MTDC seeks legal opinion on delay in dues

By Rajiv Roy

 SHILLONG: The Meghalaya Tourism Development Corporation (MTDC) is seeking legal opinion on the delay in payment of dues worth several crore of rupees by Lessly Shylla who is executing the Hotel Crowborough project at Police Bazar.

Moreover, the MTDC has also sought status of completion of the work and sub opening of a portion of the hotel after several meetings with Shylla who had agreed to open a portion of the Hotel, but in vain.

Speaking to The Shillong Times on Sunday, the Chairman of MTDC, David Nongrum Shylla is behind five quarters in terms of payment of lease rent worth several crore of rupees to MTDC. He added that the party is unable to make the payment due to some banking issues.

According to MTDC chairman, they have sought advice from their legal advisor on what action can be taken on the pending lease rent and license fee.

Nongrum also said that he shot off several letters to Shylla regarding payment , but the party has failed to reply.

On the reports that Shylla bagged the hotel project with the support of Shillong MP Vincent Pala who is also a signatory witness in the agreement signed between Shylla and MTDC, Nongrum said, “We do not know anything. It is from the general public that we were getting to hear all these”.

According to sources, the project at Police Bazar would have been completed within the one year timeframe allotted for its completion in 2008 by MTDC had it been sanctioned to other three bidders including Center Point Group Enterprise, City View Hotels and HM Cements since they are well experienced in this line. But the project was allotted Shylla, a local coal trader from Jaintia Hills who emerged as the highest bidder among the four.

Sources said that lack of transparency and accountability in terms of handing over and monitoring the project has also contributed to the delay. “There were certain administrative loopholes or else the project cannot be delayed in this fashion. Nobody from the side of the state government has ever tried to find out the real problem behind the project,” said a well placed source reasoning the delay.

The project is adding up to the long list of stalled projects in the state. Even after giving extensions of time year after year, the project has not yet seen the light of the day as one can only wonder in what way the State government is benefitting from this project that was conceived back in the 80s.

The hotel occupying 28,869 sq. ft. area has been leased out to Shylla on May 28, 2008 for 33 years. As per the lease agreement between MTDC and Shylla, the latter is to complete the project within a year.

But since it defaulted on the allotted time, extension was given by the Corporation till November, 2010 and later up to November, 2011 – which was allowed on condition that dues towards lease rent were cleared. Shylla was awarded the extension then after the dues were cleared. The lessee has to pay lease rent and license fee for the entire lease term on quarterly basis to MTDC.

This annual rental to be paid by Shylla to MTDCL is Rs 173.33 lakh. The amount goes up by 10% every fourth year. In 33 years, Shylla would have to pay approximately Rs 100 crore to MTDC. Ironically though the project was to be completed within November 2010 initially after the first extension was given, the building permission was obtained by Shylla from Meghalaya Urban Development Authority (MUDA) in December, 2010, two years after the stipulated date of completion.

Though sources in the MTDC claim that the hotel is 80% complete but professional civil engineers differ. One such engineer who did not want to be identified said that much work is left in this hotel but that does not mean that it should go on and on. According to the engineer a maximum of six months is all that is required to complete the project had it been bagged by a professional firm.

Iin December, 2012, the committee on public undertakings under the chairmanship of former MLA, Sayeedullah Nongrum in its recommendation has fixed August, 2013 as the deadline for Shylla to complete the project. In his last inspection, MTDC chairman David Nongrum informed that the project is expected to complete in May, 2014 or else legal action will be taken against Shylla. He had also said that the state is losing revenue in the form of lease rent, service tax, excise and luxury taxes due to the non-completion of the project.

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