Mayawati government to lease out hotels to private firms


Lucknow : In a quiet move, the Mayawati government in Uttar Pradesh has decided to give out most state-run hotels and tourist bungalows on long-term lease to private players, state Tourism Minister Vinod Singh confirmed Thursday.

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The government’s decision Wednesday was kept under wraps and not mentioned in press releases on cabinet decisions.

“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,” the tourism minister said. “The (renewable) lease will be granted for 30 years.”

These hotels and tourist bungalows employ around 450 people.

“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 viable despite our vest efforts.”

He added, “Twenty-six of the properties were lying shut for years while 14 were running heavy losses.”

Some employees opposed to the idea, however, claimed that the decision was prompted by the huge real estate potential attached. “A total of 80 hectares of land, worth anything around Rs.400 crore, was bound to elicit huge kickbacks,” a senior employee alleged.

While lease-holders will be selected through open bids, they will be expected to make the establishments operational in six months. “We are going to make it binding but they will get a grace period of five years to develop these into two or three-star level hotels,” said Tourism Secretary Manoj Kumar Singh.

“The change-over is estimated to shoot our annual profit from Rs.4 crore to at least Rs.20 crore in the very first year,” he added.

Last year, the tourism department’s profit was Rs.4 crore. “Nearly Rs.2.25 crore of that profit came from parking fees earned from the Taj Mahal and Fatehpur Sikri in Agra, while Rs.1.25 crore came as lease rent from the Agra Jaypeee Hotel built on government land,” the secretary said.

“After five years, the state government will reserve the right to choose between lease rent or five percent of the revenue, whichever is higher,” he added.