Himachal Tourism disinvestment unstuck after Hotel Wildflower Hall dispute

Shimla: Decade old disinvestment plans in tourism have gone cold after the botched up disinvestment of Hotel Wildflower Hall, once a prime property of the public sector Himachal Tourism Corp, from which the state has not even got a penny in return for equity after it was handed over to the private sector in 1995.

From a list of properties marked for disinvestment in 1999-2000, the government last month managed to sell 3 small cafe’s and one loss making hotel from among the 60 restaurants and 56 hotels that it operates in the state.

Subhasish Panda, managing director Himachal Tourism said that Hotel Deothsidh in Bilaspur and 3 cafe’s elsewhere had been sold off recently disinvested.

He added that the Tourism Corporation set up in 1972 also carried the mandate about being socially responsible to bring tourists to places where infrastructure was not developed. “All properties could be gauged through a profit and loss prism”, he said.

Finances of the public sector undertaking as on 31st March 2009 show that on a paid up capital of Rs 12.30 crore its total debt liability on working capital was Rs 24 crore.

Highly placed government sources disclosed that plans to disinvest some of the loss hotels have failed to take off because of the messy affair of trying to realize some value for having divested the forested heritage property of Wild flower Hall, a decade and a half ago.

Acknowledging an account dispute over equity in the five star hotel, rebuilt by the Oberoi group under a 1995 joint venture agreement, Manisha Nanda, principal secretary tourism said, “an arbitration award in 2005 had resolved that the agreement be changed into a lease deed one for which the state should get a lease amount of Rs 92.75 crore over a 40 year period.

The arbitration award was challenged by Oberoi’s and is in court. For a disinvestment carried out in 1995, the state has got nothing till date for the 35 percent equity value under the then joint venture agreement.

Even as the state tries to woo others for setting up more 5 star hotels to boost high end tourism, but when it comes to divesting loss making Himachal tourism hotels for the purpose, the government develops cold feet.

Not wanting to be quoted, a senior IAS officer said, “With many bureaucrats, including some former chief secretaries, being blamed for the botched up disinvestment in Hotel Wildflower Hall, none is willing to stick his neck out for disinvesting other hotels and realize full value of their prime locations.”

The dispute notwithstanding, Hotel Wildflower Hall happens to be the state’s premier hotel, which is frequented by congress president Sonia Gandhi, her daughter Priyanka Vadra, ambassadors, and many others.

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