Don’t blame environmental rules for Lavasa’s failure

In June of this year, leading newspapers reported Lavasa, a recently constructed private hill city as ‘a large-scale infrastructure project gone bad.’ With an investment of US $210 billion stuck in the project, its non-completion has left thousands of people in the lurch. Many of them had put down their life’s savings or had borrowed money to invest in a home or commercial facilities. Now it seems uncertain whether Lavasa will ever turn into the Italian hill town that its proponents had promised.

Over the years, a number of show-cause notices, legal cases and complaints were filed against the developers on the grounds that the project was granted ‘undue favours’ in land allocation and non-compliance with environment regulation. The project developers were also granted the status of a Special Planning Authority (SPA), one that is usually reserved for government organisations. In 2017, the Maharashtra government revoked this special status and brought Lavasa under the supervision of the Pune Metropolitan Region Development Authority (PMRDA).

An ‘approved’ project?

The project, located 65 kilometres from Pune and about 190 kilometres from Mumbai, started construction in 2004. The plans for this hill station city are spread over 18000 acres, encompassing 18 villages in the ecologically rich Western Ghats of Maharashtra.

In November 2010, the environment ministry issued a show-cause notice to the Lavasa Corporation Limited (LCL) to explain why unauthorised construction had been carried out without mandatory approval under the Environment Impact Assessment notification, 2006. By January 2011, the ministry held that they could ‘consider the project on merits.’ This was conditional to LCL paying a penalty, agreeing to set up an Environmental Restoration Fund (ERF) and abide by stringent environmental safeguards. The company also had to provide “credible” information related to the project and carry out a comprehensive EIA.  On November 9, 2011, they were granted an environment clearance for the first phase of construction, over 2000 hectares.

The National Alliance for People’s Movement (NAPM) fought for the rights of land losers and eventually secured a favourable order from the Maharashtra government. The tribal land holders were allowed to retrieve 191 acres of land from LCL in 2015. The company claimed that this would not affect the project as the lands were ‘unbuildable hilly areas’, even though they had obtained it for the project. They also said that their deals were legal but did not contest this repatriation of land. Even as all this was playing out, the construction of this dream township with residential and tourist facilities, carried on, in fits and starts.

Did environmentalism come in the way?

Developers have claimed that environmental concerns have caused delays, leaving the project in limbo. They state that notices from the environment ministry rendered it difficult to pay back loans. But could this situation have been avoided had the project taken a careful and legal approach?

Environment regulation was introduced in countries like India in the 1990s to ensure that all detailed project parameters are studied and alternative sites assessed so that good decisions can be arrived at on projects. This was meant to filter out unviable or harmful projects. But projects have been allowed to come up without the required approvals and in many cases governments even encourage them to do so using reasons like ‘public interest’, ‘economic growth’, and national security. Use of these kinds of justifications means that projects are not assessed as rigorously as they should be. This leads to negative consequences.

In this case too, because detailed social and environmental impact assessments were not done before undertaking this large-scale land use change, all the impacts that were ignored from project planning have come back to bite it.

Did politics influence the project? 

Lavasa’s fate is made to appear like an unanticipated problem caused by environmentalism and politics. However, the origins of the failure of Lavasa type grand projects need to be traced back to their planning and approval procedures.  The fact that this project was set up on this ecological landscape without approvals is itself testimony of the political support for it.

Now that the project is stuck media stories claim that the project is caught in political rivalry. Government agencies and experts who signed off these projects have not come forward with any explanation for why the project was allowed to be set up in the first place and what resulted in the sudden change of stance on this investment.

Environment versus development Indians have been fed the banal debates of environment versus development for a very long time now. But these are mere diversionary tactics. Lavasa is one of the numerous examples where we get neither environmental protection nor project development. And we may never know who else got what.

The authors are with the CPR-Namati Environment Justice Program. Views are personal.