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The environment ministry has raised the red flag on two-high profile projects: Hindustan Construction Company's real estate dream, Lavasa, and Jindal Steel & Power's plant in eastern Orissa.
The ministry, which has already acquired a high profile for stalling several large projects and its minister - Jairam Ramesh - the label of âDr No' from critics, suspects violation of regulations by these two projects as well.
In letters to these companies, Lavasa has been asked to provide reasons why the government should not raze all construction after 2006 at its project near Pune. Launched in 2002, Lavasa is touted as "India's first hill city". Days ago, its proposal to float an initial public offering to raise funds was cleared by stock market regulator Securities & Exchange Board of India.
JSPL has to defend the environment clearance given to its Rs15,000-crore, 6-million-tonne-a-year integrated steel plant and 1,000-Mw captive power plant at Kerjang in Angul district of Orissa.
"We have the environment and forest clearances for the project and haven't violated any norm. We are yet to receive the ministry's showcause notice and will respond to that once we get it," stated JSPL. A Lavasa Corporation statement said the same thing: "We are still to receive the notice. As and when such a notice is received, we will respond."
According to the notices, Lavasa has until December 10 to file its response, JSPL until December 7. They risk cancellation of their projects if they cannot satisfy the ministry. The shares of both HCC and JSP fell on a weak market today.
The ministry has already scrapped plans by Vedanta to mine bauxite and to expand a $9.5-billion alumina refinery project in Orissa. Among other projects under its scanner is the $12-billion steel plant proposed in Orissa by South Korea's Posco, potentially the largest single foreign investment into India.
The notice to JSPL says the divisional forest officer of Angul issued a showcause notice to the company on July 6 last year regarding construction work for industrial activities on non-forest government land until clearance was obtained. This comes on the back of a petition by the Wildlife Society of Orissa (WSO) seeking cancellation of environmental clearance to JSPL.
On the basis of documents obtained under the Right to Information Act, WSO has stated that the Angul DFO, in a letter on October 6, 2009, had pointed out that JSPL had violated the Forest Conservation Act of 1980 by starting construction work without forest clearance.