Over Rs 9 cr rent yet to be paid by contractor Leslee Shylla
SHILLONG: The State government is exploring the means of arbitration to find a way out to salvage the jinxed Crowborough hotel project since Lesly Shylla who was entrusted with the re-construction of the project has defaulted on payment.
Over Rs 9 crore is yet to be paid to the government by Shylla despite several reminders after he entered into a lease agreement with Meghalaya Tourism Development Corporation (MTDC) to develop the hotel.
It was on May 28, 2008 that the hotel with an area of 28,869 sq.ft. was leased out to Shylla, an entrepreneur from Jaintia Hills for a period of 33 years. An official source told The Shillong Times that the pending amount as lease rent to be paid to the State government by Shylla up to March 2016 is Rs 7,31,38,000 and amount outstanding in the form of service tax up to the same period is Rs 2,13,22,441.
Shylla is yet to pay the lease recent for four quarters to MTDC though several deadlines were set by him to complete the project.
The official source added that in July this year, the MTDC had issued a show cause notice to Shylla asking him to reply within one month on various aspects related to the re-construction and completion of the hotel.
The decision was after the board meeting of MTDC which also preferred arbitration as a means to end the stalemate over the reconstruction of the hotel.
The members present in the meeting preferred not to carry on with the project under the present lessee since he had not paid the dues.
“Since Shylla had not replied within the stipulated time of one month, we are on the verge of appointing an arbitrator to decide the fate of Crowborough hotel”, the source added.
The MTDC is looking for a retired Judge of any High Court to be the arbitrator to settle the matter.
There are varied options before MTDC including the need to call a fresh expression of interest to enable competitors to bid for reconstruction of the hotel.
Whether MTDC should take up the project or it should be entrusted to others will be decided after the completion of the arbitration process.
Earlier, there were several deadlines set by Shylla for the completion of project from 2009 till 2013 and the MTDC had also given many extensions to the lessee complete the project.
The construction of Crowborough hotel was delayed since 1987 due to twin court cases with two firms entrusted with the project.
In 1987, the State government had entrusted the construction work of Crowborough Hotel to SA Builders. The firm could only finish the basement.
As SA Builders could not complete the work, the State government entrusted the work in 1993 to another firm Ashta Construction Company. However the first firm SA Builders approached court for compensation.
Later, as Ashta could not complete the work in the stipulated time, the work was aborted by the State government resulting in another court case.
The State government in 2001 paid Rs 4.23 crore to Ashta Construction Company by way of compensation.
Moreover, the Tourism department in 2004 paid Rs 1.93 crore to SA Builders as final clearance following the court case.