Its one story each anti dis-investment group would like to harp upon - the turnaround of Ashok Hotel, which the government wants to sell, into a profit earning organization.
Not has Ashok Hotel’s profit increased, it is in now in competition with top five star hotels of Delhi like Hotel Park Royal and Hotel Le Meridian. In fact, the profit has increased from just Rs 34 crore in 2003-04 to Rs 4,800 crores in the year 2006-07.
This was precisely what the Tourism Ministry told the government when a proposal to disinvest part of Ashok Hotel, to support renovation, was mooted, earlier this year. "Hotel Ashok has been making consistent profit for the last two years. Thus is a fine example of a profit making public sector unit," the ministry told the government.
Part of Ashok Hotel was to be handed over to a private bidder for renovation and operation, the government had proposed. "By accepting a small sum of Rs 146 crore of a part thereof from a private partner, Indian Tourism Development Corporation would be giving the private partner disproportionate influence over this Rs 11,000 crore hotel," the ministry said.
The ministry also said that disinvesting part of the hotel would amount to running a hotel within a hotel and its privatization. Such a move by government in the past had received opposition from political parties like the Left. They were against dis-investment of the public sector hotels like Ashok when a similar proposal was framed during the NDA government in early 2000s.
The ministry’s opposition is not just limited to finances. It also raised a question about security asking what will happen to security clearance given to entire hotel for the visits of the Prime Minister and the President?
"From the security point of view the hotel is in close proximity of the residence of Prime Minister," the ministry said. Hotel Ashok is also a venue for important Central government functions including international conferences and meeting with visiting dignitaries.