BHUBANESWAR: In a push to unlock the hospitality potential of state-owned hotel assets, the government has decided to move ahead with disinvestment of Hotel Kalinga Ashok in Bhubaneswar and resumption of Nilachal Ashok in Puri.
The two significant properties of India Tourism Development Corporation (ITDC) continued to remain under-utilised despite having high hospitality potential. A high-level committee headed by chief secretary Manoj Ahuja constituted to decide on the future actions has recommended proper use of Kalinga Ashok by leasing it to the private sector, and resumption of Nilachal Ashok.
Originally a traveller’s lodge in 1956, Hotel Kalinga Ashok is located on an area of 5.01 acre in Gautam Nagar here. Of this, 3.12 acre were leased to ITDC by the General Administration department in 1984 for 90 years, while the remaining 1.89 acre are freehold with ITDC.
While the hotel currently has 36 rooms, a restaurant-cum-bar and four banquet halls, it has been recording only about 30 per cent occupancy and incurring losses despite its prime location.
Sources said discussions on its revival, including disinvestment or joint-operation models, have been ongoing since 2015. Earlier, though the Ministry of Tourism had suggested the Odisha government to buy the ITDC property at official value or lease them in partnership, it could not be pursued due to un-viability.
In December 2024, both the Centre and state agreed in principle that the entire five-acre parcel would be transferred to the state based on mutually agreed valuation. With the hospitality potential still under-exploited, the high-level committee observed that Kalinga Ashok is not being utilised to its full potential, and agreed that disinvestment is essential.
“The panel has recommended that the entire property may be taken over by the state government or handed back to ITDC to proceed with disinvestment, enabling a premium hotel brand to come up through private sector participation,” said a Tourism department official.
Similarly, developed on around eight acre land and operational since 1988, Nilachal Ashok has remained closed since March 2004. The property was built under Utkal Ashok Hotel Corporation Ltd (UAHCL), a joint venture between ITDC and OTDC, where ITDC now holds 98 per cent stake after restructuring.
Despite attempts to lease out the property post-closure and losses, the selected private developer failed to comply with terms, leading to litigation, which ended in favour of ITDC in 2021. The state resumed 2.5 acre of the original land in 2010 and UAHCL continues to hold 5.5 acre. The Revenue and Disaster Management department has been asked to initiate resumption of the property following due procedure, the official added.