In a quiet move, the Mayawati government has decided to give away bulk of its hotels and tourist bungalows on long-term lease to private players.
While a decision to that effect was taken by the state cabinet on Wednesday, it was kept under wraps until the news leaked on Thursday. Significantly, the decision did not figure anywhere in the press releases, running into 13 pages, with details of all other cabinet decisions on Wednesday evening.
"Other than 11 hotels and tourist bungalows run by the State Tourism Development Corporation, the remaining 68 will shortly be put up for private lease," Tourism Minister Vinod Singh confirmed here Thursday.
The lease would be granted for 30 years after which it would be renewable for another 30 years," he said. "The remaining 11 ones would be given away on management lease," he added.
Asked what prompted the government to take such a decision involving as many as some 450 employees, the minister said, "As far as the employees are concerned, we have taken care to ensure that there will be no change in their service conditions. However, the decision had to be taken because the properties could not be made economically viable despite our vest efforts."
According to him, "Twenty-six of the properties were lying shut for years while 14 were running into heavy losses." Some employees, who were opposed to the idea, claimed that the decision was prompted by the huge potential of real estate attached to each of the properties.
"A total of 80 hectares of land worth anything in the region of Rs 400 crores was appended to the hotels and tourist bungalows, and that was bound to elicit huge kickbacks," alleged a senior employee, on the condition of anonymity.
While the leaseholders would be selected through open bids, they would be bound to make the hotels operational within the next six months.
"We are going to make it a binding for the leaseholders to ensure that the presently shut hotels become operational within a period of six months from the date acquisition, but they would get a grace period of five years to develop these into two or three-star level hotels," disclosed Tourism Secretary Manoj Kumar Singh.
He said, "The changeover is estimated to shoot our annual profit from Rs 4 crore to at least Rs 20 crore in the very first year itself."
As of now, with an annual turnover of Rs 35 crore, the Department had made a profit of barely Rs 4 crore last year.
"And nearly 2.25 crore of that profit was coming out of the parking fee earned by the department from Taj Mahal and Fatehpur Sikri in Agra while Rs 1.25 crore came as lease rent from the Agra Jaypeee Hotel that was built on Tourism Department's land ", he said.
"And after a period of five years, the state government would be entitled to choosing between the lease rent or 5 per cent of the revenue , whichever is higher, "he added.
