After much delay, the Uttar Pradesh tourism department is taking steps to de-merge seven properties, most of them non-functional, for eventual privatisation.
Since these properties are owned by UP Tourism Development Corporation, the de-merger would transfer them directly to the state government.
Later, a special purpose vehicle (SPV) would be formed to transfer them to the bidding private party.
“We have already applied for the de-merger of seven properties in the first phase and the process may take some time,” UP Tourism Secretary and Corporation Managing Director Avnish Awasthi told Business Standard.
The government wants to offload 76 per cent equity in these units and retaining the rest with itself.
These are located in Lucknow, Ayodhya, Varanasi and Mathura. Barring Lucknow and Varanasi, which make profit, the rest of the units, including four in Mathura, are non-functional.
However, the employees are unwilling to be transferred to the private entities fearing loss of jobs and government perquisites.
“The employees will have several options and their services would be protected. We are talking with them,” Awasthi added.
The tourism department wants to privatise about 70-odd hotels and guest houses all over the state.
Most of these units (over 30) are either closed or loss making (20 odd). Others are earning only marginal profits. In the first phase, the corporation has taken up seven units.
Earlier, the government had undertaken the valuation process for these 70 properties amid protests by employees.
Uttar Pradesh wanted to benefit from the 2010 Commonwealth Games in New Delhi and was frantically searching for buyers with good offers, since the loss-making and closed units were getting devalued every day.
