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
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.”