The Bharatiya Janata Party (BJP) – government has embarked on a strategic disinvestment plan to offload the liabilities of perennially loss-making hotels owned by India Tourism Development Corporation (ITDC) and save them from eventual shutdown.
The tourism ministry is in the process of moving a Cabinet note soon on strategic disinvestment of ITDC hotels. The three-way plan being proposed is: complete outsourcing through Operation and Maintenance contract; long-term lease; and complete disinvestment.
A list of eight loss-making hotels that the government feels are beyond any chance of revival has been prepared, sources in the ministry said. The list does not include Delhi’s iconic five-star The Ashok, yet. For The Ashok, the ministry has decided to take up the task of reviving it within a year.
“The Prime Minister has said the government has no business to do business. Going by that mantra, we believe it makes little sense to let these hotels run in perpetual losses,” Union tourism minister Mahesh Sharma told The Indian Express. “For The Ashok in Delhi, we will embark on a revival plan.”
All these hotels have been posting huge losses for the past few years. The Kalinga Ashok in Bhubaneshwar, for instance, showed a loss of over Rs 3 crore; the figure for the Jaipur Ashok is similar. Hotel Jammu Ashok’s losses are to the tune of Rs 1.5 crore, same for Lilatha Mahal Palace hotel in Mysore. Two other properties in Ranchi and Puducherry posted losses of under a crore rupees each.
Of the 15 hotels in the state-run unit’s stable, these are the worst performers after Delhi’s The Ashok, which posted losses of around Rs 13.6 crore in 2013-14 — up from Rs 6.7 crore in 2011-12.
The workers’ union in the ITDC hotels has been staving off all moves from the Centre to offload the properties into private hands. “Instead of viewing them as liability, the government must consider why the hotels are running in losses. It’s because of years of neglect,” said a union member.
Among the hotels which are making profit are Samrat and Janpath hotels in Delhi, the Patliputra Ashok in Patna, Lake View Ashok in Bhopal, Bramhaputra Ashok in Guwahati and Hotel Donyi Polo Ashok, Itanagar.
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