In a significant move to address the financial crisis in Himachal Pradesh, the Himachal Pradesh High Court on Thursday ordered the closure of 18 state-owned, loss-making hotels, which it described as “white elephants.” This decision is part of the state government’s ongoing battle with massive debt and unpaid dues. The court had earlier this week also ordered the attachment of Himachal Bhavan, the state guest house in New Delhi.
The 18 hotels, owned by the Himachal Pradesh Tourism Development Corporation (HPTDC), have been operating at a loss for years, contributing to the state’s growing financial burden. The hotels set to be shut down include prominent properties such as The Palace Hotel Chail, Hotel Geetanjali Dalhousie, Hotel Dhauladhar Dharamshala, and Hotel Kunjum Manali, among others. These properties are located at prime tourist locations, but their inability to generate sufficient revenue has led to their classification as unprofitable.
The state government has faced mounting criticism for its handling of the tourism sector and the maintenance of these hotels, with the court citing that public resources were being wasted on their upkeep. The closure order came after the state government’s failure to pay dues, including an upfront premium of ₹64 crore related to a case filed by Seli Hydropower. In light of the financial strain, the court also suggested that the Himachal Bhavan property could potentially be auctioned to raise funds.
Chief Minister Sukhvinder Singh Sukhu expressed his intention to challenge the court’s order in the Supreme Court, although no concrete plans have been announced regarding how the state government will manage its debt crisis. State Revenue Minister Jagat Singh Negi acknowledged the financial challenges posed by the hotels but emphasized that steps could be taken to resolve the issue if the properties were not financially viable.
The court’s decision to shut down the hotels highlights the state’s struggle with managing its public sector enterprises, particularly in the wake of a significant financial crisis. The hotels, which were built with the goal of boosting tourism, have instead become a drain on the state’s finances, with little return on investment. The government will now need to focus on restructuring its finances and finding more sustainable solutions to address its growing debt.
In addition to the shutdown of the hotels, the court’s order places responsibility on the Managing Director of the HPTDC to ensure compliance with the directive. The court has underscored the need for immediate action to prevent further financial wastage and safeguard public resources.
As the state government weighs its next steps, the future of these iconic state-run properties remains uncertain, with many questioning whether further privatization or alternate management strategies could be the solution.
Sources By Agencies
