A year after an unseemly controversy clouded the smooth functioning of Shimla’s luxury hotel, Wildflower Hall, a Rs 100 crore joint venture between the State government and the Oberoi Group, the clouds of suspicion and distrust have refused to lift and float away. Allegations and counter-allegations that flew back and forth last year between the now estranged partners still continue to plague them today, and matters have reached such a pitiless state, it hampers the smooth functioning of the luxe hill resort. While the government has filed three cases in the High Court to plead its case, the Oberois complain of daily harassment like the government’s refusal to give water and of denying them permission to open 56 additional rooms, ready since last year.So, what started as a strategic partnership between the government and the private sector for high profit, has dwindled into no-win battle for both. Two governments have come and gone and the Virbhadra Singh Government which signed the agreement in the first place is back in power, but three months later and the high-season almost over, it is back to nothing.State government officals say a high-level committee was recently appointed to seek the best possible way to pull out of the partnership. ‘‘It is on this government’s intervention, a committee headed by the chief decretary, tourism secretary and other officials was set up to look into the best solution for a pull-out,’’ says a senior official. ‘‘However, the agreement has to be equitable and the Oberois should give us our fair share.’’But therein lies the crunch — neither party is willing to amicably arrive at an agreeable figure. According to the government, what started as 65:35 in a Rs 40 crore joint venture, with the Oberois being the major shareholder, later went in the Oberois’ favour as the equity jumped to Rs 100 crore. The Oberois say its shares should rise as it put in the additional Rs 60 crore for the hotel.Says the official, ‘‘As project costs went up, chances of profit went down. While the extra costs are debatable, it is now clear no dividends can be issued. Therefore, we would like to pull out of the venture, let the Oberois pay for the property, which we feel was sold for a song and which was our share in the venture, and we’ll call it quits.’’According to an Oberoi management officer, ‘‘This Government is playing into the hands of bureaucrats who are trying to prove they were right and we were wrong. The Company Law Board which looked into the merits of the case has clearly stated we were right. We’ll be glad if the government pulls out but we don’t know what they want. They casually call us up for a meeting but we want them to write a letter, write down the agenda.’’Government shares are worth Rs 7 crore, in lieu of the land valued at the time of the deal, says the Oberoi official. ‘‘We paid more despite two evaluations which valued the land at Rs 3.5 crore,’’ he adds, ‘‘however, can the negotiations be conducted in a good atmosphere today?’’ he asks.‘‘The last government’s case was we bribed the Virbhadra Government for Wildflower Hall, but we did not capitulate and stood up for them. The Virbhadra Government is back but we are disappointed with their attitude — they have not given us two things the previous government also denied us. Water and the NOC for 56 ready rooms. We have lost another season and the state has lost revenue in taxes.’’If the stalemate continues for any longer, Wildflower Hall will soon turn into a wallflower for Himachal Tourism.
