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Wednesday, Mar 12, 2003

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Industry & Economy - Disinvestment


Smooth sell-off likely for Delhi Centaur

Ashwini Phadnis

NEW DELHI, March 11

IT'S a classic case of being once-bitten-twice-shy. After burning its finger over the sale of the 100 per cent subsidiary of Air India, Centaur Hotel Mumbai Airport (CHMA), the Government is looking at the possibility of changing some ground rules to facilitate the disinvestment process.

Official sources told Business Line that the Government could consider doing away with the existing clause of previous hoteliering experience being a must for those participating in the bidding process for Centaur Hotel Delhi Airport.

However, while this relaxation in the bidding process is likely to be acceded to, the successful bidder will be strictly forbidden from utilising the property for anything else except for carrying out hotel business.

The latest thinking in the Government comes after the disinvestment of CHMA ran into trouble. While the A.L. Batra group was the successful bidder for the CHMA property, the Group decided to on-sell the business to the Sahara Group. The deal reportedly resulted in Batra group making a sizeable profit in the entire transaction. While the Attorney General gave a clean chit to the sale of the hotel by the Batra group, the Parliamentary Standing Committee, in its report, has called for an enquiry by the Central Vigilance Commission (CVC) into the entire transaction.

The proposed change in rules for divestment, if accepted, would mean that the Government could directly sell the property to the successful bidder, thereby ensuring that a good price is realised right at the start of the process.

No time-frame has yet been fixed for the sale of the Delhi hotel. Earlier, the Minister for Civil Aviation, Mr Syed Shahnawaz Hussain, had said that the property would be divested only after a world-class airport is completed in Delhi so as that the Government would be able to garner more funds from the sale.

However, sources maintain that there is no question of waiting that long and the property may be divested even as the process for restructuring of Delhi airport gets under way. "Once the basic decision to restructure Delhi airport is taken, the bidders will have a good idea of what to expect from Delhi Centaur. We can always enter the market at that time and ask for bids for the hotel," sources maintained.

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