­ity (SPA) sta­tus for Lavasa, could have been passed off as just another pol­icy dik­tat—but for the pro­tag­o­nists in­volved.

Lavasa, an un­der-con­struc­tion hill city near Pune, was orig­i­nally vi­su­alised by Na­tion­al­ist Congress Party (NCP) strong­man Sharad Pawar. His son-in-law, Sadanand Sule, even owned a 12.7 per cent stake in the project un­til 2007. The his­tory of the project, though, goes back to the early 2000s. As the story goes, while be­ing flown from Mumbai to Pune in a he­li­copter, Pawar spot­ted a large tract of va­cant land in the Mul­shi val­ley area of the Sahyadri moun­tain range in Ma­ha­rash­tra. Thinking of it as an ideal spot to plant a new, model city (as con­ceived by his friend, Anirud­dha Desh­pande), Pawar took the pro­posal to realty baron Ajit Gu­la­bc­hand and his com­pany, HCC. Gu­la­bc­hand is an old friend of Pawar’s, and Lavasa City Cor­po­ra­tion (LCC), the firm re­spon­si­ble for the city’s con­struc­tion, is part of HCC’s real es­tate wing.

In 2001, the Ma­ha­rash­tra gov­ern­ment sanc­tioned 10,000 acres of land for the con­struc­tion of this mod­ern city, which would be spread over 20 vil­lages and ham­lets. The first phase of con­struc­tion, Dasve, on 1,700 acres, be­gan in 2005 and has been com­pleted. Work on the sec­ond phase, Mu­gaon, is stalled be­cause of reg­u­la­tory is­sues.

Af­ter the May 23 an­nounce­ment, po­lit­i­cal ob­servers were quick to sug­gest that the fate of Lavasa is yet another stick that chief min­is­ter Deven­dra Fad­navis could wield against the NCP and Pawar—whose nephew, Ajit, is cur­rently fac­ing an En­force­ment Direc­torate probe in con­nec­tion with al­leged be­nami com­pa­nies bag­ging ir­ri­ga­tion con­tracts. The sig­nif­i­cance of the move was not lost on Pawar, who called on Fad­navis that very evening “to dis­cuss is­sues per­tain­ing to farm­ers”. While what they dis­cussed re­mains a se­cret, Pawar’s con­tin­u­ing in­ter­est in Lavasa is well known. Lavasa was the first pri­vate project to re­ceive the SPA tag, grant­ing it the power to draw up land use plans, de­velop land in its ju­ris­dic­tion and sanc­tion con­struc­tion. The late Vi­las­rao Desh­mukh, then chief min­is­ter, had granted the project SPA sta­tus at a spe­cial cabi­net meet­ing held at a Lavasa ho­tel in June 2007.

In 2010, con­struc­tion came to a halt be­cause of re­stric­tions im­posed by the Union ministry for en­vi­ron­ment— Lavasa had be­come a pawn in a power strug­gle be­tween the Congress and Pawar. That year, then Union min­is­ter Jairam Ramesh had dis­patched an of­fi­cial to Pune to serve LCC a stop-work no­tice, cit­ing de­struc­tion of the en­vi­ron­ment. It was a big blow to Pawar, then Union agri­cul­ture min­is­ter. Though the com­pany soon over­came the shock—un­der­tak­ing a plan­ta­tion drive and tak­ing mea­sures to stop soil

ero­sion—the al­le­ga­tion that it was de­stroy­ing the lo­cal en­vi­ron­ment stuck.

As a re­sult, HCC had to post­pone its ini­tial pub­lic of­fer­ing (IPO) for Lavasa. The com­pany has tried to launch the IPO thrice since then, but the mar­ket let them down. HCC holds a 68 per cent stake in LCC, with the re­main­ing held by the Avan­tha Group (17 per cent), Venkatesh­wara Hatcheries (8.8 per cent) and the Ma­niar family (6.2 per cent). So far, sev­eral apart­ments and bun­ga­lows have been con­structed, as well as ho­tels and con­fer­ence halls. A one BHK apart­ment in Lavasa to­day costs about Rs 30 lakh, while the bun­ga­lows go for about Rs 4 crore. Among the prom­i­nent buy­ers is for­mer Union min­is­ter Arun Shourie. “There was no is­sue when I bought the prop­erty there,” Shourie says. “I have no com­ments to of­fer on what will hap­pen (to Lavasa af­ter the lat­est de­ci­sion).”

Fad­navis’s de­ci­sion to can­cel Lavasa’s SPA sta­tus was based on a report by the state pub­lic ac­counts com­mit­tee (PAC) last year. The panel, headed by Congress MLA Gopal­das Agrawal, had noted that be­tween Oc­to­ber 2002 and Fe­bru­ary 2009, Lavasa pur­chased 214 hectares of land with­out tak­ing the nec­es­sary per­mis­sions. The land was reg­u­lated un­der the Ur­ban Land Ceil­ing Act, which man­dates that the per­mis­sion of the con­cerned district col­lec­tor must be taken be­fore pur­chas­ing it. The col­lec­tor’s of­fice has re­cov­ered penal­ties of Rs 11.9 crore from Lavasa for flout­ing the norms. A 2012 report by the Comp­trol­ler and Au­di­tor Gen­eral of In­dia had also rec­om­mended the can­cel­la­tion of Lavasa’s SPA sta­tus. “The PAC rec­om­mended re­vok­ing Lavasa’s SPA sta­tus,” says Fad­navis. “Now, the Pune Metropoli­tan Re­gion De­vel­op­ment Au­thor­ity (PM­RDA) will be the plan­ning au­thor­ity for it.”

