Bhubaneswar, Aug. 24: The murder of Vizag Steel's assistant general manager I.S. Prasad Rao has brought to the fore a major challenge for security agencies - guest houses operating here without any valid registration.

Rao was murdered in January at an unregistered guest house in Patia.

The existence of 70 such illegally run lodges has come to the fore following sustained police crackdown on such establishments ever since the murder.

Criminals had held Rao hostage at the house and later killed him. The cops had arrested the owner, Manoj Kumar Rout, for helping the accused and giving them shelter.

Sources said pimps and drug peddlers often check into these illegal guest houses. Last month, the police busted a sex racket at a Nayapalli lodge, which was run by notorious criminal Sunil Meher.

In 2013, the police had busted two such rackets at unregistered guest houses in Lumbini Vihar and Gadakana.

There are many such establishments in Chandrasekharpur and Patia where house owners have converted their property into lodges. These unregistered buildings have become safe havens for goons because rooms are available at cheap rates and the visitors don't need to go through any identity checks.

"In most instances, owners of single and double-storey buildings convert their houses into guest houses to earn quick money. As the city has expanded in all directions in the recent past, it has become difficult for the cops to identify such shoddy establishments," said a police official.

In November last year, the cops had asked the owners of hotels, lodges and guest houses to register under Sarai's Act, 1867. According to the act, among other things, all the hoteliers in every town are supposed to submit a copy of their trade licence to the district administration.

"We have asked the inspectors concerned to prepare a database of lodges and guest houses operating without a valid licence. Stringent actions would be initiated against these establishments," said deputy commissioner of police Satyabrata Bhoi.