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A Tribune Special
Centaur Hotel in darkness for 17 days
CAG indicts NDA Govt on disinvestment deal
Swati Chaturvedi
Tribune News Service

New Delhi, November 25
Centaur Hotel in the prime Juhu beach area in Mumbai has been in darkness for 17 days. Reason? Reliance Power has cut off electricity supply to the hotel for non-payment of bills amounting to Rs 1.10 crore. The hotel that was considered a shining story of disinvestments of the NDA government was sold to Ajit Kerkar promoted Tulip for Rs 150 crore.

With Kerkar not being able to clear even electricity-bills, the 800 employees of the hotel face an uncertain future. Meanwhile, the Comptroller and Auditor General (CAG) has severely indicted the Divestment Ministry under Arun Shourie for the deal. Authoritative sources told The Tribune that the Ministry had literally bent over backwards to sell the hotel to Kerkar.

It now transpires that Kerkar had only put in Rs 5 crore of his own funds to purchase the hotel. In a series of unusual moves, the Divestment Ministry liberally bailed him out by not forfeiting his guarantee money and rebidding for the hotel and even went to the extent of providing him help in getting banks to finance the deal.

The CAG has questioned several aspects of the deal including the fact that no rebidding was done and whether the hotel, which is a prime property in Mumbai, was sold for the highest possible price.

The deal had created a huge controversy during the last session of Parliament with the Left demanding a CBI inquiry in to the deal. Interestingly, Finance Minister, P. Chidambaram had said that he would wait for the CAG report before taking action. The Left wanted the deal cancelled and a government take-over of the hotel.

Even the Shiv Sena, a key ally of the NDA government’, was against the deal. Sena MP, Sanjay Nerupam told the Tribune that he was convinced of the mala fide nature of the deal and had written to the Finance Minister, asking that the hotel be taken over. Despite, repeated attempts Kerkar were not available for comments.

Some of the employees of the hotel, which was earlier owned by the Hotel Corporation of India (HCI), say that they fear that Kerkar has shown no interest in running the hotel. They say that their salaries are delayed and fear that they will be asked to take VRS soon.

Their fears are not entirely unfounded since the other Centaur hotel in Mumbai — airport Centaur — was sold by the government to Batra Hospitality, which made a huge profit within three months, by selling it to Sahara.

In any event with power being cut off to the hotel the deal will generate a lot of heat in the coming session of Parliament with the government being left with little options other then reverse investment.


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