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Privatisation of Citco hotels put on back burner
The proposed privatisation of the hotels run by Chandigarh Industrial and Tourism Development Corporation Limited (Citco) has been put on the back burner till “more
The proposed privatisation of the hotels run by Chandigarh Industrial and Tourism Development Corporation Limited (Citco) has been put on the back burner till “more appropriate” time.
UT administration officials say that in the wake of the Covid-19 pandemic, economic situation is not conducive for privatisation process to go through.
Last year, UT had written to the Centre expressing its intent to ‘monetise’ hotels Mountview in Sector 10, Shivalikview in Sector 17 and Parkview in Sector 24.
The letter was in response to the Union government recommending monetisation of UT’s assets with four stadiums first taken up for this purpose. But the administration considered that the Citco hotels should be privatised or their management and working outsourced.
Stating that administration is keen, but current economic environment is not favourable, UT adviser Manoj Parida said, “It is the proposal with the administration and we have informed the Niti Aayog about it too. The final decision is yet to be taken as it is not economically most opportune time to auction the hotels. We will wait till the economic activity becomes more favourable.”
Management of Hotel Mountview and Hotel Parkview (then Chandigarh Yatri Niwas) was transferred to Citco in 1982. Initially, Mountview was run by a private group and after the company’s lease ended, the administration decided to take over the hotel. In 1988, Hotel Shivalikview (then Janta Hotel) was transferred to Citco and put in commercial use on January 1, 1990.
Earlier, fund-starved Citco had made attempts to lease out its outlets with Baithak at Kalagram, Drop In at Sector 34 and Stop-N-Stare at Sector 10, but the last year was the first time when it actively considered privatisation of three major hotels.
The administration had planned the process to start from Hotel Shivalikview. Monetisation in this case could mean privatisation of either the whole property or outsourcing of its management and functioning to raise revenue.
The working of Citco has long been under scanner and experts in the hospitality industry have criticised it for not being run on commercial lines. Lack of operational flexibility, bureaucratic way of working, and large workforce has been touted as the reasons for sluggish performance of the public corporation.
Citco has over 1,000 employees, with around 700 permanent and the remaining ones on contract. Nearly 52% of the revenue goes into paying the salary of these employees.
Citco’s relationship with the administration has also been questioned. For instance, the administration is yet to pay Rs 13.43 crore it owes to Citco. Of this amount, Rs 11.71 crore is to be paid for the expenses of Citco’s canteen being run in the UT secretariat at Sector 9 and Rs 1.45 crore for expenses of Delhi guest house and cars bought by Citco for administrative use. Similarly, the money paid by the administration to Citco for certain events remains unaccounted.
“After years of financial struggle, these three Citco hotels showed signs of economic gains at the end of last year but, with the Covid-19 pandemic, this recovery has come to a grinding halt,” said a senior UT official.
