Infrastructure major Hindustan Construction Company (HCC) today expressed hope that it would soon get environment clearances for the first phase of its Rs 3000 crore Lavasa project, a hill city being developed near Pune.

Work on the site had come to a halt in December following an Environment Ministry order, which termed the construction as “unauthorised”.

“This whole issue is getting resolved as the environment clearances from the Ministry of Environment and Forests (MOEF) are underway and we are expecting that the clearances would be addressed shortly,” HCC Chairman, Mr Ajit Gulabchand said here while announcing the financial results of the company.

He added that a fund for restoration of environment at Lavasa may also be created, but said he has not heard of any penalty to be imposed by the government on the project.

“We have not heard of any penalty to be put on Lavasa...There might have to be a fund created for restoration of the environment, an activity which we were already carrying out voluntarily at Lavasa. So that fund would be entirely to be spent on Lavasa for environmental reasons,” Mr Gulabchand said.

He, however, declined to comment on the size of the proposed fund.

“No, I’ve no idea... We do not know,” he said, adding that due to stoppage of work at the site, some delays related to completion of the project have also happened.

In December last year, the Environment Ministry had ordered status quo to be maintained at the site by terming it “unauthorised” and observed that the Lavasa Corporation, the site developer and a subsidiary of HCC, has violated the Environment Impact Assessment (EIA) notifications.

Lavasa Corporation challenged this order in the Bombay High Court and the matter is now pending a decision.

Meanwhile, in February, the company had also applied for grant of environment clearance for the first phase of the project, which has a total area of about 2,000 hectares of land. The matter is presently under consideration of the Expert Appraisal Committee (EAC) of the Environment Ministry.

In January this year, after the entire drama unfolded, the Environment Ministry provided a ray of hope for the project by saying that it was ready to consider it on “merits” subject to fulfilment of certain conditions.

The conditions include imposition of penalties, creation of an Environmental Restoration Fund (ERF), formulation of a comprehensive Environmental Impact Assessment (EIA) and the management plan, although a final decision has not yet been taken on which of these will be imposed on the project.

According to an HCC release, Lavasa Corporation’s net profit declined by 20.18 per cent in 2010—11 to Rs 111.9 crore due to the order to stop work, while it reported a turnover of Rs 533.7 crore during the same period.

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