The project has met with crit­i­cism from en­vi­ron­men­tal ac­tivists as well. Vish­wamb­har Choudhary, who had filed a pe­ti­tion in the Bom­bay High Court, al­leges that Lavasa vi­o­lated floor space in­dex (FSI) norms while con­struct­ing res­i­den­tial and com­mer­cial build­ings. “Lavasa al­ready has [con­structed] build­ings in two of the 20 vil­lages. I hope the re­main­ing 18 will be saved now,” Choudhary says.

State BJP spokesper­son Mad­hav Bhan­dari, Choudhary’s co-pe­ti­tioner, also al­leges that Lavasa’s con­struc­tion of a bar­rage at Varas­gaon dam—which sup­plies wa­ter to Pune—went against the pro­vi­sions of the Ir­ri­ga­tion Act. “Wa­ter was made avail­able to Lavasa be­cause in­flu­en­tial politi­cians are as­so­ci­ated with it,” Bhan­dari al­leges. An LCC of­fi­cial de­nies al­le­ga­tions of FSI vi­o­la­tion and wa­ter di­ver­sion. “All con­struc­tion was as per rules. The Kr­ishna Val­ley Cor­po­ra­tion had al­lowed us to con­struct the bar­rage. More­over, the gov­ern­ment rep­re­sen­ta­tive was at all the SPA meet­ings. Let them do a scru­tiny of our de­ci­sions,” he says.

Mean­while, Fad­navis him­self down­played the May 23 an­nounce­ment, say­ing “Lavasa will now have to ap­proach the PM­RDA for per­mis­sions. If there are vi­o­la­tions, an in­quiry will be con­ducted... but that does not mean

Af­ter los­ing the SPA tag, Lavasa will no longer be en­ti­tled to draw up land use plans, de­velop land in its ju­ris­dic­tion or sanc­tion con­struc­tion

there will be one for ev­ery de­ci­sion.” An of­fi­cial with Fad­navis’s of­fice, though, says the CM’s state­ment was only for show. “The PM­RDA will go through each and ev­ery pa­per per­tain­ing to Lavasa,” he says, point­ing out that the au­thor­ity re­ports to the CM’s of­fice.

Lavasa City Cor­po­ra­tion, while deny­ing the al­le­ga­tions of ir­reg­u­lar­i­ties, tried to put a pos­i­tive face to the May 23 an­nounce­ment. “This brings Lavasa into the Pune metropoli­tan area, and the com­pany will ben­e­fit from the broader ur­ban de­vel­op­ment plan of the re­gion,” it said via a press re­lease. An of­fi­cial with LCC, who does not wish to be iden­ti­fied, also dis­misses al­le­ga­tions of FSI vi­o­la­tions and wa­ter di­ver­sion. “We have [un­der­taken con­struc­tion] as per the rules. The Kr­ishna Val­ley Cor­po­ra­tion al­lowed us to con­struct the bar­rage. More­over, the gov­ern­ment al­ways sent its rep­re­sen­ta­tive to the SPA meet­ings. They can con­duct a scru­tiny of our de­ci­sions now.”

Gu­la­bc­hand him­self says he can’t com­ment on the mat­ter as he has not yet re­ceived a for­mal or­der from the gov­ern­ment. “I was trav­el­ling abroad when the gov­ern­ment an­nounced its de­ci­sion. I was ex­pect­ing them to send us a for­mal or­der in a day or two, but even af­ter a week we have not re­ceived any com­mu­ni­ca­tion,” he says. “We don’t know what the ex­act or­der is yet.” HCC it­self is cagey on whether it sees a con­certed ef­fort by the gov­ern­ment to cre­ate prob­lems for it. A com­pany of­fi­cial says that de­ci­sion-mak­ing by the gov­ern­ment slowed down a few years ago, and is still lan­guish­ing. He refers to another de­ci­sion by the gov­ern­ment to de­lay a pay­ment of Rs 640 crore, due to HCC for the con­struc­tion of the Ban­dra-Worli sea link in Mumbai.

For her part, Supriya Sule, Sharad Pawar’s daugh­ter, has washed her hands of the project, say­ing that her hus­band Sadanand had “very very nom­i­nal” shares in Lavasa which he sold “ages ago”. “I don’t have a view on the Lavasa de­vel­op­ment,” she says. “We sold [our] shares ages ago, be­fore the project be­came large. We per­son­ally have zero fi­nan­cial as­so­ci­a­tion with it.” She re­fuses to com­ment on Lavasa’s fu­ture either. “It doesn’t con­cern me. It is a de­ci­sion taken by the gov­ern­ment of Ma­ha­rash­tra. I haven’t thought about whether Lavasa has a fu­ture or not.”

Pho­to­graphs by DANESH JASSAWALA

ON THE ROCKS Wa­ter­front prop­er­ties at Lavasa hill city

STUCK IN THE VAL­LEY

A panoramic view of the bud­ding hill city

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