Centre firms up asset monetisation plan for Ashok Hotel, Cabinet nod likely by January

The 550-room Ashok Hotel is located at Diplomatic Enclave, Chanakyapuri, New Delhi (Image: Twitter/PIB)

The Centre, which has set an ambitious disinvestment target, has firmed up plans to monetise New Delhi's strategically located The Ashok, the five-star hotel run by the India Tourism Development Corporation (ITDC), CNBC TV 18 reported on December 16.

The report said the Union Cabinet is likely to give its nod to the asset monetisation plan by January.

The proposal may be taken up by the Cabinet by early next month, a government official told the news channel, adding that the Centre expects the hotel's monetisation to be completed by December 2022.

An empowered group may be set up by the Cabinet to run the process, the official said, adding that three models have been proposed. One is to lease the hotel on a standalone basis, the source told CNBC TV 18, with the land parcel kept out of the  process.

The Ashok, located in the diplomatic enclave of Chanakyapuri in Lutyens’ Delhi, was opened in 1956. The sprawling property with 550 guest rooms is owned by ITDC, in which the government holds an 87.03 percent stake.

There has been talk over the past couple of years about the government planning to monetise the hotel. A number of other ITDC hotels, including Janpath in Delhi, Jammu Ashok in Jammu and Kalinga Ashok in Bhubaneswar, have been shut down in recent years due to mounting losses.

A report commissioned by the Department of Investment and Public Asset Management (DIPAM) in 2020 had said that the government could raise around Rs 7,500 crore by selling its hotel properties.

The asset monetisation plan is part of the disinvestment drive being spearheaded by the Centre. The finance ministry has set an ambitious target of raising Rs 1.75 lakh crore through disinvestments in FY22. This is nearly five times the Rs 32,825 crore raised through divestments in the previous fiscal.

While the CNBC TV 18 report claims that The Ashok could be sold by end of next year, there was no information disclosed by its source on Samrat Hotel, which is also run by ITDC in the national capital. Reports had earlier claimed that the Centre may retain Samrat due to security reasons, as it lies in close to the prime minister's residence.