The government has signed deals for the sale and lease of three Indian Tourism Development Corporation (ITDC) properties of the six cleared for privatisation in the first tranche. Deals for the Ashok Hotels at Bangalore, Hassan and Bodh Gaya were signed yesterday.
The lease for running Ashok Bangalore for 30 years was yesterday given to the Lalit Suri-promoted Bharat Hotels. While the Bodh Gaya property has been sold to the Lajpat Rai-owned Lotus Nikko Hotels, the Hassan property has been bagged by Malnad Hotels and Resorts.
Deals for the remaining three ITDC properties, those in Agra, Madurai and Mamallapuram, have been held up on account of stay orders granted by various state High Courts.
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The Bangalore property deal was cleared after a much drama when the tourism ministry directed ITDC chairman and managing director (CMD) Ashwini Lohani to go ahead with and sign the deal, late last evening. Lohani had written a letter to the tourism ministry stating that there were discrepancies in the divestment of the Bangalore airport restaurant along with the hotel.
Among the issues he raised were the fact that the expression of interest (EOI) invited for the eight properties did not mention the airport restaurant, ITDC board approval was not taken and that the scheme of arrangement of demerger of Hotel Ashok, which was filed with the Department of Company Affairs, did not mention the restaurant business.
The restaurant is an independent unit of ITDC and has never been a part of the hotel. The accounts of this restaurant are reflected in a separate balance sheet as are the accounts of the airport restaurant in Delhi. Moreover, this restaurant is not a physical asset of the company unlike hotel properties and is being run on a contractual basis, Lohani had pointed out.
The tourism ministry forwarded the letter to the ministry of disinvestment (MoD) which then pointed out that the EOI is a very broad document which does not give all details of the proposed deal. The restaurant business was, however, mentioned in the information memorandum given to bidders and was also included when working out the reserve price, the MoD has stated.
They also pointed out that the contract for running the restaurant was given to ITDC by AAI, on the condition that they make the security deposit of Rs 51 lakh, clear pending dues of Rs 20 lakh, in addition to paying an annual rent of around Rs 1 crore.
In a meeting held by the disinvestment minister to clear pending issues before the sale, ITDC had expressed its inability to make the security deposit and stated that the bidder for Ashok Bangalore would have to make the deposit. Since ITDC was unable to clear the dues and also, since the hotel was making losses of around Rs 2 crore, we decided to club the two together, disinvestment ministry officials said.
Another grouse they have against the ITDC CMD is that if he had any doubts about any aspect of the deal, the issue could have been raised earlier. The tourism ministry, which received a point-by-point rebuttal of Lohani's letter, subsequently asked him to go ahead and sign the deal, say sources. Lohani has, however, not been given a detailed explanation.