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Lavasa gets partial clearance
Lavasa (HCC’s subsidiary) has received clearance for the construction and development of
Phase 1 (700 out of total 5,000 hectares) by the Expert Appraisal Committee (EAC) of the
Union Environment Ministry.
EAC’s decision was based on the ground that substantial development has already been
done in 700 hectares; so, considering the investments made and infrastructure created,
EAC gave the clearance with certain conditions to minimise future damages. Conditions
are that Lavasa will have to guarantee that there will be no hill cutting, digging and
excavation and that no activity involving generation of soil, its use or
transportation/disposal will be carried out. However, the remaining project is still
surrounded by ambiguity, as Lavasa will need to rework the planning and development of
the entire project, including environment impact assessment (EIA), and submit a revised
proposal for environment clearance. HCC had challenged the directive of the ministry and
the final decision will be taken by the Bombay High Court on March 30, 2011, which is the
scheduled hearing date.
We believe this development is positive for the company, as it has reduced the uncertainty
regarding the progress already made and will allow restarting the work on Phase 1, which
had been stalled since November 2010. Further, HCC has been losing ~`2cr/day as per
the management, due to the work coming to a standstill. However, we believe the
complete project still remains under high level of uncertainty and HCC faces other
concerns, highlighted by us in the 3QFY2011 result update. Thus, we continue to maintain
our Neutral view on HCC.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Lavasa gets partial clearance
Lavasa (HCC’s subsidiary) has received clearance for the construction and development of
Phase 1 (700 out of total 5,000 hectares) by the Expert Appraisal Committee (EAC) of the
Union Environment Ministry.
EAC’s decision was based on the ground that substantial development has already been
done in 700 hectares; so, considering the investments made and infrastructure created,
EAC gave the clearance with certain conditions to minimise future damages. Conditions
are that Lavasa will have to guarantee that there will be no hill cutting, digging and
excavation and that no activity involving generation of soil, its use or
transportation/disposal will be carried out. However, the remaining project is still
surrounded by ambiguity, as Lavasa will need to rework the planning and development of
the entire project, including environment impact assessment (EIA), and submit a revised
proposal for environment clearance. HCC had challenged the directive of the ministry and
the final decision will be taken by the Bombay High Court on March 30, 2011, which is the
scheduled hearing date.
We believe this development is positive for the company, as it has reduced the uncertainty
regarding the progress already made and will allow restarting the work on Phase 1, which
had been stalled since November 2010. Further, HCC has been losing ~`2cr/day as per
the management, due to the work coming to a standstill. However, we believe the
complete project still remains under high level of uncertainty and HCC faces other
concerns, highlighted by us in the 3QFY2011 result update. Thus, we continue to maintain
our Neutral view on HCC.
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