Air India has decided to scrap the controversial deal between Shahid Balwa's hotel chain and Hotel Corporation of India (HCI) to have management rights over Centaur Hotel, located on the banks of Dal Lake in Srinagar.
The deal had come under the scanner after Balwa, whose firm had signed a deal with HCI for running the management of the hotel, was arrested by the CBI in connection with his alleged involvement in the 2G spectrum scam.
Moreover, Balwa's alleged links with global terrorist Dawood Ibrahim had also raised eyebrows keeping in view the strategic location of the hotel which also houses the Sher-e- Kashmir International Convention Centre where all VIPs including Prime Ministers hold meetings during their visits.
Balwa is at present in judicial custody and has been named by the CBI as an accused in the first chargesheet in the 2G case filed by the investigating agency.
"The day this issue was brought to my notice, I asked the Air India chairman to cancel it. Now I have been told that the Air India board has decided to cancel the deal completely and also inform the Jammu and Kashmir High Court," Civil Aviation Minister Vayalar Ravi told PTI.
The state government is meeting next week to stake its claim for taking over the management of the hotel and submit a proposal on behalf of Jammu and Kashmir Tourism Development Corporation to the HCI, official sources in the state government said.
BD and P Hotels (India), a subsidiary of Balwa’s DB Realty group, had bagged 30-year management rights to the Centaur Hotel last September. The state government had protested to then Civil Aviation Minister Praful Patel and urged him to stop the deal.
Jammu and Kashmir High Court stayed the deal in February after a group of lawyers filed a public interest litigation.
General Secretary of the Centaur Employees Union Ghulam Mohiuddin Mehdi said that a team of the CBI had visited the hotel in February and March and taken statements of the employees and union members, who were opposing the deal.
The 252-room hotel built over 13 acres in 1982 was leased by the state government to the HCI.
The Balwa's hotel chain had said it would protect the pay of the Centaur employees only for a year prompting them to approach the Jammu and Kashmir High Court.
