‘Airport restaurant was part of Ashok Bangalore deal’

Ravi Kapoor

New Delhi, Dec 3: The restaurant at Bangalore airport that has been given to the buyers of Bangalore Ashok was part of the deal and it was done in concurrence with the top brass of India Tourism Development Corporation (ITDC).

Speaking to The Financial Express, officials of the ministry of disinvestment said that the controversy surrounding the handing over of the restaurant is part of the “conspiracy” to tar ITDC privatisation.
Efforts are on to rescind it, they added. But why wasn’t the restaurant mentioned in the advertisement seeking expression of interest (EoI) for Bangalore Ashok? According to ministry officials, this was because of two reasons. First, the restaurant is not a property of ITDC. It belongs to the Airport Authority of India (AAI). It has been given to ITDC on lease.

Second, in December 2000, when EoI was advertised, it was not technically leased out to ITDC. For, the lease had expired in March 1999, as ITDC had failed to clear its dues worth Rs 71.4 lakh.

The lease was renewed in March 2001. In the two years, however, it was still managed by the staff of Bangalore Ashok, as both ITDC and AAI are state-run companies. However, it was “an ad-hoc arrangement” and, therefore, ITDC was not the lessee, officials said. At any rate, they pointed out, it was through a negotiated deal that the restaurant was handed over to Lalit Suri-owned Bharat Hotels. When AAI renewed the lease in March this year, subject to payment of dues, the restaurant was mentioned in the information memoranda that were given to the bidders.

At the inter-ministerial group (IMG) meetings, everything was “firmed up,” ministry of disinvestment officials said. Among others, ITDC executives attended the IMG meetings. In other words, officials said, the restaurant was not handed over as a “gift” to the buyer. They also said that privatisation has helped AAI earn more from the restaurant, as the rent has gone up from Rs 10 lakh to Rs 1.1 crore. And this value gets reflected in the reserved annual rent of Rs 3.4 crore for Bangalore Ashok.

Last month the government handed over Bangalore Ashok to Bharat Hotels on a 30-year-long lease, with an upfront payment of Rs 39.8 crore and Rs 4.11 crore as annual rent. It may be recalled that ITDC chairman-cum-managing director Ashwani Lohani had alleged that the ITDC board’s approval was not sought for leasing out Bangalore Ashok.