The commerce ministry’s trade promotion body India Trade Promotion Organisation (ITPO) plans to raise around Rs 1,500 crore through loans and by monetising some portion of land at Pragati Maidan in Delhi to part fund the Integrated Exhibition-cum-Convention Centre planned there.
The ministry is working on a cabinet note to monetise about 3.7 acres land for construction of a hotel in the upcoming exhibition complex. It will either be given on a long-term lease or on freehold to a private player.
“We plan to raise almost Rs 1,500 crore by means of institutional loans and monetising the land to set up a hotel,” said L C Goyal, chairman and managing director of ITPO.
ITPO, a mini-ratna public sector undertaking, runs the exhibition centre, which was inaugurated in 1972 by the then prime minister Indira Gandhi.
The organisation will pump in Rs 1,200 crore from its reserves for the redevelopment project and fund the balance of the project through long-term loan from banks and financial institutions with government guarantee, or through soft loans, external aid and land monetisation.
The project was earlier estimated to cost Rs 2,254 crore, but the cost rose to almost Rs 2,700 crore due to the Goods and Services Tax roll out, according to an ITPO official.
As per officials, there will be strict safeguards and timelines for the hotel developer in case the government decides to give the land on a freehold basis.
However, as per a commerce department official, the housing and urban affairs ministry will take a call on the monetisation plan as the land belongs to it. ITPO is also doing a market study to fix a reserve price for the hotel.
