Srinagar, Feb 11: A day after JK High Court directed Government of India to withhold leasing out of the Centaur Lake View Hotel here, the Union Civil Aviation Ministry has put the transaction on hold.
The deal was struck last year when the state-run Air India subsidiary, Hotel Corporation of India, gave a lease to manage the hotel to Mumbai-based DB Realty, whose Managing Director Shahid Balwa has been arrested by the CBI for his alleged role in the 2G spectrum scam.
The Civil Aviation Minister Vayalar Ravi said “some problems” with the Centaur Hotel deal had been brought to his notice. He said the hotel’s employees had raised some issues with the ministry. He did not elaborate.
The leasing out of the business establishment at a scenic place on Dal Lake here had irked the Jammu and Kashmir Government, which is a co-owner of the property. The state Government had reportedly offered to take over the hotel and argued that the state’s laws forbid sale of property to non-state subjects.
Praful Patel, the former Civil Aviation Minister, blames Air India for the deal, while the airline says the matter was handled by the ministry.
On September 23, 1010, the Centaur Hotel employees challenged the deal in the J&K High Court on the grounds that it amounted to privatisation.
The deal is being scrutinised by Government agencies for the manner in which it has been executed. DB Realty bagged the lease for 33 years paying just 1 crore a year to Hotel Corporation of India, government officials say. An Air India spokesperson squarely blamed the ministry.
“There was no political pressure since the entire procedure was carried out by the ministry. Four bids had come in and the DB Realty bid was the highest,” the spokesperson said.
Patel, on the other hand, claims that the ministry had nothing to do with the deal. “This was driven purely by Air India. This is not even privatisation but a management deal. The hotel has been in the ruins for over 20 years now. It’s ridiculous to suggest that the ministry or myself had anything to do with this. This matter did not even come to us and it is utter rubbish to suggest that the ministry had anything to do with this. This kite flying should stop somewhere,” Patel said. He said there was nothing surreptitious about the deal and that Air India did call for tenders.
On being asked whether the DB group is close to the Nationalist Congress Party as has been alleged, Patel said that Shahid Balwa’s family is known to Sharad Pawar for the last 30 years. “What’s wrong with that? Who is denying it? DB has been operating the dynamix dairy in Baramati (which Pawar has frequently represented in parliament) for years now,” he added.

Lastupdate on : Fri, 11 Feb 2011 21:30:00 Makkah time
Lastupdate on : Fri, 11 Feb 2011 18:30:00 GMT
Lastupdate on : Sat, 12 Feb 2011 00:00:00 IST