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Himachal Pradesh Chief Minister Jai Ram Thakur on Tuesday ridiculed the then Congress government for selling Wildflower Hall, a landmark luxury hotel near here, to the Oberoi Group in 1995 while ignoring the state's interest as the state did not receive any money from it.
The state is a stakeholder in the heritage hotel, located at Charabra at a height of 8,300 feet amid thick verdant forests of pine and cedar.
Thakur's assertion came in the state Assembly when the main opposition Congress raised a hue and cry over the government's move to hand over 16 properties of the state Tourism Department without approval for lease to private players.
After creating a ruckus and heated exchanges between the treasury and opposition benches, Congress legislators staged a walkout from the Assembly.
Clarifying on the allegations, Thakur said that there was no question of either selling any Himachal Pradesh Tourism Development Corporation hotels or allowing use of tea gardens for real estate or commercial use.
Admitting that the list of hotels for sale had been put out by mistake, he said the government would not allow leasing of these properties.
He said a committee headed by the Chief Secretary would in three days hold an inquiry into the issue.
The Chief Minister said Wildflower Hall was handed over to the Oberoi Group under a joint venture in 1995 by the then Congress government in the state.
The British-era Wildflower Hall was once the residences of Lord Kitchener, Field Marshal in the British Army who played a significant role in the early part of World War I.
After India's independence, the building was handed over to the Himachal Pradesh Tourism Development Corporation for running a hotel. The building was gutted in a fire in 1993.
Thakur said the government then approached prominent hoteliers and finally shortlisted the Oberois.
It was handed over to East India Hotels Ltd (belonging to the Oberois) in 1995 to set up a five-star hotel. At that time, the cost of constructing the hotel was pegged at Rs 40 crore and the state government's share was fixed at 35 per cent.
Subsequently, the Oberois raised the cost of the project to approximately Rs 100 crore which reduced the government's equity and it didn't take any step to check its falling stake.
The government scrapped the joint venture agreement with the Oberois on March 6, 2002.
The Oberois challenged the government decision in the Himachal Pradesh High Court, which appointed an arbitrator on December 17, 2003.
The arbitrator in his award in 2005 said the partnership was irreconcilable and asked for converting the agreement into a leasehold property.
The Oberois again moved the High Court against the decree. The court dismissed the petition on February 25, 2016.
East India Hotels Ltd has further filed the appeal in the double bench and is listed for hearing on October 15.
The hotel is sought after by high-value tourists, celebrities and politicians.
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