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Chandigarh: Drowning in losses, CITCO looks at PPP model for 3 hotels
Seven-member committee formed to study best practices for operating hotels under public-private partnership
Struggling to compete with private players and reeling under mounting financial losses, the Chandigarh Industrial and Tourism Development Corporation (CITCO) has proposed to run its hotels under the public-private partnership (PPP) model.
The proposal covers its three major properties — Hotel Mountview in Sector 10, Hotel Shivalikview in Sector 17 and Hotel Parkview in Sector 24.
To explore the feasibility of this plan, CITCO has constituted a seven-member committee to study best practices for operating hotels under the PPP model.
Headed by the general manager (Finance and Accounts), the committee has been authorised to visit other states, Union territories and corporations, where similar models are in operation. The committee is expected to submit its report at the earliest.
Employee unions oppose move
However, the move has sparked opposition from employee unions. Both the CITCO Progressive Workers’ Union and CITCO Workers’ Union have raised objections, citing previous failures of the PPP approach.
In a joint letter to the CITCO chairman and managing director, Progressive Workers’ Union president Prem Lal and Workers’ Union president Kunwar Singh highlighted instances where leasing out properties to private firms led to financial losses.
They pointed out that the Drop-In facility in Sector 34 was leased to a private operator in 2020, but the licence fee has never been deposited, leading to a legal dispute.
“Due to non-payment and court expenses, the corporation continues to suffer financial losses and the revenue from the unit concerned remains blocked,” the letter stated.
Citing another example, the unions mentioned that Baithak Restaurant and Banquet at Kalagram was also leased to a private firm, which later surrendered the premises without notice and left outstanding dues unpaid. The outlet was allegedly damaged before being vacated.
The unions further referred to the Magic Wok restaurant at Hotel Mountview, which was supposed to be leased to a private party. However, the proposal failed to yield results, and neither the Chinese nor the Indian restaurant could be started.
The letter also mentioned the ongoing dispute regarding the Health Club at Hotel Mountview. The current allottee, accused of providing unsatisfactory services, was asked to vacate, but instead filed a case against CITCO. The district court ruled in favour of the licensee, and the matter is now pending before the Punjab and Haryana high court.
The club continues to operate under the same party, causing further financial loss to CITCO, the unions alleged.
Measures to stay afloat remain on paper
Despite identifying challenges and discussing reforms last year, CITCO has failed to implement any effective measures to revive its hospitality business.
In a board meeting held in November 2024, members had expressed concern over declining room occupancy and falling profits. Then chairman Ajay Chagti had emphasised the need for a new marketing policy to strengthen CITCO’s competitiveness against private hotels.
A team of officers had even visited Kerala to study its tourism strategies and presented their findings before the board. The board subsequently decided to introduce a robust marketing policy, enhance guest satisfaction and review service standards across CITCO hotels based on customer feedback and online ratings.
It was also proposed that the sales team should have greater control over pricing and discounts, adjusting rates according to seasonal demand. However, no concrete steps have been taken since then.
Established under the Companies Act, 1956, on March 28, 1974, CITCO has played a pivotal role in Chandigarh’s industrial and tourism development. Over the decades, it has managed landmark hotel properties, along with popular outlets like Chef Lakeview at Sukhna Lake and Baithak at Kalagram. But with the rapid rise of private hotels and restaurants in the tricity, CITCO’s financial performance has steadily declined, forcing the corporation to explore new survival strategies.
