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Lukewarm response to ITDC property sell-off

Parul Gupta & Mamata Singh

In yet another lukewarm response to the disinvestment of public sector units, the government has received only two bids for the Madurai property, one bid each for the Mamallapuram and Bodhgaya properties and no bids for the Manali hotel of the India Tourism Development Corporation (ITDC).

There were around 91 interested parties who were shortlisted for these eight properties. While a local player has reportedly quoted Rs 70 million for the Mamallapuram property, a tour operator has submitted his bid for the Bodhgaya hotel.

“The response is not as good as we had expected,” Pradip Baijal, secretary, department of disinvestment, said. In case of the Manali hotel, the department will put it on the block once again in the third tranche of disinvestment of ITDC properties, he added.

The financial bids are being opened by DoD and the tourism department daily. The bank guarantees submitted by the H1 bidder are accepted, while those submitted by the other bidders are returned to them to be used for other hotels.

The valuation reports for all the eight properties will be opened on November 10 and compared with the bids.

Lazard India Ltd, the advisor to the ITDC divestment process, said the submitted bids will go to the evaluation committee which will study the explanation and methodology of each bidder. The Cabinet committee on disinvestment, which is scheduled to meet on November 13, will then announce the name of the successful bidders.

"It was an issue of logistics and since the Cabinet cannot meet for each property, the valuation reports for all the hotels would be opened together on November 10," LIL managing director Ashish Guha said.

The disinvestment process for the first eight ITDC properties is on and Tuesday was the fourth day.

A day has been earmarked for each of the eight properties. Bids have been invited for the Agra property on November 7 and for the Hassan property on November 8.

The financial bids for the prime properties of Bangalore and Delhi, which have been offered on a 30-year renewable lease, will be opened on November 9 and November 10 respectively.

Industry sources pointed out that several parties, which had shown interest initially, decided not to submit any bids at the last moment because of a lack of clarity in the title deeds of these properties. Some hotels do not even have a site plan, they pointed out.

Meanwhile, bids have also started coming in for Hotel Corporation of India. The CCD will meet on November 10 to clear the HCI bids as well as those for Hindustan Zinc Ltd which are to be received on November 8.

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