ISLAMABAD, April 11: Pakistan Railways (PR) will begin construction of a 4-star hotel near Islamabad International Airport from April 23, official sources told Dawn on Thursday.

Federal Minister for Communications and Railways Javed Ashraf Qazi will inaugurate the investment project worth Rs27 million that would yield a minimum guaranteed revenue of around Rs10 million per annum to the railways.

Sources said French hotel chain Lemaridiam Company has signed a long-term 33-year lease agreement with a joint venture of the PR and S & S Enterprises to run the hotel.

Under the agreement the PR would charge licence fee besides a guaranteed and a variable share of revenue that would ensure a minimum of Rs330 million in 33 years.

The 23-Kanal area near Chaklala railway station has been lying idle for last many years and is now being used for commercial purposes as the PR gears towards corporatization with the induction of 175 new coaches and 65 ambulances next year.

These locomotives are being purchased from China and would start coming to Pakistan under a technology transfer agreement by year end.

On account of its proximity with the airport and railway station, the PR is expecting good business opportunities and the number of star hotels in Rawalpindi would grow to three.

The PR had invited bids to lease out the land twice before the final round and five parties had shown interest for investments. The highest return offered by a private school chain was Rs40,000 per month.