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Accor to take over Great Eastern Hotel

India's communist-ruled state of West Bengal plans to transfer management of a 160-year-old hotel in Calcutta to French hotel giant Accor by the middle of the year, a government official said.

West Bengal's government, a bitter critic of the country's privatisation initiatives, has decided to hand over control of the loss-making Great Eastern Hotel, built during British colonial rule, to the French firm.

"We should be able to hand over the hotel to Accor by June 30 free of all encumbrances," Pranab Ray, principal secretary of the state's tourism department, told Reuters late on Thursday.

He said a memorandum of understanding with Accor would be signed by the end of this month outlining steps to protect the interests of workers.

The state government faced strong trade union protests when it announced the decision last year to hand over the hotel to Accor.

Union leaders, who successfully blocked an earlier privatisation bid in 1995, said they were perturbed by a clause in the proposed deal allowing Accor to offer a separation package to employees aged 45 and above.

Trade union leaders said the voluntary retirement scheme was a form of retrenchment for the hotel which employs 475 people, most of them older than 40.

Government officials said the state had held two meetings with Accor representatives to discuss ways of protecting the interests of the workers.

"We don't expect any problems from the workforce when they are told the terms of the new agreement," Ray said.

But trade union leader Atiar Rahaman said workers would meet state tourism minister Manab Mukherjee to find out what steps were being taken to protect their interests.

"Only a categorical assurance (from the minister) that retrenchment would not be resorted to will satisfy us," Rahaman said.

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