Crown to develop 5-star property on Idcol land

A local hospitality company, The Crown, has outbid the Taj group for a patch 2 acres of prime land in Bhubaneswar meant for establishment of a five star hotel.

But as the local company lacks the experience of setting up of five star hotel, it will have to partner with a big hotel chain to develop the property , the sources said.

The Crown quoted the highest price of Rs 18.1 crore for the land, owned by Industrial Development Corporation of Orissa Limited (Idcol), which is followed by Rs 16.7 crore quoted by the Taj group.

Interestingly the land is located just across the road from an existing property of The Crown on the western part of the city.

Sources said, The Crown will have to form a separate company for implementing the project where 11 percent equity will be held by the outside partner.

This partnership will be for at least 6 years out of which the partner 5 star hotel group operates the property for at least 3 years, official sources said.

“The Crown will have to form a separate company with 11 percent equity held by a 5 star hotel. It will have to fulfill all the conditions of tender within 60 days and deposit the consideration money for signing the land lease agreement”, Ashok Kumar Meena, managing director, Idcol told Business Standard.

Though 16 to 17 hoteliers and estate developers were in the race for this piece of land in the pre-bidding stage, 9 parties were short listed in the first stage.

However, based on the network criteria and the technical experience, two were screened out and 7 were eligible to participate in the price bid.

In case the Crown fails to fulfill the conditions of tender and deposit the consideration money, then the project will be awarded to the Taj group, which is the second highest bidder, Meena added.

Litigation free land located in a prime locality in the city evoked good response from the developers and hoteliers and Idcol will get fairly good price, an official associated with the process said.

Hoteliers like Taj Hotels Resorts and Palaces, Dubai based Ramee International Orchid Hotels, Green Park, HDIL and local groups like The Crown Hotel participated in the price-bid.