Published on : Wednesday, December 27, 2017
The commerce ministry’s trade promotion body, India Trade Promotion Organisation (ITPO) has been planning to raise as much as Rs.1,500 crore by way of loans and also by monetizing a part of land at Pragati Maidan to part-finance the Integrated Exhibition-cum-Convention Centre planned there.
Currently the ministry is working on a cabinet note to monetize nearly 3.7 acres of land for the construction of a hotel in the upcoming exhibition complex.
It would be offered on a long-term lease or on free hold to a private player.
L C Goyal who is the chairman and managing director of ITPO mentioned that they have been planning to raise as much as Rs. 1,500 crore by means of institutional loans and monetizing this part of the land to establish a hotel.
ITPO represents a mini-ratna public sector undertaking.
It operates the exhibition centre that had been inaugurated in 1972 by the then prime minister Indira Gandhi. The organization would be pumping in about Rs. 1,200 crorer from its reserves for the redevelopment project and finance the balance of the project through a long-term loan from banks and financial institutions.
They would all be empowered with government guarantee or soft loans, external aid and land monetization.
Earlier this project was estimated to cost around Rs. 2,254 crore. But then the cist rose to about RS. 2,700 crore owing to the Goods and Services Tax roll out as per an official of ITPO.
The officials asserted that theere would be strict safeguards and timelines for the hotel developer in case the government decided to offer the land on a free hold basis.
However, as per a commerce department official the housing and urban affairs ministry would be taking a call on the monetization plan as the land belongs to it. ITPO is also doing a market study to fix a reserve price for the hotel.
While the convention centre is expected to come by September 2019, the hotel would take more time to be completed.
Construction major Shapoorji Pallonji had grabbed the redevelopment contract that is inclusive of a state-of-the-art convention centre with a capacity to seat 7,000 people that is nearly five times the capacity of Vigyan Bhawan, the premier convention centre of the government.