Centre to monetise The Ashok Hotel; Samrat to be retained by ITDC

The Centre will license out The Ashok Hotel through the operate-maintain-develop (OMD) mode for a period of 60 years, and monetise its spare land in New Delhi for commercial development and making luxurious service apartments through public-private partnership (PPP). 

Hotel Samrat — separated from The Ashok by a boundary wall in New Delhi— will be retained by India Tourism Development Corporation (ITDC).

ITDC is a public-sector undertaking that owns The Ashok and Hotel Samrat.

The government, through its consultant, will hold a roadshow on August 22 to seek views of market participants on the proposed models for monetisation of ITDC properties. 

The proposal has been approved by a Core Group of Secretaries on Disinvestment headed by the Cabinet secretary. The Cabinet Committee on Economic Affairs is also learnt to have approved the division of ITDC’s The Ashok-Samrat complex property into four parts that includes Hotel Samrat, The Ashok for monetisation, 6.3-acre land parcel for service apartments, and 1.8-acre land for commercial development.

According to the proposal, The Ashok — spread across 11 acres — will be leased out via OMD, allowing the private partner to undertake refurbishment of the property. The private partner will have to overhaul facilities on the hotel premises for an expected capital expenditure of Rs 450 crore that is seen positioning it on the lines of other international legacy hotels such as Ritz Paris, The Savoy Hotel in London, Waldorf Astoria New York, and the Taj Mahal Palace in Mumbai.

The private player will operate the hotel that houses 550 rooms, about 200,000 square (sq.) feet (ft) of retail and office space, about 30,000 sq. ft of banquet and convention facilities, and eight restaurants of about 25,000 sq. ft.

The government will seek feedback from market participants on the proposal models, and structure the final plan accordingly, observed an official.

The 6.3-acre land parcel adjoining The Ashok in Delhi is being proposed for about 600-700 units of premium service apartments that will be monetised through PPP mode using the design, build, finance, operate, and transfer (DBFOT) model. 

The license period for the property is being proposed for 90-99 years, and the private partner will have to design and develop facilities, secure financing, and make payments to the authority.

Another adjoining 1.83-acre land parcel has been proposed for luxury retail-office development that will also be monetised through PPP-DBFOT mode. The lease will be for a period of 90-99 years for the five-/six-storey integrated building.

The private partner will have to design and develop facilities, secure financing, and make annual license fees to the authority. Both land parcels being proposed for commercial development and service apartments will have development restrictions due to height restrictions imposed by the Airports Authority of India in the vicinity.

  

A facelift

• The Ashok Hotel to be licensed to private player through OMD mode
• Makeover at an estimated cost of Rs 450 crore; will place The Ashok on a par with international legacy hotels 
• 6.3-acre land parcel to be monetised for 600-700 units of premium service apartments 
• 1.83-acre land parcel proposed for luxury retail-office development