Shamuka tourism project: Odisha plans infra to boost investor interest

Back in 2008, when the Odisha government invited bids from hoteliers for its ambitious Shamuka tourism project, it found only three bidders in the final round. The lacklustre turnout in the final bids was a setback as during the pre-bidding stage, all the leading hoteliers  - Taj Group of Hotels and Resorts, ITC, Park Hotels, Ananda Spa, Emaar MGF with Hyatt, DLF with Hilton, Unitech with Starhood and Zoom Developers with Kamat hotels - had shown interest in the prized project. 

Despite the appeal of the project site, investor interest fizzled out as the site chosen lacked the basic infrastructure. The project is envisaged to be developed at Sipasarubali, 10 km south of Puri. Although conceived in the early 90s, the project has been stuck, crippled both by lack of effective implementation and litigation.  

Realising the infrastructure handicap, the state tourism department is now focusing on its development. “It was imprudent to go for bidding without creating basic infrastructure at the site. Any developer likes to see value in the project before committing investments. We are keen to develop road network inside the plot and create some critical infrastructure before going for fresh bidding”, a senior government official said.

“Shamuka beach is an option to ease overcrowding in Puri. We are awaiting the decision of the state government for allotting land for more world class hotels and resorts to come up in the state since a very long time. We hope the Shamuka project  is cleared soon by the state government so that world class hotels can come up”, J K Mohanty, Chairman Hotel & Restaurant Association of Odisha  said at  the third edition of the Odisha Tourism Conclave.

The tourism project envisages four plush five star hotels, a convention centre of international standards with a seating capacity of nearly 1,500, boutique hotels, international spa and wellness centres, an entertainment zone and sports facilities.  

The project with a potential to attract Rs 35- 40 billion investments, has hardly shown signs of taking off the ground. It has been delayed by litigation, undermining the government's implementation efforts. There was a row over land alienated for the project which was finally overcome with a favourable ruling from the Orissa High Court in 2011. The court restored the land in government records, clearing the decks for construction work to begin. The government had acquired nearly 1000 acres of land at Sipasarubali and initiated measures to build external infrastructure.

The showpiece tourism project received a setback in April 2016 when the eastern bench of the National Green  Tribunal (NGT) restrained the Odisha government from undertaking any activity until the grant of an environment clearance and a Coastal Regulatory Zone (CRZ) nod. 

The State Pollution Control Board has approved the project and the Odisha Coastal Zone Management Authority has recommended the proposal to the Centre. However, approval is still pending with the Union ministry of environment, forest & climate change. Green activists have been opposing the project, alleging that its implementation would contravene CRZ norms.

The mega tourism project has been developed on the public-private partnership (PPP) mode. The state government had lined up an investment of around Rs 1.5 billion on external infrastructure like water supply, electricity and roads for the project.