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Tourism ministry to set up land banks for hotels

The Union Tourism Ministry is contemplating a move to acquire commercial plots from DDA for setting up a 'land bank' to build new hotels, reports Hemendra Singh Bartwal.

india Updated: Dec 08, 2006 20:21 IST

In view of the enormous projected demand for five-star hotel accommodation in the Capital during 2010 Commonwealth Games , the Union Tourism Ministry is contemplating a move to acquire commercial plots from DDA for setting up a 'land bank' to build several new hotels.

Discouraged by the steep prices fixed by DDA for auction of hotel sites, determined at existing market rates, not many private groups are coming forth to set up new hotels. At the last auction of nine hotel sites in Delhi, there was only one bidder, sources stated.

The situation has evoked serious concern in the Tourism Ministry which is keen to ensure that there are enough hotels in the Capital to meet the estimated demand of 30,000 rooms around the time the Commonwealth Games are held.

According to a senior official in the ministry, a proposal has been mooted to set up a land bank by acquiring several hotel sites from DDA in different parts of the city. These can be bought at rates fixed for selling land to government agencies which are substantially lower than the prevailing prices for commercial hotel sites.

Emulating the public private partnership model adopted by the Railway Ministry for setting up 100 budget hotels at its stations across the country, the Tourism Ministry is looking at joint ventures with private sector to set up the star-hotels in Delhi.

Under the scheme, plots from the Ministry's land bank can be allotted to private hospitality groups on a long-term lease and the latter will invest in
building the hotels and other infrastructure and operate them on a profit-sharing basis.

The proposal will have to be put up before the Planning Commission for its approval before the Ministry can proceed with it. A final decision on the move is yet to be taken, the official said.

The Ministry has also recommended to various state governments, particularly in Delhi's neighbouring states, that they should create land banks to facilitate setting up of star hotels that can cater to the needs of the large number of foreign and domestic visitors who are expected in Delhi during the Commonwealth Games.

First Published: Dec 06, 2006 02:08 IST