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Ethics and governance Lavasa Case Study
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Ethics and governance-lavasa

Mar 28, 2015

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Nikhil Sachdeva
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Page 1: Ethics  and governance-lavasa

Ethics and governance

Lavasa Case Study

Page 2: Ethics  and governance-lavasa

ABOUT LAVASALavasa is free India's first hill city being developed by HCC. It is a private , planned city being built near Pune.

A 3 hours drive from Mumbai and an hour’s drive from Pune, the city is a one fourth of the size of Mumbai.

The master plan of Lavasa (12,500 acres) is developed by internationally renowned design consultant HOK, USA and is based on the principles of new urbanism that brings together all the components essential to daily life in a more organized manner

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Continued…..Lavasa city has been designed on the principles of new urbanism, and is said to offer the best-in-class infrastructure, international educational institutions, leading non-polluting industries, exciting avenues of leisure & tourism and homes for comfortable living.

An ecologically sustainable environment will help you live, work, learn and play in harmony with nature at Lavasa. Over 25,000 lakeside apartments and villas with over 50,000 employment opportunities should be available at Lavasa city.

Apart from it's diversity in work possibilities, Lavasa also present some wonderful housing options for permanent residents. Some other famous concepts of hill cities, but all developed during the British Raj, are Shimla, Kullu and Ooty.

Page 4: Ethics  and governance-lavasa

LocationIt is located in the picturesque landscape of the Sahayadri Mountains and is set amidst 7 hills and 60 km. of lakefront.

The area that is demarcated for Lavasa is located in the Western Ghats of India, on the banks of the Baji Pasalkar Reservoir behind the Warasgaon Dam which is the primary source of water for nearby city of Pune.

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It is spread amidst 100 sq. kms., which is almost 1/4th the size of mumbai.

Lavasa is at its magical best during the monsoon season. The rains arrive, bringing with them the promise of months filled with pattering showers, lush green hills with many waterfalls playfully tumbling down them, and days are spent looking out at the rain through a wet window, smiling at a paradise that has been found.

The valley is full of extraordinary flora and fauna. Throughout the year, the temperature remains from 4 to 36 degree Celsius.

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Lavasa Corporation Limited, a subsidiary of Hindustan Construction Company Limited (HCC), is developing the project with plush(luxurious) promises of a dream abode. Scheduled to finish by 2021, the first phase, Dasve town, may become operational by mid next year.

The company’s dreams, however, have become a nightmarish experience for 18 villages from where the land has been “acquired” to develop Lavasa.These 18 villages, mostly inhabited by tribals, are spread out in the Mulshi and Velhe taluka of Pune district.

On speaking to villagers it was found that these villagers were cheated by local agents land records changed, loss of land, bouncing of cheques, threats and living in constant fear.

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CASE STUDY

Page 9: Ethics  and governance-lavasa

IntroductionLavasa has been known to me for past 5 years or so, as a new city / hill station coming up near Pune, a city which would primarily be a luxury tourist & education center.  

The most powerful man in Maharashtra, Sharad Pawar & his family were always said to be the benefactors & promoters of Lavasa.

Lavasa is a hub for world-class educational institutions, hospitality and training centers, it's an arena for the mind where learning is a way of life.

Lavasa offers a refreshing climate with vast open spaces provides innumerable recreation and leisure activities like golf, trekking, rappelling…to satiate the adventurer in you.

Page 10: Ethics  and governance-lavasa

Lavasa- Scam or Development?

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SCAMWhile there were murmurs of Lavasa wrong doings & local opposition for the past year or so,  the project only made prime time news when Narayan Rane, the then state revenue minister opened a can of worms and said that the Maharashtra government was probing irregularities in Lavasa.

. Lavasa has been asked to provide reasons why the government should not raze all construction after 2006.

Lavasa has since replied to the notice, saying “It was not necessary for our project to get an EC (Environ Clearance) from the MOEF (Ministry of Environment & Forests). Complaints made by the NGOs are baseless.”

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Accusations Against Lavasa :Land being acquired by hook or crook.

Inadequate compensation.

State machinery used to coerce farmers

No proper plans to rehabilitate the farmers affected

Land being acquired at government rates when market rates are much higher

Most construction without necessary central govt. environment sanctions

State environment sanctions rigged / bought.

Fundamental issue of whether the state should have in the first place given out prime & fertile agricultural land to a private corporation

Lavasa allowed to build bunds in the Varasgaon backwaters, jeopardizing Pune’s water supply

Land leased includes land under water. The fact that the water is priceless & critical for the Pune area seems to have been ignored.

Lavasa to pull 3 TMC water from Pune. Pune already struggling with water supply

Water resources in the area are inadequate to sustain Pune’s growth as well as Lavasa.

Protesters say that Lavasa is being projected as a city for all, when in reality it’s only a luxury destination for the ultra rich.

Page 13: Ethics  and governance-lavasa

Lavasa has been granted permissions in quick time by bending / breaking the law.

Land leased for 30 yrs by govt. which in fact will never be returned and is as good as sold

Land leased at throw away prices

Mega corruption for Lavasa approvals & sanctions

All new cities developed in the past were developed by the government, Lavasa is a private enterprise. Many find this improper.

Lavasa is essentially a city for the rich. The other segments of society will exist in Lavasa only to serve the rich.

