The Uttar Pradesh government has a grand wish: To develop a ‘minimum 5-star hotel’ with at least 150 rooms, a 24-hour coffee shop, a specialty restaurant, a bar and a swimming pool on 2.5 hectare of prime land in the heart of Lucknow.
The reserve price for the plot on which the project is to come up has been set at a whopping Rs 112 crore, the highest ever for any single plot in the city. And as a sweetener for developing the project, the government has liberally reworked and tailor-made the building by-laws to suit the developer. It is giving a license to build a commercial complex along with the hotel, which can house shops, business centres, a shopping plaza, multiplex, service apartments and budget hotels that the developer can sell to break even. The Lucknow Development Authority (LDA) has also proposed a policy of allowing the floor area ratio (FAR) of 3+ 1 for hotel plots. The project, proposed to be developed on design, build-finance, maintain, operate and own (DBFO) basis would come up on a vacant land acquired by the LDA last year.
This is the first attempt of the UP government at ‘controlled development’. ?This deal is definitely going to create a record of sorts as it will be the biggest till date. We could have simply auctioned the plot to the highest bidder for building a hotel at this spot. But that would not have ensured that the hotel would be as per the specifications that the state government has in its mind. In order to exercise a sort of control on the end result, we have adopted this process for the first time. The commercial complex can be seen as the viability gap funding (VGF). Usually, for hotels, the break even comes after five years. But to hasten that, we have doled out a commercial complex which will ensure that the project turns viable in three years’ time,? said an LDA official, adding that the government needs private sector help for the development of the city’s infrastructure.
The response from the private sector has so far been equally enthusiastic. As many as eight builders have evinced interest at the pre-bid conference, including the Taj group of hotels, IL&FS, Madhukon, DSC, MI Builders, Purvanchal Developers, and two home-grown construction companies, Wave Group and SAS Group. The bids are expected to be submitted on October 7. While the technical bids would be opened on the same day, the financial bids are likely to be opened on October 14 after the due evaluation of the technical bids.
Talking about the need for the project, the RFQ/RFP bid document says that Lucknow is among the top ten growing non-metro cities in the country and is witnessing an ?economic boom?. ?The UP government has a very optimistic plan for developing the city?s infrastructure for its further economic growth and to take it to a higher level. In the last few years, the city has witnessed a growth in aerial traffic, the peak season occupancy in the 4-5 star hotels is over 85% and the city has proximity with several places of religious interests in the region. In view of all these, Lucknow is in need of enhanced world class accommodation facilities as well as commercial space to capitalise on the business potential of the state,? it says.
However, the fact that this property would become the hottest property in the city in the coming years is making the deal a much-hyped one. As also the fact that the state government?s interest in ensuring that the project gets off the ground. ?The LDA has always been in the job of auctioning plots. For this project too, the LDA could has just auctioned the land for the construction of a 5-star hotel to the highest bidder. But, what is surprising is the fact that the government is keen on ensuring that the project turns viable by the end of the third year itself. The raised FAR and the juxtaposition of the commercial complex along with the hotel project is proof enough. In a way, it is the government’s effort to ensure that chief minister Mayawati’s dream memorials of Dr Bhimrao Ambedkar turn into hot tourist destinations. That is the reason why the site for this hotel project has also been chosen in the vicinity of the string of Ambedkar Memorials in Gomti Nagar area,? said an official requesting anonymity.
?The hospitality sector in the city will get a big facelift. We have often heard reports that visiting delegates, who come to the city for conferences and other purposes, have faced the problem of quality boarding and lodging. We expect to resolve this problem in near future,? says LDA vice-chairman, Rajeev Aggarwal.