Govt eyes convention centre stake

The government may take a 26 per cent equity in companies that build and manage convention centres in Delhi, Mumbai, Goa and Jaipur, sources in the finance ministry said.

The government is reportedly considering two financing options. One is to route the equity though state-owned entities like the Airports Authority of India for Delhi and Mumbai or the Indian Tourism Development Corporation for Jaipur.

The second is to invest directly under the viability gap funding mechanism.

This allows the government to make good that portion of investment in infrastructure that may be unviable for the private sector.

The ministry had earmarked Rs 2,000 crore (Rs 20 billion) for this purpose. Each convention centre is expected to cost Rs 2,500 crore (Rs 25 billion) and equipped to handle about 100,000 tourists annually.

The ministry of tourism will float global bids and selection will be on the basis of the minimum support sought by the parties from the viability fund.

The civil aviation ministry has reportedly sent proposals for convention centres in Delhi and Mumbai.

In Delhi, it has suggested the now defunct Safdarjang Airport as a venue and equity participation by Airports Authority of India.

For Jaipur and Goa, which were selected from preliminary proposals from seven states, the government initially plans to focus on upgrading the infrastructure there.

Accordingly, the ministry has decided to convert Jaipur's airport to international status.

For Goa, the plan is to improve facilities to enable the state to host international film festivals.