Relief is just around the corner for the Lavasa City creditors since the City Corporation led by Aniruddha Deshpande has placed an Rs. 540 Crore bid to own the unfinished project. But, financial creditors, which include the homebuyers might have to accept a 90% haircut provided the committee of creditors acknowledges the bid of the City Corporation.

The Hindustan Construction Company [promoter company], had expressed earlier that the insolvency tribunal had consented its plea to begin proceedings in opposition to its real estate arm, Lavasa Corporation.

First Smart Hill City

This Lavasa Pune project was publicized to develop into the first smart hill city in India to be privately built before the entire plan was shattered owing to financial troubles. The smart city was said to be occupying one-fifth of Greater Mumbai size and was designed to house three lakh people. The company has built more than 2200 villas, hotels, apartments, and various services and amenities already. Once hyped as the first hill city of India, this project remains deserted subsequent to years of financial and regulatory issues.

Series Of Controversies

Situated in the Western Ghats picturesque location, this township Lavasa city Pune, Maharashtra is different from other hill cities of India. As you drive up the smooth road in the middle of the monsoon greenery, there was a well-planned township insight. However, if you take a closer look, this city is deprived of the basic residential town constituents – the people. Apart from the people who have invested in this project, the effect of this ghost town can be felt in close by villages where the locals are still fighting for their land which was taken from them for this project. They did not have much hope for the assembly elections that took place in October 2019 since they feel that they are small in number to make politicians feel intimidated.

Since the project has been into controversies related to land acquisition and environment clearance over the last 10 to 15 years, it’s future is not very clear. With a very thin population, it has become a ghost town that has ready-to-move-into apartments that are empty, vacated by the residents or have unfinished construction. The villagers who were forced to give up their land for the construction of this city for various years have been opposing the approval of this project for tricking them and deceiving them. Just like people are missing in the Lavasa town, perhaps the requirements of these affected people are also nonexistent to the relevant authorities is something that the villagers point out. Designed to be built in 25000 acres in over 18 villages in Mulshi Taluka, Lavasa city near Pune is just 50 km away from the city. However, as the years passed by, this project confronted various legal cases or seizing the villagers land and violating the environmental setting. These difficulties led the project to run out of steam.

Decaying Town

Until a few years ago, motorcycle rally and vintage car rally events were held in this city. But, now the town is seeing a drop in the visitor count, especially on weekends, since people come here from nearby places for just a day picnic. The town has started to decay and it has all those signs written over it. There are unfinished and abandoned buildings across the place. You can just Google for Lavasa city images to see more. Fortune Hotel that operated in this town was closed recently. Besides a handful of guards to watch over this property, there is no other human presence. The same is the fate of numerous buildings that were once occupied. You find overgrown grass, empty boats and unkempt roads. Construction material has been left unguarded and unattended at the majority of the buildings that are under construction.

Launched during this decade’s early part, this project has been blemished with numerous controversies since the very beginning. There were arguments over the way this project was approved lands and other consents by the Maharashtra government. Other such controversies include the way the project was offered a special planning authority [SPA] status and permitted to build a barrage for the city’s water supply. Authorization to cut down hills for road construction and commercial and residential property construction also became a huge issue. In 2010, Jairam Ramesh, then Union environment minister levied a suspension on the construction activity which was then lifted in the year 2012. Several PILs were put in the High Court of Bombay over suspected environmental violations and land acquisitions from tribal people.

However, some people tried to find a way out and save the life savings that they had invested in this project. In June and July, several people who had spent their money in property in this town sent petitions to the PMO [Prime Minister’s Office] for help. Some even started online petitions to recover the project.

Lavasa Committee

The Lavasa committee report pdf suggested that the government should accept its recommendations to offer a minimum pension scale of pensioners and lower class employees to Rs. 21000. This committee was formed during the wake the seventh pay commission implementation by the central government to remove pay anomalies in the lower class cadre pay structure of both the central and the state government.

Unsettled Debt

Regrettably, the company is neck-deep in issues with unsettled debt of Rs. 5,559 crore and to creditors Rs. 400 crore to the buyers.HCC has said that this project was impacted severely by the notification of the environment ministry to halt work for jurisdiction issues. The NCLT [National Company Law Tribunal] acknowledged the construction company’s plea on August 30 to begin actions under insolvency and Bankruptcy Code [IBC]. The interim resolution professional appointed for this case was Devendra Prasad, but no buyer came forward till June 2019.

Lavasa is a joint venture between Avantha Group, HCC, Vithal Maniar and Venkatesh wara Hatcheries. According to a statement from Arjun Dhawan, the director and CEO of HCC, a quick resolution via the IBC will benefit the stakeholders, particularly the customers who have supported Lavasa patiently through this entire turbulent period. He also said that Lavasa is a unique urban development project and is a futuristic initiative. Though the shareholders' security has been forfeited, the company still hopes that the efforts to develop Lavasa city will be taken good care by the new owner of the project. 

Interesting enough, Deshpande possessed a stake in this project in its early phase around the year 2002 besides Sadanand Sule, the husband of NCP MP Supriya Sule. They both exited this project in 2007.