Great Eastern Hotel sale move begins anew

West Bengal government has kickstarted the disinvestment process for Great Eastern Hotel afresh. The state has sought expression of interest (EoI) for appointment of advisor for the sell-off process.

State industry minister Nirupam Sen said the target was to complete the entire process within March 31, 2004.

"We have included this sell-off with the pilot project which the government already started with 16 loss-making enterprises," he said.

Merits mention, the government has in the past tried to disinvest but in vain. This time around the state has approached the process in a more business like manner.

Even though the hotel comes under department of tourism, the disinvestment will now be carried out by department of public enterprise, headed by Sen.

He informed the department of international development (DFID) of UK, which is providing financial assistance for the implementation of the pilot project, has given a no-objection to Great Eastern Development.

"As long as we can restrict the expenditure within the stipulated amount, it (DFID) has no problem," Sen said.

The hotel has over 500 employees on its roll. To make the operation viable in the future, government may have to allow restructuring of manpower.

DFID is providing around Rs 215 crore as the complete package for restructuring state PSEs and Great Eastern selloff will be included in that.

Great Eastern, located in the central business district of Kolkata, was set up in 1940.

It was nationalised in 1980 after being taken over by the state government. The operation of the hotel, which has received heritage status, was in loss and desperately needed modernisation. Given the state of the government exchequer, it needed a private company to take it over.

The disinvestment proved futile in the past owing to its baggage of the past which the government could not untangle.

For instance, the manpower restructuring was vehemently confronted by trade unions. Moreover, it has number of tenants making the issue further complicated.

Sen said the decision to appoint an advisor has been taken to address the issues. "We do not have the necessary expertise to carry out such a complicated process. Moreover, such strategic sale should be done transparently," he noted.

Observers, however, said the sale will spill over to next fiscal given the task ahead. Sen admitted the March 31 deadline looked bit stretched but said the government will do its part to hasten the selloff.