* Clearance not given to $31 billion project
* Lavasa had not met conditions - ministry
* Land acquisition controversial issue in India
(Adds HCC chairman's comments)
By Kaustubh Kulkarni
MUMBAI, Oct 14 India's federal ministry of
environment and forests (MoEF) on Friday declined to approve the
first phase of a $31 billion township in the latest clash over
land acquisition between big business and authorities in the
Lavasa, a sprawling hillside development in western India by
a unit of Hindustan Construction Co (HCC) , has not
complied with conditions specified by a ministerial panel
probing the project's violation of green rules, a ministry
"The final decision on the environmental clearance cannot be
taken till all the pre-conditions are met including credible
action by the state government of Maharashtra," the order said.
"This is a completely discriminatory act," HCC chairman Ajit
Gulabchand told reporters in comments broadcast on Indian TV
"These pre-conditions have never been laid down before," he
said in response to the order.
India's environment ministry asked state authorities to take
action against Lavasa in January after writing to the developer
in November asking why the construction should not be
"We are disappointed with the MoEF's order today. In fact,
it is not even an order. After eleven months of continued
delaying tactics, the MoEF has yet again evaded grant of
environment clearance," a Lavasa spokesman said in statement.
"To suggest that the state government of Maharashtra has not
yet taken action, is not a good enough reason for delaying
environment clearance to such a large and important project,
under development for last seven years."
Land acquisition for development has become a
politically-charged issue in India, as big businesses comes up
against angry landowners and a heavy-handed environment ministry
that has been accused of stymying growth in Asia's third-largest
Protests by local villagers and interventions from the
government have delayed a $12 billion steel mill by South Korean
firm POSCO , spooking investors and harming foreign
interest in infrastructure projects.
The conditions set by the panel included a written
commitment by Lavasa that says it will not repeating
environmental violations, a revision of development areas to
conform to town- planning norms and the creation of an
environmental restoration fund.
Shares of Hindustan Construction Company, which have lost 58
percent in value over the last 12 months, ended at 28.3 rupees
on Friday, up 0.53 percent in a firm Mumbai market.
(Writing and additional reporting by Henry Foy; editing by Jui
Chakravorty and Malini Menon)