NEW DELHI, May 4 — A cash-strapped Assam Government in an apparent bid to stall the disinvestment of Assam Ashok Hotel Corporation Ltd (AAHCL), has offered to buy Indian Tourism Development Corporation’s (ITDC) stake in the three-star hotel. A joint venture project between the ITDC, which holds majority stake of 51 per cent, and the Department of Tourism of Assam Government, it was identified for disinvestment in keeping with the Centre’s policy of pulling out of loss-making ITDC-run hotels. The Assam Government has 49 per cent stake in the hotel.
The Minister for Disinvestment, Arun Shourie, recently told newsmen that while many States refused to concede, Assam was among a few States that have offered to buy ITDC’s stakes. But the Assam Governmnt’s bid has raised quite a few eyebrows with officials here wondering how the State, which itself is desperately trying to make both ends meet, was going to organise the funds.
Interestingly, the offer also comes at a time when the Assam Government is trying to dispose of its sick State Public Sector Undertakings so much so that it has sought Rs 50 crore from the Planning Commission this week to introduce Voluntary Retirement Scheme (VRS) in a few selected PSUs. The deal to buy AAHCL, better known as Brahmaputra Ashok, is expected to cost the government dear given that the hotel is barely managing to keep itself afloat, though in a break from the past last year it managed to earn a profit of Rs 16.52 lakh. But the board of directors had not recommended dividend for the year. The year before that it incurred a loss of Rs 19.82 lakh.
According to the annual report of the hotel tabled in Parliament this week, as of last financial year it has an outstanding loan of over Rs 1.6 crore with Assam Industrial Development Corporation (AIDC) and Rs 1.6 crore with Assam Financial Corporation (AFC). The AAHCL’s doubtful debt of Rs 44.72 lakh was also found to be quite staggering by its auditors. The hotel that has 86 employees on it rolls had in the last year piled up a bad debt of Rs 17.33 lakh.
Significantly, a Planning Commission report on the State said that plan investments have been made by Assam in areas where financial returns are abysmally low. The report has identified heavy expenditures on law-and-order machineries as among the prime culprits leading to difficulties in repayment of mounting loan liabilities. On the other hand, the Assam Government’s thrust this year was on shifting its backbreaking salary burden from Plan to Non-Plan heads.
The staggering salary burden of Rs 750 crore, the Assam Government felt, was eating into its developmental funds. It has worked out a roadmap to shift the entire salary burden to Non-Plan heads by 2004-2005. Last Monday, when officials of both Planning Commission and Assam Government met to finalise the State’s annual plan for the year, the State Government was advised that to develop tourism, it set up a multi-disciplinary coordinated mechanism to oversee tourism development. The State Government was further advised that to develop tourism it must focus on its identified travel circuits, focus on its river cruise schemes in line with Thailand and Myanmar and conceive events such as Dragon Boat Race.