Communists happy to sell off Kolkata’s faded glory
By Surojit Gupta
KOLKATA: Once known as the Jewel of the East, the Great Eastern Hotel in Kolkata, former capital of colonial India, has seen better days. Used by the British to billet their troops during a mutiny by Indian soldiers in 1857 and again in the 1960s to house the Queen’s entourage, the Gothic-style hotel’s average occupancy is now just 20 per cent and its owner, the communist-led government of West Bengal state, has put it up for sale.
Although they criticise a federal privatisation drive by New Delhi, the communists are selling off their own loss-making firms in West Bengal, where they have ruled for nearly 20 years.
At the federal level they oppose any efforts to sell stakes in profitable state-run firms, even though India’s cash-strapped ruling coalition needs $6 billion to fund projects for the poor, and selling chunks of a few choice assets could help fund that.
But at state level, five years after first announcing plans to sell the Great Eastern, the far-left hope finally to do a deal by the end of the year. They have hired a consultant, and several hotel chains have inspected the property.
The communists in New Delhi, whose support is vital to the coalition, are set against selling off healthy state firms.
The federal government is selling 10 per cent of power plant equipment maker Bharat Heavy Electricals to the public. The communists say this is creeping privatisation and plan to boycott meetings of a government liaison panel in protest.
In contrast, analysts say the need to develop West Bengal has led the communists down a path of economic reforms there.
“The communists in West Bengal are pragmatic while the communists who are pure ideologues are free to be as irresponsible as they wish,” said P.K. Basu, managing director of private economic research house Robust Economic Analysis.
The state’s industry minister, Nirupam Sen, said West Bengal was merely taking steps to restructure its loss-making companies. “We are facing fiscal constraints, so we identified areas where we can save. We decided to close down chronically loss-making firms,” said Sen, sitting in front of a black-and-white photo of Soviet leader Vladimir Ilyich Lenin.
Some savings will not be immediate.
The Great Eastern’s 444 staff still need to be paid, costing the cash-strapped state government 3.7 million rupees ($85,000) a month.
The hotel — which promises on its tariff card that “we serve more with endearing warmth of our heart than with shot-hot hi and hellows (sic)” — ran up 23 million rupees in losses in 2003. The figure has since risen to 30-40 million rupees.
THE ROAD TO REFORM: West Bengal started a pilot project for restructuring 16 state firms with help from Britain’s Department for International Development. It has already closed two loss-makers and is on the verge of shutting an electronics firm and its five subsidiaries after handing out handsome severance packages.
“We had taken into confidence all the trade unions while undertaking this restructuring,” Sen said. “We have done it through dialogue and debates.”
Four years ago, the government tried to transfer management of the Great Eastern to French hotel giant Accor, but failed because of stiff opposition from the powerful unions.
West Bengal has struggled to find a buyer for the 164-year-old hotel as it slips into decay. Once-gleaming marble floors are stained and a musty smell greets visitors, while furniture and upholstery in many of the 213 rooms are frayed.—Reuters
