CITCO flagship units continue to bleed; losses mount
There seems to be no end to the financial woes of the Chandigarh Industrial and Tourism Development Corporation (CITCO) as majority of its flagship units continue to incur losses. In the first four months of the current financial year, the corporation sustained a loss of Rs 76 lakh as against Rs 8 lakh during the corresponding period last year.Updated: Sep 02, 2014, 13:24 IST
There seems to be no end to the financial woes of the Chandigarh Industrial and Tourism Development Corporation (CITCO) as majority of its flagship units continue to incur losses.
In the first four months of the current financial year, the corporation sustained a loss of Rs 76 lakh as against Rs 8 lakh during the corresponding period last year.
It has been further learnt that the losses would further escalate if factors such as depreciation, provision for retirement benefits and taxes are taken into account.
Hotel Mountview’s puts a poor show
The revenues of Mountview, a five-star hotel, have been decreasing in the past few years.
The hotel’s loss increased from Rs 1.4 crore to Rs 1.85 crore. The unit’s poor performance is attributed to low occupancy, which witnessed a 22% decrease despite reduction of average room recovery (ARR) from Rs 5,050 to Rs 4,490.
The ever-increasing salary expenditure is another factor responsible for the poor showing of the hotel. As per the official figures, which will be tabled before the board of directors on September 2, the salary expense of the unit is 83% of total sales against industry norms of 30%. The expense would increase to 92% if the salary of the staff hired from service provider is accounted for.
Hotel Parkview, others no good
The Hotel Parkview has recorded a negative growth during the period.
The unit’s profit has come down from Rs 1.69 crore to Rs 1 crore despite increase in room rent from Rs 1,880 to Rs 1,937. The room occupancy has decreased from 78% to 66%.
Ventures such as Drop In, Baithak, Industrial Development Facility Centre (IDFC) and canteens have also recorded losses. Steel Depot, petrol pumps and hotel Shivalikview are the only saving grace for the corporation.
No measures taken
Despite the corporation witnessing steep fall in revenue in the last few years, the management has cared little about putting on this.
With no financial assistance from the UT administration, Chandigarh Industrial and Tourism Development Corporation has to generate funds to meet all its expenses, including salary of the staff.
The management has failed to address serious issues such as alleged corruption, wrong deployments and overstaying of officials at one position. It has also failed to conduct efficiency audit of its employees as directed by UT administrator Shivraj Patil to identify non-performing employees.
Bhawna Garg, who recently took over the charge of Chandigarh Industrial and Tourism Development Corporation managing director, said they have planned a slew of measures for putting a check on the falling revenues.