The Telegraph
Since 1st March, 1999
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Bid to turn 5-star friend around
- Govt sets up talks after Mumbai firm shies off hotel project

Ranchi, Feb. 17: The government’s negotiations for a five-star hotel in the state capital in association with the Mumbai-based Sound Craft Industries has hit a roadblock.

The company, apparently the only bidder to have shown interest in the project, first laid down tough conditions. Thereafter, Sound Craft conveyed that it is no longer interested in the project, prompting panic-stricken officials to invite the company for another round of talks here on February 19.

The government had offered a five-acre plot on the Ranchi-Khunti Road, 5 km from the airport. But the company is learnt to have insisted on a seven-acre plot, cash incentives of Rs 15 crore, waiver of sales tax for seven years and customs duty on imported goods as well as furniture and a five-year freeze on electricity tariff.

The company, however, has no experience of either constructing or running a hotel. For the hotel project, the company claims to have tied up with the Accor group of France as consultants.

Asked about the promoters, industry secretary Bimal Kirti Singh said: “I have not done a Ph.D on the company and the files are in my office.” Singh had earlier negotiated with the company.

Sound Craft, officials said, has held out the carrot of investing Rs 4,000 crore in the state and set up power plants at Chandil with an installed capacity to generate 1,000 mw.

In the first phase of the hotel project to be completed in 18 months, the company had offered to build 90 double rooms and 10 suites, besides three speciality restaurants, a 24-hour coffee shop, a swimming pool, two banquet halls, a gymnasium, a pastry shop, a shopping arcade, a mini theatre, a helipad and a yoga centre.

In the second phase, according to the project report, a bowling alley, a mini golf course, a health spa, a nature care centre and a cultural heritage museum would be set up.

The industry secretary pointed out that many industrialists have been refusing to even visit Ranchi in the absence of good hotels.

The state has lost out, he said, in the past few years and now that Jharkhand has been given the honour to host the 2007 National Games, it had become necessary to put up hospitality infrastructure in place. “Everything should not be calculated in terms of financial gains,” he said.

A section of officials said the bidder had offered to “lease out” or reserve 29 rooms and one suite at 50 per cent tariff for state guests. It has also offered to provide free membership of the health club and swimming pool to all “VVIPs” in the state capital for seven years.

Reservations expressed by the state government, which wants some of the rooms leased at concessional rates to the state government for 30 years, besides rebates on food and beverages, provoked the company to back out.

Officials pleaded with company representatives to return to the negotiating table and a meeting was fixed with the chief secretary on February 16. But it was postponed till February 19 as the chief secretary and other officials have been called to Delhi for a meeting with the Election Commission.

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