The new government will not just get a Rs 4,000 crore bailout proposal for the National Aviation Corporation of India Ltd (Nacil) as a parting gift from the UPA, but also a free blackhole.

Nacil?s ignored subsidiary, the Hotel Corporation of India (HCI), whose four key properties?the Centaur Hotels at Srinagar and the capital and Chef Air units in Mumbai and Delhi?have been making losses persistently higher than their revenues for over a decade now!

The NDA had sold off HCI?s two Centaur Hotels in Mumbai. But given the UPA?s hapless approach to divestment, the saffron alliance may have missed a great opportunity in 2001, when it had received a bid worth Rs 71.3 crore for Centaur?s Delhi property and Chefair?s operations. Months later, it found no takers.

Eight years later, the only five-star hotel in the Delhi international airport vicinity has become a symbol of all that has gone wrong with Air India as well as HCI. Opened in November 1982 for the Asian Games, the hotel boasted of the world?s largest free-standing atrium at one time.

Now, with the airport development work engulfing the vicinity with dust clouds and eyesores, employees have little to boast of and aren?t even sure if the hotel would be standing for long.

Hotel staffers and experts agree on one thing: the government should either fix these assets in earnest or sell them off?keeping them barely alive isn?t helping.

?It was very easy to stop the disinvestment of the government?s stake in HCI, but the bigger issue is who looks after the properties that have not been sold,? said a senior official involved in the divestment of Centaur Hotels.

Even though all the rooms in the Delhi hotel have been recently refurbished, the entire hotel is likely to be demolished when Delhi?s airport developer begins work on a third runway. Senior hotel managers now wish they had a private owner as the government?s apathy has demoralized the 1600-odd staffers.

?The Centaur airport hotel in Mumbai has redefined itself and is thriving, post-disinvestment. In our case, even Nacil cabin crew doesn?t stay with us anymore. Foreigners passing through in transit complain of allergies, thanks to the dust. It would have been better if the hotel had been disinvested?no private owner would have let the airport developer encroach on its territory and devalue it in the process,? said a senior Centaur official.

The average occupancy rate for the hotel?s 300-odd rooms is just 50% and the hotel is facing a severe staff crunch since there?s a freeze on recruitment since 2000. The hotel?s shopping complex has been shut for years, while its health club and swimming pool is expected to open again after a few years? break. Parent company Nacil?s board members are as horrified as Centaur?s unsuspecting visitors.

?Why would anyone want to go there? It?s better to wait at the airport,? a board member told FE, when asked about the state of the hotel

Set up in July 1971, HCI was the erstwhile Air India?s attempt at entering the hospitality industry, akin to what its international peers were doing.

The five Centaur hotels?in Mumbai, Delhi, Rajgir and Srinagar, were to serve travelers flying on the Maharaja. But since 1997, HCI has been consistently making losses and now seems to be on the brink of bankruptcy.

In 2006-07, the last year for which an annual report is available, HCI incurred losses of Rs 12.70 crore, almost triple its losses in 2005-06. In 2007-08, officials claim the Centaur Lake View Hotel Srinagar made a profit of Rs 1 crore?for the first time since its inception in December 1983.

Set up in 1969-70, the Chefair flight kitchens in Mumbai and Delhi Airports made losses of Rs 1.84 crore and Rs 7.38 crore in 2006-07, respectively. Officials said that heavy overhead expenses have meant that Chefair lost most of its business to private players who charge lower rates.

Describing the mess that HCI is in, disinvestment secretary in the NDA regime Pradip Baijal noted in his recent book: ?The losses in Centaur Delhi and Chefair Delhi were higher than the sales turnover, meaning that the poor taxpayer was paying for the stay and the meal that you and I had at these hotels. It was obvious that some people were making huge profits out of these inefficiencies and were therefore, not keen to sell and were creating roadblocks at each stage.?

?Would any logical person owning these properties and incurring losses not sell them and prevent further losses?? Baijal asked.

In that context, the civil aviation ministry and Nacil seem to be bereft of all logic and have little concern or ideas for fixing the HCI mess. ?It has a separate board. It is a subsidiary company,? is all that Nacil executive director Jeetendra Bhargava told FE.

Ironically, as far back as 1997, the first disinvestment commission report had called for the Centaur Hotels in Delhi and Mumbai to be sold as separate units. It had also asked the Air India management to talk to the Jammu and Kashmir government in order to exit from the Centaur Srinagar Hotel.

With regard to Chefair, the G V Ramakrishna panel had said: ?Air India would have to decide whether the flight catering service should continue to be provided by HCI or whether it should be sold off as independent units??