A silent sell out


A deal giving Centaur hotel to a private company for 30 years was struck when Kashmir was under curfew as a seemingly helpless state government watched on. A Kashmir Life report.

Centaur Lake View hotel.Another major property in Kashmir is up for grabs. Last time it was the erstwhile Oberoi Hotel that was literally sold for a song. This time it is the prized Centaur Lakeview Hotel (CLH) that its owners Hotel Corporation of India (HCI) have already given to BD&P Hotels, a Mumbai firm on ‘management contract’ for thirty years.

Nobody in the state seems concerned. Finally, the employees of the CLH have decided to throw spanners. Taking umbrage to a clause of the deal under which their new masters will decide their fate after evaluating them for a year, the employees have challenged it in the high court. They have been desperate to get help, at least from the state government but failed. Just a letter from a middle rung officer has gone resenting the deal.

The deal, CLH insiders said, was signed on September 15 at the peak of Kashmir unrest and was registered in Mumbai court. BD&P Hotels, as per the agreement, is supposed to pay two crore rupees a year to the HCI that owns the five star loss making hotel. It has in fact already paid Rs 12 crore in advance on the day the deal was signed, insiders said.

J&K government officials say the government must reclaim CLH as it is a JV with HCI on equal partnership basis and the fate of prized property cannot be decided arbitrarily. In fact, insiders in the government said the issue was discussed in a meeting of the tourism ministry following which a communication was sent to the union civil aviation ministry objecting to the idea of sub-letting the property. Then the issue was examined by the law ministry that opined the HCI cannot take a decision arbitrarily.

 Set up in 1982, state government invested Rs 8 crore against HCI’s around Rs 21 crore. Besides, state leased the prized 221 kanals land to HCI on nominal rent of Rs 440 a year and a license fee of Rs one only for a period of 99 years. “Under the deal we were supposed to set up the convention complex and the HCI was to construct hotel,” one senior officer said. “We do have internal arrangements. SKICC is paying two million rupees a year to the CLH for supplying power and water.”

The 269-room five-star hotel took off very well. It made good money initially but suffered severely with the onset of militancy. Insiders suggest it has around Rs 28 crore of accumulated losses. During militancy, when tourism suffered, the only source of sustenance was the Accountant General Office employees and CRPF who were housed at highly subsidized tariff. A few years back when tourism started picking up, efforts were made to revive the hotel but it could not take off. Over the years it sent a number of its employee’s back home taking VRS route. Officials aware of the bickering in the HCI suggest that it lacks the capacity of any turnaround in the hotel. “Its water quality is unfit for use and now its roof is leaking,” one senior officer said, adding, “It is the worst case of mismanagement.”

What surprises people here is the time the HCI chose to sign the deal. “We were under curfew when the new party sent us the new contracts. We had no options and somehow we managed to send a team to Jammu to challenge the part of the deal that affects us,” an office bearer of the employees union said. “This part (of the deal) that envisages treating us (employees) as fresh appointees and reviewing their performance after a year was stayed by the High Court.” He said the employees who have served the CLH for 26 years cannot be treated fresh recruits. “It seems it is a ploy to issue pink slips to us all,” one of the employees said.

Employee leaders said they also approached the state government. “We met almost everybody. They all heard us but made no assurances,” said a leader. “But a letter has gone to the HCI from the state government conveying the reservations to the deal.” It is, however, too early to say if the state government would become party to the emerging crisis that can have spill-over on the roads because it involves the transfer of land to a party that is not a state subject.

The only glimmer of hope came from Congress state president Prof Saif-ud-Din Soz. After employees met him, he had a sitting with the Praful Patel, Civil Aviation minister under whom HCI falls. “I told him to give up the idea of transferring the CLH Srinagar to a private company as that proposal is neither acceptable to the employees nor to the general public,” Soz said, adding, “I told him it is a profitable proposition for Air India to continue the management of hotel.” It remains to be seen if HCI can go back on a deal that it has signed and even taken a hefty sum.

HCI has already sold out its three hotels in Bombay and the one in Rajgheer. Though it was intending to sell its Srinagar property and was in talks with the state government but there was no breakthrough. Insiders said the HCI was keen to take Rs 139 crores for the property if the state government would take it over. It finally opted for a management contract with the Mumbai based firm. The firm, insiders said, has completed all the formalities and was supposed to take over by November 15 but is yet to take the possession.

 As the details of the deal have started coming out and becoming the fodder of the public discourse in Kashmir, it has the potential of becoming a larger issue. Trade leaders have already started reacting adversely to the deal and it is being taken as a conspiracy to devour Kashmir of a prized possession. People have started making comparisons of CLH with erstwhile Oberoi Hotel which was one of the shady deals during the last NC government. In a bid to prevent a repeat of that, there are dozens of private parties in Srinagar keen to purchase it.

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A journalist with seven years of working experience in Kashmir.

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