Tourism Ministry readies survival kit for ITDC

The Plan proposal suggests that the ITDC could arrive at a minimum reserve price for this bid and a fixed percentage of rental revenue earned through this venture would be go to a Tourism Promotion Fund, to be set up by the ITDC.

Citing the fact that the ITDC is out of its duty-free trade business both in Delhi and Mumbai, the Plan proposal says that ITDC is finding it difficult to survive and that its properties are in bad shape.

An amount of Rs 237.85 crore would be earmarked to make the ITDC hotels more competitive. Keeping in view the 2010 Commonwealth Games, a good part of the sum would be spent on Delhi ITDC hotels. As per the plan proposal, Rs 185.15 crore would be spent on the upgradation of Ashok Hotel, Samrat Hotel and Janpath Hotel in Delhi. Fifty per cent of the renovation cost would be met by the Ministry of Tourism and the rest would be raised through market borrowings from banks and other financial institutions.

Stating that the ITDC has overcome continuous losses over several years, the proposal claims that it has started showing profits since 2003-4. It, however, needs government support in upgradation of existing properties, the 11th Plan Proposal states.

The “Revitalisation Plan” for the ITDC, prepared by the ministry, is quite in tune with the recommendations made by the Parliamentary Committee headed by CPI(M) leader Sitaram Yechury, which had said it should be made capable to act as a “catalyst for tourism development across the country”.

The committee had recommended that the ministry grant matching equity support to the ITDC on a 1:1 basis to upgrade and renovate the Ashok Group of Hotels. It had also recommended that the ministry offer some ITDC property, including joint venture property, on a lease-cum-management contract basis to the private sector for making capital investments.