State keen to jumpstart Great Eastern Hotel sale

State industry minister Nirupam Sen told Business Standard that the government was keen to kickstart the disinvestment process and complete it within the stipulated timeframe kept for the first phase.

"Sixteen companies have been taken up for restructuring now. Ten of them will be handed over or would converted to joint ventures. We intend to privatise Great Eastern Hotel along with them," Sen said. An advisor would be appointed soon for carrying out the valuation of the hotel.

"Since this is a service sector enterprise, we have to adopt a different approach. All other companies included in the first list are in manufacturing sector," the minister pointed out. Consultancy firm PricewaterhouseCoopers (PwC) was acting as advisor for sale of 10 loss making companies.

The sale of the 10 companies have made progress. Following a public advertisement for sale, several bids have been received. Earlier this week, the government extended the last day for submission of bids.

Sen said the government was confident about disinvestment of Great Eastern this time around. In the past, the Left Front government had failed to sell the hotel despite negotiations with buyers. However, the process then had been non-transparent, with the buyer being selected by the concerned minister without proper process of selection.

One such negotiated deal with the multinational Accor Pacific chain fell through in early nineties. The government then went in for competitive bids and several domestic players had responded. But the property could not be transferred as militant trade unions blocked visits and led to collapse of talks.

The state government has sought a Rs 150 crore grant from Department for International Development (DFID) of UK for rehabilitation of retrenched public sector workers. This was expected to win over Great Eastern employees as they would come into the safety net supported by DFID.

Sen said the state had extended the timeframe for submitting expression of interest (EoI) for the 10 companies advertised for sale by almost a month to accommodate more players in what GoWB called 'joint venture transformation with the induction of strategic partner'.

Sen added, "Many companies have requested us for more time. We want as many bidders as possible since it will give the government additional bargaining power and a better price." The government was interested in minimising loss of jobs but would go by the advice of investors and PwC.

"It is not important how much (money) we rake in, industrialisation is our priority," he said. The entire sale process is expected to be over by this fiscal.