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`ITDC divestment to be completed this fiscal'

Our Bureau

NEW DELHI, June 23

THE in-principle decision of the Cabinet Committee on Disinvestment to divest the Centre's stake in Utkal Ashok and Ranchi Ashok was necessitated by the fact that two were subsidiaries of Indian Tourism Development Corporation (ITDC) in which the State G overnments also had stakes, senior officials of the Department of Disinvestment said here today.

``We hope to complete the entire disinvestment process in ITDC during the current fiscal,'' according to the Secretary, Department of Disinvestment, Mr. Pradeep Baijal. The Government had earlier decided to disinvest its stake in ITDC.

Mr. Baijal said that the Department ``will try its level best'' to move the Cabinet note with specific proposals for the 11 PSUs before the next meeting scheduled for July 12.

The Disinvestment Commission, in its report, had suggested a two-pronged approach for disinvestment of Government stake in ITDC, including handing over hotels situated in prime locations such as Delhi and Bangalore, to established hotel chains through a competitive bidding process to be run on a long-term structured contract on loan-cum-management basis.

Further, it had suggested that the other hotels of the group may be demerged into separate corporate identities and disinvestment in the new companies be brought about through sale of 100 per cent Government shareholding in them.

ITDC has 26 properties classified into three segments _ luxury, budget and economy _ around the country providing 3,611 rooms. It reported a turnover of Rs. 169 crores during 1998-99, down from Rs. 190 crores reported during the previous year.

The annual occupancy rate in ITDC hotels has come down from 49 per cent during 1996-97 to 37 per cent 1998-99 mainly on account of decline in business and tourist traffic and devaluation of currencies of the Far-East Asian countries which made those dest inations cheaper.