Why Lavasa City Failed?

Hi friend. At the time I first heard about this project, it was estimated to be a grand one. With the amenities and everything, the real-estate sector was keenly looking for it to wrap up. However, the Lavasa City failure came out as a surprise for many people who had a growing interest in it. The Hindustan Construction Firm or the HCC was building this project. They went completely wrong on multiple occasions on the legal front which led to a demise of this once called dream city. Let me share more on this.

Why Lavasa project failed?

1. The main concern for the Lavasa City began when Jairam Ramesh, the environment minister during that time declared the project illegal for not keeping up with the environment protocols. According to the government, the HCC failed to gain the mandatory environmental clearances. 

2. Moreover, the project was under the radar of acquiring land from the local tribals at prices way lower than the actual market price.

3. In the year 2012, when the Comptroller & Auditor General (CAG) found out that a clean chit was given without environmental and cabinet approvals, they slammed the Maharashtra government for "total lack of transparency" with regards to the selection of the Lavasa City project.

4. Another major problem arose in the form of defaulted dues that were required to be paid to the bondholders.

These are some of the major contributors in the downfall of this project, Arpita has specified a few more determining factors in her answer. You should refer to it as well.

I hope this answer helps you with the reason behind Lvasa failed city.

I had heard a lot about Lavasa Hill city and always wanted to visit the place. However since the onset of Covid-19, every wish got hindered and so did this one. I did not know much about it but was asking my father to visit the place but he was not very interested. He said it is a failed city so it’s better to visit some other place instead of it. I asked him why Lavsa failed and he said that is chiefly because the project was violating the environmental laws. I had to know more about this so I started collecting every detail about it from the net which I can share with you as well so that you too get to know more things about the place.

Apart from going against the environmental laws, it also had defaulted on dues that needed to be paid to the bondholders and the delay in payment to the creditors including banks were a massive blow for the project for which the project overall failed to take place. 

The worst part is that the Lavasa authority started building construction as soon as they got the land and has about 6 stories buildings too. However as per rules only 3 stories construction is allowed in hill projects and the violation of the rule is said to be the main cause for the failure of this project.

After knowing why did Lavasa fail, also know that the Committee of Creditors of Lavasa Corporation voted and accepted a Rs 1,814 crore final Total Resolution Plan to bring back the city. Let’s see if it happens in the future or not.

The Lavasa city got planned by HCC, that is Hindustan Construction Company

I hope now you understand why Lavasa failed and its causes.

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