WB Committee On Disinvestment Of GEH Examining I-WIN Report

EH&C Staff - Kolkata

A committee of secretaries headed by the West Bengal chief secretary S N Roy is now scrutinising the I-WIN report on disinvestment of the century-old Great Eastern Hotel (GEH). Once the committee selects one of the bidders, it would be referred to the state Cabinet for its final approval. The process is expected to be completed by July.

The state government had earlier appointed I-WIN to evaluate the three bidders – whether they are financially strong and have adequate expertise and know-how to run the century-old hotel. I-WIN, a joint venture between the ICICI and WBIDC, a state government undertaking, closely evaluated all the three proposals and submitted the report to the state government recently. The agency in its detailed report has listed all the merits and demerits of each of the three offers separately.

Earlier, a global tender had been called for leasing out the hotel for 30 years, on 'as it is, where it is' basis along with all liabilities. The state government has received bids from three parties, namely Badshah Hotels (India), Singapora Limited, a Singapore based company and Manish International Financial Services of Malaysia. The three companies have submitted bank guarantees of Rs 25 lakh each along with the bid documents.

The other two major hotel groups, which backed out after showing interest initially, are the Oberoi Grand and Bharat Hotels of Lalit Suri.

The hotel needs an overhaul and the company that finally takes Great Eastern will have to invest Rs 3 crore to Rs 5 crore to renovate and modernise it to bring it at par with international standards. The government has made it clear that it is not in a position to invest to renovate and modernise the hotel.

The cash-strapped tourism department of the state government has been incurring an annual loss of over Rs 2.5-3 crore per annum to run the 220-room hotel. About 500 employees are still at Great Eastern Hotel's pay roll.

The government has been trying to sell the hotel for nearly a decade now. A few companies, including Accor Asia Pacific of France had shown interest but later backed out. Ultimately, there were no takers as none agreed to shoulder the liability of the 500-odd employees of the hotel.

Now these employees can heave a sigh of relief. All the three final bidders are willing to take over the hotel. Officials indicate that the three bidders are apparently equally serious to go for the final tests.

The tourism department is pinning its hopes on a smooth turnover because the main hurdle of the employees' burden is out of the way.