New Delhi, Dec. 8: The tourism ministry has kicked off the process of divesting stakes in loss-making ITDC hotels after a go-ahead from the Prime Minister's Office to lease out two to begin with.

The 75-room Ashok in Jaipur and the 45-room Ashok in Jammu will be the first two hotels to be handed over to the private sector for operations and maintenance on a ten-year lease, officials said.

The ministry had earlier this year proposed asking private investors to run seven ITDC hotels as part of the Centre's policy to exit from chronic loss-making public sector units. The Union cabinet has already cleared the plan.

The proposal had sought the privatisation of the Ashok group hotels in Jaipur, Bhubaneswar, Jammu, Guwahati, Ranchi and Pondicherry and the Lalitha Mahal hotel in Mysore, which had cumulatively accumulated a loss of about Rs 15 crore in the last fiscal.

The ITDC's Ashok Hotel in Delhi - considered the family's silver despite registering a loss of Rs 13.63 crore in 2014-15 - has, however, been excluded from the privatisation process.

A tourism ministry official said the decision to invite private operators to run the hotels in Jaipur and Jammu was taken at a meeting with the PMO and finance ministry officials last week.

"The governments in these two states are also very keen on this," the official said, adding the bidding process with "detailed terms of reference" would be officially out this week. "We want to see the response. This will set the course for the next phase of the divestment process."

Another official said that in the same meeting, it was also decided that 12.6 per cent of the ITDC's total company shares would be divested. "The files have begun moving on this issue," said an additional director-general in the ministry. "We are hoping to begin the process of divestment in the current financial year."

Hoteliers believe the government-owned properties being offered to private players will interest many. "Most of the ITDC hotels are in prime locations. At a time the biggest woe of the hospitality industry is getting plots at the right sites, this move is going to interest many," said Devendra Amitabh, secretary, Federation of Hotel and Restaurant Associations of India.

Sources, however, said the process was unlikely to be smooth in the case of some hotels. Three states not ruled by the BJP, for instance, have opposed the Centre's plan to privatise loss-making ITDC units and have volunteered to run the hotels themselves.

"In these cases, negotiations are still on with the representatives of these governments," said an official close to tourism minister Mahesh Sharma.