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July 03, 2007 12:16 IST
The proposed construction of 100 railway budget hotels across India to meet the Commonwealth Games tourist rush has hit a road block with no clear signal as to which authority will execute them.
The ministry of Railways had last month created a new Railway Land Development Authority (RLDA) as part of its new policy to take care of the bidding process of these hotels, which was earlier being done by the Indian Railway Catering and Tourism Corporation.
"Nothing has moved further ever since the authority is created. It is not clear who is in charge of the things," said a senior ministry official.
The mandate of RLDA is to develop new budget hotels on unused railway lands. If the new policy comes through, this statutory authority of the railways may also have to look after the renovation, maintenance and operation of the hotels which has been under the supervision of IRCTC so far.
IRCTC will then have to take care of the catering and hospitality part only. Earlier, there were plans to hand over the Rail Yatri Niwas and Rail Ratna (budget hotels) to private operators on a 15-year and 30-year lease, a ministry source said.
The plans also envisaged dividing the ownership of rooms between the builder and the Railways on 70:30 ratio. But initial biddings had raised many eye-brows, so all previous deals are under the scanner now, the source added.
"In fact the bidding process for 20 hotels, which took place in January, is also on hold. In many cases the bidders don't even know where the land has been alloted to them," the ministry official said.
Besides 20 budget hotels in January, IRCTC had two months ago invited bids for 10 budget hotels from leading construction groups based in India and abroad, but the bidders are yet to be finalised.
Railway budget hotels are part of multi-agency effort to tide over the demand of low cost rooms, especially anticipated during the Commonwealth Games in 2010. Seeing the subdued response, the government had also announced a five year tax holiday for the builders of budget hotels.
The room cost in five-star hotels in India is highest in South Asia region which in peak season has touched $350 a night in Bangalore.
Commenting on the tardy pace of construction of budget hotels in country, Subhash Goyal, president, Indian Association of Tour Operators said the shortage might continue though the Games.
"It is not viable for a builder to raise a two- or three-star hotel on an extremely expensive land in big cities. They can not break even, even with five years tax holiday," Goyal said. IATO also building up 60 budget hotels in anticipations of the Games rush.
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