All UP govt hotels put up for sell

Written by Deepa Jainani | Lucknow, Aug 28 | Updated: Aug 30 2008, 04:52am hrs
After failing to woo reputed consultancy firms or consortia as advisors for the disinvestment process of the 47 ailing units of the Uttar Pradesh Tourism Corporation, the state government has now decided to put up for disinvestments 30 profit-making units.

The disinvestments process will follow the public-private-partnership model. In a late night development on Wednesday, senior state government officials came to the conclusion that since it was unable to draw any bidders for advising the disinvestment process of the 38 closed and loss-making units, and 9 tourist complexes in the Buddhist circuit, the government should disinvest the assets and liabilities of all the 77 tourist guest houses and hotels of the Uttar Pradesh State Tourism Development Corporation (UPSTDC).

It also decided to change the request for qualification cum request for proposal (RFQ cum RFP) for the same and again extended the last date for submitting the bids till September 8. In addition, the government also invited bids from experienced lawyers to act as legal advisors to the directorate of tourism. The state government has already extended the date for submitting the bids three times.

According to sources close to the development, this proposal was the outcome of a high-level, closed-door meeting to find a way out of the peculiar predicament of not getting any takers for the disinvestment process. Since there were no takers for the 38 loss-making units as well as nine units in the Buddhist circuit, the government decided to add some incentive so as to make the prospect of buying these properties appear lucrative to the private sector. Hence, they have now clubbed the 30 profitable ventures of the UPSTDC along with the earlier 47 for disinvestment, he revealed.

The 30 viable units that have been put up for disinvestment include the highly profit-making Hotel Alaknanda in Haridwar, which made a profit of Rs 73 lakh in the 2007-08 fiscal, Hotel Gomti, in Lucknow, which registered a profit of Rs 45 lakh, Hotel Iravat, in Allahabad, which booked a profit of Rs 32 lakh, Hotel Taj Khema in Agra, which made a profit a profit of Rs 25 lakh and many others.

In an earlier move by the state government to disinvest 47 units, owned by the UPSTDC, has evoked sharp reaction from the employees of the corporation, who felt that their future was at stake. The 700-odd striking employees had forced the hotels to close, with the occupants leaving in search for alternative accommodation.

According to the UP Tourism Employees Union general secretary Azad Kumar Mishra, the process of disinvestment was an alibi to close down the Corporation as there appeared no rationale for disinvesting even profit-making units.

However, officials of the corporations denied all such charges and stated that the issue of disinvestment had been totally misunderstood by the employees. Talking to FE on condition of anonymity, an employee of Hotel Gomti, in Lucknow revealed that the reason behind having so many loss-making units was that several units had been set up at non-viable destinations due to pressure from the politicians.

When Mulayam Singh Yadav became chief minister, a hotel was built at Bewar, in his home district of Etawah. Similarly, when Ashok Yadav was tourism minister in Rajnath Singhs BJP government, he built a hotel in Shikohabad and another property was built by former CM Veer Bahadur Singh in his home district of Ramgarh Tal in Gorakhpur. Not only are these hotels built on non-viable destinations, which have no tourist inflow, they also do not have the logistics to support tourist footfall in the area, thus rendering them completely unviable, he said.