TFCI, which invests in tourism-related projects, is evaluating the proposal and will give its opinion shortly. The funding pattern will be finalised after TFCI's report, said Kamat Hotels director KP Kannampilly. The company is also examining possibility to approach the capital market to raise funds.

This will be the second large project of the company in the city where it already operates a five-star ecotel (environmentally-sensitive hotel). Located near domestic airport, Orchid Hotel, was part-funded by Sicom and IDBI, said Kannampilly, adding that the company will approach these institutions for the new project also.

Kamat Hotels also operates Hotel Sidharth atNashik, Maharashtra for which it has signed a 35-year management contract with the promoters.

The company plans to promote the new hotel also as an ecotel, however, it has yet to obtain the category certification. "We hope to obtain the certification soon," said Kannampilly, adding that it should not be difficult for a company that already operates ecotel category hotel. The 245-room Orchid hotel has commissioned over 220 rooms and is operating at over 70 per cent occupancy.

The company is in process to acquire around 200,000 sq ft near Sahar airport for the new hotel. However, accommodation capacity of the hotel is yet to be worked out. The company has appointed architect firm Naren Kuadekar & Associates to design the hotel.

Apart from the proposed project in Mumbai, Kamat Hotels also plans to set up hotels in other cities. "There is an urgent need to enhance hotel accommodation in the country," said Kannampilly. In the metros specially the capacity addition is long due, he said.

Hotel accommodationis also required to boost tourism in the country, he said. In most of the countries, which earn sufficient revenue from tourism, the government promotes new hotels as soon as an average hotel occupancy reaches around 65 per cent.