National

Shourie denies notional loss on Mumbai Centaur Hotel sale

By Our Special Correspondent

NEW DELHI, FEB.19 .The Disinvestment Minister, Arun Shourie, today denied that there had been any "notional loss" to the exchequer on the sale of the Mumbai Centaur Hotel to the Batra Hospitality company, though the property was resold after six months.

Reacting to a report by the Comptroller and Auditor General (CAG) on the revenue loss as a result of the deal and the issue having been raised by the Communist Party of India (Marxist), he said there was no way to prevent such re-sales unless a lock-in period is prescribed in the sale deed.

While expressing utmost respect for the CAG's views, he felt that his Ministry would have given answers to the questions raised on the deal if they had been referred to it, than to the Airports Authority of India (AAI). The issue would be taken up with the Cabinet Secretary as well as with the CAG.

Mr. Shourie denied allegations by the Opposition parties that the hotel had been sold to a bidder close to the sangh parivar. There were originally four bidders. Of them only one was left in the second round. Those in the first round included the Indian Hotels Company of the Taj group, the ITC and Morepen Hotels. As for the owner of the Batra Hospitality, A.L. Batra, he said: "No one from the RSS has spoken to me (about this issue)."

The Minister, who was addressing a press conference, said the bidding in the first round reached Rs. 65 crores and it went up to Rs. 83 crores in the second round. As a result, there was no revenue loss and there could be no way of preventing resale transactions in the absence of a lock-in clause in the sale agreement. Asked about a similar clause in the BALCO sale, he said that had been incorporated due to fears of "asset-stripping" by the buyers. Besides, he pointed to the "collective responsibility" of the Government as the issues relating to the Centaur sale were considered by the core group of secretaries on the basis of recommendations from the financial advisers and then finalised at the Cabinet Committee on Disinvestment (CCD).

He felt the disinvestment procedures followed by the Government were "cast iron" and upheld by the Supreme Court in the BALCO disinvestment case.

He stressed that the procedures followed in the Centaur deal were completely transparent and the allegations had been replied to in Parliament. Those raising the issue now were making a "football out of it for the electoral process."

On the demand for a CBI enquiry by the Opposition, he said the same people felt the agency could be manipulated, but said anyone could enquire into it including the Chief Justice.

Mr. Shourie noted that his Ministry had come into the picture only after the Civil Aviation Ministry had completed the entire process. At that stage only financial bids had to be called. Initially, only one party had bid, but this was below the reserve price.

Consequently, the CCD had suggested reviewing the terms and the four bidders were informed about lowering of the lease rent and then asked to bid. In the rebidding, the Government was able to garner Rs. 83 crores.

The CAG report had said that the failure of the AAI to determine the initial licence rent along with the rate of annual escalation and also reduction of turnover levy from six to two per cent resulted in foregoing of revenue of Rs. 145.69 crores.

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