Is hill cutting for govt projects not illegal?

Hill cutting work has started in full swing behind residential houses at Marcel, in violation of existing environmental laws.

This photo shows the on-going work. When questioned as to why the hill cutting work is on, the reply received was that the mud was required for an upcoming bridge at Khandola Marcel which is a government project and nothing can be done about it.
 But isn’t hill cutting banned/illegal especially in residential areas? 
Can the contractors doing government work violate the environmental regulations to suit their purpose and will they charge the government after indulging in illegalities? 
Also, trucks have been lined up on the main road causing obstruction to traffic. 
Will the concerned authorities stop this hill cutting work and will traffic police restore order at Marcela?

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