Uttarakhand seeks legal opinion on Emaar MGF hotel project

The Uttarakhand government is seeking legal opinion on its proposed move to cancel an agreement with infrastructure major Emaar MGF for constructing a 5-star hotel project at Garhi Cant area here.

The government, for the past two years, is at loggerheads with the infrastructure group over the construction of the five-star hotel as the company is demanding that permission be granted to it to construct a mall at the site under the memorendum of understanding (MoU) provisions.

We are seeking legal opinion on the five-star hotel issue,” state tourism secretary S S Sandhu told Business Standard. The government is hopeful that after cancelling the MoU with the Emaar group, a fresh bidding process would be floated. An investment of Rs 200 crore is needed for the project, said a senior government source.

The state government has already rejected the proposal of Emaar MGF to construct a mall at the site of the 5-star hotel here. Emaar MGF had entered into an MoU with the state tourism department in 2008 to construct the 5-star hotel on public-private partnership (PPP) model. The tourism department had given 10 acres of land to the company, which it had acquired from the Oil and Natural Gas Corporation (ONGC) at Garhi Cant area here as part of the tourism project.

Under the agreement, Emaar MGF had deposited Rs 1.5 crore to the state tourism department as annual lease rent. The hotel was to be constructed in within a timeframe of 2-3 years. But due to the financial meltdown, the company did not show any interest towards completion of the project. When the tourism department took up the matter, the company said it should be allowed to construct a mall along with the hotel which it said would be a better business proposition. The tourism department had outrightly rejected the idea of constructing a mall.

When asked whether any formal notice will be issued to the Emaar MGF, the official quoted above said notices have already been sent to the belligerent group regarding the cancellation of the MoU. “We would return all the money of Emaar MGF after the cancellation of the MoU,” said the official. Last year, the Taj Group evinced interested in constructing a 5-star hotel at the same site. But since the agreement has not been cancelled, the government is unable to take any decision on the Taj Group’s proposal.