Ajit Gulabchand, the billionaire businessman and promoter of Lavasa township — intended to be India’s first new hill station since Independence — was edgy and tired when he met the press at a five-star hotel in the city on Thursday.
The frequent trips to New Delhi, meeting the all-powerful minister Jairam Ramesh and his team to clear the air over the alleged “environment violations” seemed to have wound him up like a coil ready to spring.
And spring he did.
Gulabchand was the first to fly off the handle when a scribe asked if his close proximity to Sharad Pawar landed him in this unenviable situation.
“What does Pawar have to do with the project?” asked Gulabchand, more than a hint of annoyance in his tone and gestures. “HCC is a listed company and Lavasa has filed for an IPO. We have given details of all the investors to Sebi. It’s all transparent.”
Pawar, the Nationalist Congress Party president who has been vocal in his defence of the project, has earlier acknowledged that his daughter Supriya Sule and her husband Sadanand were stakeholders in the project in its initial years.
A tabloid reporter pestering Gulabchand with an uncomfortable question over the alleged “land-grabbing issue” made him snap back, asking if the reporter had visited Lavasa. When the reporter answered in the affirmative, a restless Gulabchand vaguely responded: “I cannot answer this question. I cannot help if you have met with two people and want to magnify the issue.”
Corporate India would find it difficult not to sympathise with Gulabchand, considering a couple of high-profile projects in the country have been scrapped or fined by the Ministry of Environment and Forests (MoEF) on account of environmental-norm violations. Earlier this week, the ministry said it would impose a “substantial” — but still unspecified — penalty against the Lavasa project, the upmarket town about three hours by road from Mumbai.
Late last year, the MoEF had scrapped a proposal from Anil-Agarwal-led Vedanta for setting up a 5 million tonne aluminium refinery at Lanjigarh in Orissa.
Other construction and engineering companies agree with HCC. Earlier this week, Larsen and Toubro chief financial officer YM Deosthalee said projects over Rs50,000 crore have been deferred in the nine months to December at the government’s end on account of “decision-making in certain ministries taking longer-than expected.” Gulabchand said HCC will “clearly not” meet its order-book target of Rs25,000 crore by March. HCC’s order backlog as on December 31 stood at Rs18,505 crore.
“Notwithstanding the GDP growth rates, the ground reality is that real construction contracts are not rolling out,” explained Gulabchand.
The fixation on Lavasa project had forced HCC’s third-quarter results announcement to the backseat. The company’s profits were down 46% from the year-ago period to Rs7.9 crore and revenues rose just 8.7% to Rs1,027 crore.
Still, the Mumbai-based company’s performance was barely discussed, evidenced by the fact that chief financial officer Praveen Sood did not speak even once.
The HCC stock has been under severe pressure in the last one year, plummeting about 75% to Rs40.25 compared with a 7.75% rise in the Sensex to 19,007.53 on Friday.
“We want a resolution (to the Lavasa issue). It is important because this should help put an end to a certain amount of cynicism at the government level,” said Gulabchand.
As the air-conditioning cooled the temperature, Gulabchand made way for the exit, but not before the last words:
“If the light bulb in this room isn’t working, you are not going to bring down the entire hotel.” He perhaps implied that even if his company had done something wrong, it wasn’t right to stop the entire project.