The problem, apparently, is the large number of employees, which is likely to discourage potential bidders. Sources in SBI Caps, corporate advisor to ITDC, said that the real issue is overstaffing and unless this is resolved, nobody will bid either at or close to the government's unofficial price.

The corporation has an 8,000-strong work force. The global advisor will have to come up with a good redeployment or voluntary retirement scheme as it may face stiff opposition from the staff which might throw the disinvestment schedule out of gear.

Merchant bankers feel that the restructuring of the organisation and the issue of tackling the excess work force will take time and it is unlikely that ITDC will be able to complete the process this fiscal.

However, ITDC officials are confident that such issues will be offset by theobvious advantage offered by the company's properties in terms of good locations and, therefore, the immense potential it has for roping in traffic.

To counter the problem of excess staff, the government is considering an attractive VRS plan called `loans against VRS bonds'.

The company is also in the process of listing its shares on the Mumbai and Delhi stock exchanges. The listing will help set a benchmark price for effective divestment.

Sources in the tourism ministry disclosed that the governnment has accepted the recommendations of the Disinvestment Commission. Accordingly, ITDC has to be restructured first before 74 per cent of its equity is offloaded.

The commission had, as part of its suggestions, stated that the corporation should let out its metro properties on a management contract basis.

Second, the non-metro properties of the company should be corporatised, even up to 100 per cent. Shares of these companies will be issued to the government and other shareholders and disinvestment willbe through sale of 100 per cent government shareholding in them.

ITDC has 26 properties of which nine are classified as metro properties with eight in Delhi and one in Calcutta.

Apart from incorporating these recommendations, the prospective bidders will also have to encompass a gamut of other issues outlined by SBI Caps. These include the methodology to be followed for the valuation of properties.

There is also a possibility that the hotels situated in Delhi and Banglore may be handed over to the established hotel chains through a competitive bidding route on a long-term structured contract or lease-cum-management basis.

The contract could have an upfront fee and annual fee with an in-built indexation for annual revisions.