Janpath Hotel is the fourth ITDC hotel to be shut down under the disinvestment policy.
The Cabinet Committee on Economic Affairs or CCEA today gave in-principle approval for the closure of ITDC's Janpath Hotel in New Delhi. The property "can be considered" for setting up government offices, it said in a statement.
The CCEA, chaired by Prime Minister Narendra Modi, gave in-principle approval for the transfer of Janpath Hotel to the Ministry of Urban Development.
"Hotel Janpath is located in a prime central location of the city. The property can be considered for construction of government offices and similar purposes which would save government funds spent in hiring of government offices," the government said in the statement.
The government decided to shut down Hotel Janpath within a month after exiting from three hotels of India Tourism Development Corporation Limited in Bhopal, Guwahati and Bharatpur. The committee of secretaries, under the cabinet secretary, will take a decision on details of implementation of the project and land use.
"The building of Hotel Janpath has to undergo major rehabilitation work since the building structure of Hotel Janpath has been found to be unserviceable, in distressed condition and deficit in the context of seismic requirements, according to the inspection report of IIT Roorkee," the statement said.
The government has started disinvestment of ITDC's hotels and properties as it believes running hotels is not the work of the government or its entities. As part of the disinvestment policy, the government will lease or sub-lease hotels and properties jointly with the states. The government may also return properties to the states after a fair valuation.
The states can either upgrade and operate the hotels by involving the private sector, or use the properties as per their requirement.
In the first stage, the government decided to disinvest three hotels - Hotel Lake View Ashok in Bhopal, Hotel Brahmaputra Ashok in Guwahati, and Hotel Bharatpur Ashok in Bharatpur.
Shares of ITDC closed at Rs 516.80, down 6.69 per cent, on the Bombay Stock Exchange.