New Delhi: The Narendra Modi government has set in motion a plan to sell off The Ashok — an iconic hotel in the heart of the national capital — by floating a cabinet note to monetise its operations and management. A finance ministry official told ThePrint they are hopeful of cabinet approval by the end of the month.
The proposal is part of the government’s attempts to speed up clearances of assets that can be sold or given on lease to private entities under the asset monetisation plan, the official said.
Union Finance Minister Nirmala Sitharaman had last year unveiled a Rs 6-lakh-crore National Monetisation Pipeline (NMP), which included brownfield infrastructure assets — projects on which some work has already been done but are held up due to fund restraints or other reasons — that would be monetised through financial year 2024-25 without ownership control. The Ashok hotel was part of the NMP. No particular timeline was specified by the NMP for completion of these projects.
The Centre has set an ambitious target of Rs 88,000 crore from monetisation of government’s assets in 2021-22, in partnership with the private sector. It has so far managed to garner Rs 26,600 crore from this target in the current fiscal year, the finance ministry official added.
“The plan is that, hopefully, in this month, we will secure cabinet’s approval. After that, we will hold roadshows that will be followed by transaction structuring in the current financial year,” the finance ministry official said. However, he added that the entire sale process may not be completed by 2021-22.
According to the official, selling the hotel with a long lease, which could fetch the government around Rs 7,500 crore, will be discussed in a meeting chaired by Cabinet Secretary Rajiv Gauba this week, before the matter is finally considered by the Cabinet Committee on Economic Affairs for its approval.
Attempts have been made in the past to sell the Ashok hotel, but the plans had to be shelved due to labour issues, and the establishment’s past contracts. For example, Arun Shourie, as disinvestment minister under the Atal Bihari Vajpayee government, had tried to sell the hotel as part of a wider policy of exiting from the hotel business, but was unable to do so, reportedly due to a dearth of bidders.
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Owned by ITDC
The 25-acre Ashok hotel, located in the Diplomatic Enclave of New Delhi, falls in the neighbourhood of the official residence of the Prime Minister of India at Lok Kalyan Marg and the British High Commission.
Built in the 1950s, the five-star establishment once served as a premise for hosting eminent foreign dignitaries during their visits to India, as well as state officials on invitation of the government. The hotel is owned by the Indian Tourism Development Corporation (ITDC), in which the government has over 87 per cent stake.
The Union ministries of housing and urban affairs as well as tourism have been tasked with the sale of the hotel.
ITDC operates hotels, restaurants at various places for tourists, besides providing transport facilities. Its network consists of four Ashok Group of Hotels, four joint venture hotels, seven transport units that are part of the travel and tourism infrastructure, 14 duty-free shops at seaports, one sound and light show, and four catering outlets.
“All 8 hotel assets of ITDC have been considered for monetisation during the financial year 2022 to 2025. Long-term leasing, divestment, long term operate, manage and transfer (OMT) contract may be explored as potential models for monetisation to be ascertained on a case-to-case basis as per detailed asset-level due diligence,” read the NMP document.
(Edited by Gitanjali Das)
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Source: The Print