Saturday, March 9, 2002, Chandigarh, India


M A I N   N E W S

HP takes over Wildflower Hall
S. P. Sharma
Tribune News Service

Shimla, March 8
In a mid-day swoop, the Himachal Pradesh Government today took over possession of the Rs 100 crore Hotel Wildflower Hall at Mashobra, near here, from the Oberoi group.

In a smooth operation, the hotel was taken over and a cheque for Rs 9 crore towards the equity participation of the Oberois was handed over to them.

A senior IAS officer and Managing Director of the Civil Supplies Corporation, Mr Srikant Baldi, has been appointed Executive Director and officer on special duty of Hotel Wildflower Hall. Mr Ajay Thakur, a Senior Manager of the HPTDC, has also been posted in the hotel.

The state Cabinet had earlier this week decided to terminate their joint venture agreement with the Oberois and taken over the hotel. The grouse of the state government was that the Oberois had violated a series of provisions of the agreement and had also tried to tilt the balance of the equity participation in their own favour.

Mr Rakesh Pathania, Chairman of the HPTDC, said the agreement provided that the hotel shall be made fully operational within six years and there was no scope for even a day’s extension.

The agreement also provided that the joint venture would cease to exist in case any breach was made.

The joint venture agreement between the Oberois and the HPTDC for constructing the hotel was signed during the Congress regime in 1995 when the earlier historical building, which was the residence of the commander of the British army, Lord Kitchner, was gutted.

However, the development was bogged under a political controversy as the BJP government, headed by Mr Prem Kumar Dhumal, which succeeded, accused the previous Congress government of having sold the interests of the state for a song to the Oberois. It was alleged that the previous government remained silent as the Oberois violated the agreement.

The international-level hotel constructed by the Oberois has 84 luxury rooms in an area of 102 bighas of prime deodar forest land.

While the agreed ratio of equity between the Oberois and the HPTDC was 65:35 per cent, respectively, on the original investment of Rs 40 crore, but the cost escalated to Rs 99 crore as the designs were allegedly changed. This reduced the equity of the HPTDC to merely 7 per cent which consisted of the value of the land.

The hotel had remained in controversy during the past four years and the state government had allowed the Oberois to operate only 28 rooms. The Oberois have already gone to the court in this regard.

The General Manager of the Oberoi group, Mr Raman Khanna, has rushed to Delhi to discuss the issue of the takeover with the management.

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