Shortsighted. With dam capacities dropping rapidly due to silting, the water storage will keep dropping while Lavasa consumption will keep rising

Lavasa constructions along the backwaters are bad for environment & will also stop actions like raising the dam height in the future

Page 14: Ethics  and governance-lavasa

DevelopmentThere is a plan for development

Pune like most Indian cities is being overwhelmed by migrations from other parts of India. Lavasa could take some of the load.

Lavasa could bring in tourists from across the globe, would help the economy of the area

Lavasa claims that some 97000 jobs will be generated and that for most jobs, locals would be employed.

Lavasa provides an alternative for people to stop crowding a few pockets of Pune city & instead move to a new city

Lavasa is expected to attract world class education institutions & technology companies to the area

Lavasa has the luxury of a fresh start & can fix the things that have gone wrong in most Indian cities

Most of rural India struggles to makes ends meet. It is likely that the local people whose lands were bought by Lavasa & who are employed at Lavasa would be financially better off than earlier.

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ActionsMedha Patkar & her team led by Ms. Suniti have been opposing Lavasa since 2008. However only in the last couple of months has the protest really picked up steam, with many well known activists like Anna Hazare joining in and the Ministry of

Environment & Forestry taking a tough stand on Lavasa. Anna Hazare has written a letter to the Chief Minister & another letter to the Prime Minister about the Lavasa matter.

The activists want Lavasa stopped for good. They want the corruption to be investigated and the guilty to be punished severely. They say that what’s built illegally should be pulled down.

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ConcernsMany of our top banks are heavily invested in Lavasa.

A section of the protest seems to have no interest in resolving the matter. They just want to finish off Lavasa & proclaim victory.

There has always been a criticism of agitations led by Medha Patkar that the focus is on blocking rather than solving.

India has a very bad record at bringing the corrupt to book. In all probability the corrupt big fish will again escape. A few small players might get prosecuted.

A valid point made by one shahir was that – “Lavasa says they will give us jobs but what they want in reality is for us to be dogs at their door, their watchmen, drivers, sweepers… We are not educated, we wont  get any dignified jobs at Lavasa, we prefer farming.”

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Most farmers have no money management or other skills & will end up blowing the sum they get after sale and end up doing menial jobs in Lavasa or in Pune city.

There’s great anger in the people affected.

Laws & Equity have to apply just the same to all. So while you want justice for the landless labourers & small farmers there also has to be justice for the big players who have invested crores into Lavasa.

Although there is no reason to question Medha Patkar’s integrity, her agitations are so far on the extreme left that there’s just no scope for a global perspective or private enterprise.

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Displacement of VillagersThis is not the first time that these villages are getting displaced. In the mid-1970s, the state owned Maharashtra Krishna Valley Development Corporation (mkvdc) acquired land from these 18 villages to construct the Warasgaon irrigation-cum-drinking water dam.

The dam is built on the Mose river and has its backwater spreading to 18 km. While acquiring land for the dam, some villagers were rehabilitated to nearby tehsil s and some were allotted land upstream of the dam.

Villagers say they have lost land to the project, company terms allegation baseless.

Page 20: Ethics  and governance-lavasa

Video showing conversation with Ajit Gulabchand regarding

LAVASA ISSUE

Page 21: Ethics  and governance-lavasa

STAKEHOLDERS MODEL

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Stakeholder Theory

A stakeholder is anyone who has an interest in what a business does or an influence upon the business. Large organisations have many different stakeholder groups.

Some are internal to the business, like employees. Others are external as they are outside of the business, like government.

It is important to identify and balance the needs and expectations of these groups, and to act responsibly in view of all of them in order to avoid conflict and ensure the business is as prosperous as possible and keeps its ‘licence to operate’.

They are vital to the survival and success of the organization.

Their relationship with the organization enables them to be benefited by the organizations’s actions and operations.

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PRESENT STATUSThe ministry of Environment and Forest accused the LCL for violatingThe environmental laws and the Environment Impact Assessment Notification (EIA)1994,2004 and 2006.

The LCL in reply to this filed in a writ petition in the Mumbai High court Against the ministry of environment and forest.

The Honorable High court , on 17th Dec,2010, ordered the ministry to Send a committee to the lavasa site and inspect the site for at least 3 days And then submit a report to the ministry for the final analysis of the project.

Till the time the committee does not submit the report, the show cause noticeIs applicable on the project and the LCL and no further construction can be Done before the ministry gives its final verdict over the project.

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Cont.

The MoEF made a committee of 9 members which included the advisor of theMoEF Mrs. Nalini Bhatt, and the chairman of the committee Mr. Naresh Dayal.

The committee visited the site from 5th-7th January, 2011 and inspected every Construction, every site of the project, assessed the environmental state and Accordingly submitted the report to the MoEF which included a list of damagesThat the LCL has caused to the environment conditions .

However the chairman of the committee is being criticized for pointing out very Minor issue and damages to the environment.

Despite of all these issues , the MoEF is still ready to consider the project onMerits , provided the company works on some stringent terms and conditions setBy the ministry.

Page 26: Ethics  and governance-lavasa

1. Submit the Detailed Project Report (DPR) for the project.

2. Submit information related to all contracts with various contractors

for construction and other works.

3. Submit audited statements for all amounts spent directly or indirectly

on the project.

4. Submit information related to all contracts entered into for the

purchase/acquisition/lease/transfer of lands.

5. Submit full details of future planning .

For the purpose of ensuring immediate and proper compliance with the above , LCL is directed to do the following :