Thursday, December 2, 2010

Jindal Steel, Lavasa Corp Get Show Cause Notices

. Thursday, December 2, 2010

By stockOzone team

Jindal Steel & Power Ltd and Lavasa Corporation, a unit of Hindustan Construction Company Ltd, have been asked by the government to explain why clearances granted to their projects shouldn’t be cancelled for alleged violation of environmental norms.

The environment ministry has issued the so-called show-cause notice for violations at Jindal Steel’s 6 million tonnes per annum (mtpa) steel plant in Orissa while Lavasa has been asked to clarify why unauthorised structures were erected without environmental clearances at its Lake City township near Pune, the ministry said in the letters that were posted on its website on Friday.

Jairam Ramesh, the 56-year-old environment minister, has increased scrutiny on major industrial projects, halting investments worth billions of dollars including that of Posco’s $12 billion (Rs 54,840 crore) steel plant in Orissa and Vedanta Resources Plc’s mining project in the same state for violating environmental regulations.

In the letter dated November 22, Jindal Steel has been asked to explain why its started construction of roads and foundations for the power plant when the ministry had given a prior clearance on the condition that the company gets an environmental approval for using forest land before starting construction. Shares of Jindal Steel fell 1.7 per cent at the close of trading on Friday on the National Stock Exchange.

The Ministry of Environment and Forests has questioned Lavasa for building unauthorised structures without environmental clearance between March 2004 and September 2006. Shares of Hindustan Construction, which owns about 65 per cent of Lavasa, lost 19 per cent.

The government has given Jindal Power and Lavasa 15 days to respond to the charges. Lavasa said it will respond to the letter issued by the ministry after it receives the notice. Earlier this month the Forest Advisory Committee of the ministry recommended temporary withdrawal of forest clearance to South Korean steel major Posco’s project for violation of the Forest Rights Act.

The ministry has constituted three committees to look at the alleged forest, environment and coastal regulation zone violations committed by the company. An earlier panel headed by the former Environment Secretary Meena Gupta had suggested, by a majority vote, to scrap the environmental clearances accorded to Posco’s Orissa plant.

Gupta was the only member in the four-member panel to recommend an environment clearance. Posco had signed an agreement with the Orissa government in 2005 to set up a 12 mtpa steel plant in Paradip, the biggest investment plan by an overseas company in the country till date.

Posco’s proposed steel plant requires around 4,000 acres, out of which 2,900 acres is forested and requires special forest clearance. Posco also has proposed building a captive port, which would need coastal clearances.

The ministry has also scrapped plans by Vedanta to mine bauxite at the Niyamgiri hills in Orissa as part of the company’s expansion of its $9.5 billion alumina refinery project. Environmental activists have asked Avataar director James Cameron to cancel a trip to the Lavasa township for a series of lectures, sponsored by Hindustan Construction, for violating green norms.

Disclosure: Author does not own any of the stocks discussed here.

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Life Insurance Corporation (LIC) Chandigarh, India said...

LIC has declared that the present cashless form is not in support of the customer as many hospitals were not compliant with the facility. In many cases hospitals are over charging if a patient comes with an insurance cover that offers cashless treatment. Therefore LIC has set up its health department at Hyderabad, which will contain the centralized data.

GTA San Andreas said...

Government is keepong good check of companies.

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