Payback time for GMR?

Air India wants Centaur hotel rebuilt at a different location if it is demolished for airport expansion

Payback time for GMR?

Air India wants Centaur hotel rebuilt at a different location if it is demolished for airport expansion

The GMR led Delhi International Airport Limited (DIAL) and Air India are at loggerheads over the issue of relocation of Centaur hotel as it falls in the way of airport's expansion as per DIAL's master plan.

According to sources in the aviation ministry, letters are being written to Ministry of Civil Aviation by both DIAL and Air India over a pending decision regarding Centaur hotel's relocation.

"DIAL wants demolition of Centaur hotel by December 2011 but Air India has reportedly put conditions for it; either pay the cost of the present hotel (which is unofficially estimated to be about Rs 2000 crore) or relocate the present hotel with a ready-to-move-in infrastructure," sources in the ministry said.

The sources further stated that Air India and Hotel Corporation of India are even adamant on retaining the Centaur Hotel considering its legacy and profit it makes in Delhi.

"It is a legacy and has been doing good business. It would be best not to relocate it and if it is necessary then an equally good infrastructure with an equally good location should be arranged," Air India is believed to have suggested the ministry. It is believed that in November 2010 DIAL had written a 'secret letter' to the aviation ministry asking them for demolition of Centaur hotel.

Earlier, DIAL had indicated that the Centaur hotel was coming on the footprint of the new terminal building as per its Master Plan for the IGI Airport. As per the master-plan, the hotel needs to be demolished by 2016, based on traffic triggers.

Sources said that according to Operation Management and Development Agreement, decisions on any changes in hotels are trilateral. "Hotel Corporation of India, HCI, Airport Authority of India, AAI and GMR are trilaterally involved in decision making on any such issue," the sources stated.u00a0When contacted, the DIAL spokesperson said that whatever is being done is in accordance with the DIAL master-plan and OMDA.

Hotel has 60 percent occupancy average

Being an airport hotel, the 376-room Centaur hotel has an average occupancy of 50 to 60 per cent at all times.
At times of fog or other delays, the occupancy goes up to 110 per cent. The Hotel had got a facelift as part of the 2010 Commonwealth Games preparation plan.
The plan to upgrade the hotel had found favour in a Parliamentary Standing Committee report presented in December 2009.
The panel on transport, tourism and culture had said, "The committee recommends that measures should be taken by the government to improve performance of the hotel with that of other luxury hotels in Delhi."
The current traffic growth had hinted towards the removal of hotel possibly as early as 2011, but DIAL had told the Hotel Corporation of India that the demolition plan falls under its second phase of airport expansion and will not be taken up before 2012.

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