MUMBAI, May 17: Thanks to the strong protest lodged against it, the fate of Sahara India's controversial 5,000 acre private hill-lake city project near Pune hangs in balance as the Sena-BJP government is rethinking on the letter of intent (LoI) granted to it on January 7, 1997.

``No final decision has been taken as the alliance government is awaiting the report from Ajit Warty, Principal Secretary (Revenue), who has been asked to submit a comprehensive report on the alleged irregularities,'' a senior official told The Indian Express.

The official also said, there were mainly three conditions in the letter of intent. Firstly, it will be the responsibility of the company to obtain necessary project clearance certificate from the Ministry of Environment, followed by clearance from the department of archives and thirdly suitable action on the objections raised by the Tata Electric Company, which had questioned the decision of the government to permit the project in the vicinity of its power generation centre.

``While the company may secure clearance from the Environment as well as Archives departments, it will be difficult for it to satisfy the Irrigation department on the objections taken by the Tata Electric Company,'' the official said.

By an official letter on June 8, 1995, to Chief Minister Manohar Joshi, Tata Electric Company chairman Homi Sethna had pointed out that his company was in the dark about the permission for construction of dam as well as two lakes to Sahara India. The TEC had pointed out that construction of dam should not be permitted as it will adversely affect power generation. ``Power generation will be reduced by at least 4.5 lakh units following the permission granted to the Sahara project,'' TEC had then pointed out. According to a senior BJP minister, in view of the serious allegations of corruption in the allotment of land to Sahara India, it will be appropriate for the government to withdraw the permission.

``A month has passed after Congress legislator R R Patil levelled charges of corruption in the allotment, but the alliance government is yet to come out with a convincing clarification,'' the minister pointed out. On the other hand, Patil, who had alleged that there was a Rs 100-crore deal in the allotment of land, today demanded that in larger interest of the State, the government should immediately withdraw the letter of intent granted to Sahara India.

``I am surprised over the fact that merely on the basis of the letter of intent, the company dared to start construction and developmental work on the forest land,'' Patil remarked.

Participating in the debate on the budgetary demands of the urban development department, Patil had expressed surprise over the speed with which the alliance government had cleared the project despite specific objections of the Tata Electric Company, the main aggrieved party. Secondly, Patil had demanded that the government should conduct a judicial probe under the Commission of Inquiry Act into his allegations.

Meanwhile, director general of information and public relations A V Deshpande today said that the agitation launched by veteran social worker Anna Hazare and government's decision to stop the construction work of Sahara has no links. ``The decision to take action against illegal and unauthorised works was taken by the government on May 13. This was evident from the fact that the Chief Minister had dealt with the subject during the budget session of the State Legislature,'' Deshpande said while reacting to a report in these columns under the title, `Hazare scare hits Sahara India project in Sahyadri'.

Joshi had even mentioned that Sahara India has been given only the letter of intent for a hill station project in accordance with the development control rules, Deshpande added.

In pursuance of his assurance to both the Houses of the State Legislature, the Government has appointed a committee headed by Principal Secretary (Revenue) to submit a report in respect of the works that are under way or being taken up under the Sahara project and submit to the Government whether the development is in accordance with the development control rules or whether there have been any irregularities committed by Sahara India. Pending submission of the report, the alliance government has asked Pune Collector to stop illegal and unauthorised work if it was being undertaken by Sahara.

Deshpande said the question of granting permission to Sahara India will be considered on merit after examining the report of the Principal Secretary.