Friday, August 5 2005 15:22 Hrs (IST) - World Time -

New Delhi: Government has decided to refer the cases of sale of the two Centaur Hotels in Mumbai to the CBI, Lok Sabha was informed today (Aug 5, 2005).

"In the light of observations made by the Comptroller and Auditor General relating to sale transactions of Hotel Juhu Centaur and Hotel Airport Centaur in Mumbai, Government has decided to refer the case to the CBI for an inquiry," Finance Minister P Chidambaram said in reply to a question.

Chidambaram quoted the C&AG report as saying that both transactions became sole bidder cases without the benefit of competition.

"In the absence of the operation of the market effectively, the issue becomes central. It was observed that the value of the properties and fixation of reserve price were not consistent with the practice followed by the Ministry in other cases," he quoted the report as saying.

The Finance Minister said there was no proposal at present for CBI probe

The Finance Minister, however, said there was no proposal at present for CBI probe into divestment of other government hotels.

He said 19 hotel properties of India Tourism Development Corporation (ITDC) were disinvested between November 2001 and September 2002.

"All these properties were sold/leased at a price higher than their respective reserve price", he said, adding that the two Centaur Hotels were also sold at Rs 83 crore (Airport Centaur) and Rs 153 crore (Juhu Centaur) as against their respective reserve prices of Rs 78.3 crore and Rs 101.6 crore.

On the two Centaur hotel sales, the C&AG report had observed that 'various relaxations' allowed to the bidder and interventions by the Ministry to facilitate the sale, indicated inadequate efforts to mitigate the risk of transaction in a limited competition scenario.

"The efforts made to balan1e the need and urgency to sell the properties and to obtain the best possible price from the sale were also not evident", Chidambaram quoted the report as saying.

The 19 other ITDC hotels fetched a total of Rs 30.30 crore as against their total reserve price of Rs 23.78 crore, the Finance Minister said.

Of the 19 hotel properties, five were in Delhi Hotels Kanishka, Ranjit, Indraprastha, Qutab and Lodhi, apart from the Airport Ashok in Kolkata and Kovalam Ashok Beach Resort in Kerala.