The government is planning to privatise Delhi’s iconic hotel, The Ashok, according to sources.
The tourism ministry and the department of investment and public asset management are working on a cabinet note to give the sprawling 25-acre property on a long lease of 90 years. Located barely a few hundred metres from the Prime Minister’s residence in the heart of Lutyens’ Delhi, the property consists of a 300-room hotel, service apartments, shopping mall and stand-alone restaurants, pubs and an upmarket health club.
The leasing of The Ashok is expected to fetch close to a billion dollars for the government. The cabinet note, according to sources, is being prepared in consultation with the Prime Minister’s Office and the sale will be completed by the end of this year.
Mukesh Ambani is among the frontrunners to acquire the hotel. Ambani has long been looking to own a five-star hotel in New Delhi. Reports say that when the deals to buy out the Nandas from Hotel Claridges did not go through, Ambani then invested in Hotel Oberoi. A luxury five-star hotel brand run by East India Hotels Ltd, Hotel Oberoi has his wife Nita as a director. But the control of the hotel remains with Prithviraj Singh ‘Biki’ Oberoi.
Ambani, sources said, is still looking for a hotel with full control and The Ashok could be an opportunity for him.
The hotel came close to being sold during Atal Behari Vajpayee’s government when his son-in-law Ranjan Bhattacharya reportedly tried to take it over through a hospitality venture he was associated with. But the then union minister for tourism, Jagmohan, put his foot down and refused to sell it.
Jagmohan blocked the sale of the hotel by using the Vajpayee government’s commitment that it will not sell any profit-making government company. The minister pressed the then acting ITDC chief Ashwini Lohani to make sure that The Ashok made profit that year. The hotel ended up making operational profit of a couple of crores.
