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Monday Musings: Lavasa, from dream city to ghost town... now what?
A Mumbai-based firm Darwin Platform Infrastructure Limited (DPIL) won the bid for Lavasa hill city, offering hopes that there will be an improvement of the essential services like roads, street lights and water have brightened up for the residents who had been at the receiving end of infrastructure bottlenecks for the past one decade
Lavasa, some 60 kilometres from Pune, was once touted as a hilltop paradise, modelled on the cotton-candy harbour of Italy’s Portofino. It would be India’s first privately built and managed city. Curious tourists and locals looking for a break from city life often flocked to the streets of Dasve village, where the hill city has come up. In the process, many restaurants and coffee shops came up on the promenade facing the lake situated in the middle of the city.
Through its journey, it faced flak for many wrong reasons. The result: it resembled a ghost town with incomplete structures, sporadic garbage collection and non-existing maintenance. Slowly, the number of visitors dropped and the roads started looking deserted.
Last month, there was some positive news. A Mumbai-based firm Darwin Platform Infrastructure Limited (DPIL) won the bid for Lavasa hill city, offering hopes that there will be an improvement of the essential services like roads, street lights and water have brightened up for the residents who had been at the receiving end of infrastructural bottlenecks for the past one decade. At the same time, small investors who purchased properties, which couldn’t be built, have expressed hope for completing the project. These are hundreds of people who have put down their life savings or borrowed money to buy property here, only to fear it may never get built.
More than two decades ago, then-billionaire Ajit Gulabchand envisioned something different after Sharad Pawar floated the idea of developing Lavasa hill city while travelling in a helicopter. Later, at a programme in Pune during 2014, Pawar even said Maharashtra has 26 sites with waterbodies that can be developed as hill cities, on the lines of Lavasa.
Gulabchand and his Hindustan Construction Company (HCC), known for building roads, power plants, tunnels and more than 300 bridges around the country, made attempts for the retreat through a possible IPO during 2010 when the national environment and forests ministry halted construction for about a year, alleging rule violations. Its cash flow quickly dried up. Efforts to tap equity markets fell through with investors nervous of further government intervention.
About a year later, construction resumed after approvals came through to build on 21 square kilometres—almost the size of Macau. But by that point the project was cursed
The hill township project Lavasa construction and development were started as per Maharashtra’s government policy and regulations for new hill stations as India’s first privately built smart city. Lavasa corporation was accused of defaulting on bank loans. The company on its website admitted claims of Rs5,561 crores from financial creditors.
After almost a decade there is hope. The DPIL has won the ₹1864 crore bid to acquire Lavasa Corporation through the insolvency process which was approved by the debt-ridden firm’s lenders. The resolution plan submitted by Darwin Platform bagged 97 per cent votes of the Committee of Creditors (CoC). At least 66 per cent of votes are required for bid approval. After CoC approval, the bid has to be cleared by the National Company Law Tribunal (NCLT).
The DPIL taking over Lavasa is also good news for local villagers, who had lost employment in the process. Initially wary of the large size project, the villagers were unsupportive, and at times, confrontational. As the project began acquiring shape, many found employment, something Dasve village had never thought of.
Yogesh Joshi can be reached at yogesh.joshi@htlive.com
